The Return of Pricing Power, And What You Should Do With It

Spring is arriving, and revenue manager’s thoughts typically turn not just to baseball but to sequential rent growth. Of course, this year is particularly uncertain given everyone’s interest in how the COVID-19 crisis will affect us.
I’m going to be bold and say that “Yes, we are seeing a return of pricing power,” and those who recognize this earlier than others will reap the benefit of that insight. Why am I so bullish? Let’s look at some macro trends and then share some micro data we’ve been seeing.
Almost all of the macro trends are in our favor:

Rent seasonality trends positive for at least the next 4+ months.
Vaccine supply and distribution continue to accelerate.

The Biden administration has increased its “first 100 days” target from 100 million doses to 200 million.
According to Bloomberg, 143 million does have been given through March 28. We are averaging 2.71 million doses per day on a trailing 7-day basis. On current trajectory, that will rise to 3 million within the next 2-3 weeks.
Roughly 94 million Americans have already received at least one dose as of March 28. That’s 28.2% of the entire population (35.0% of the eligible population, i.e., 16 and older)
This means about 49 million have been fully vaccinated

Virtually all states have increased relaxed their rules, and the trends continue to move in that direction.

On the micro-data front, we recently asked participants in our weekly downturn roundtable to share how much their lease-over-lease rent growth has changed:

Several operators ……