Has anyone reviewed the stimulus package to see how it will help the CRE industry?
As the title says, I'm wondering if anyone has been able to review the stimulus package and how it helps CRE.  It's been kind of hard to find solid information, but what I gathered was that SBA loans will be given to small businesses and a portion will be forgiven (which I believe includes a couple months of rent, payroll and interest) as long as you retain your employees on payroll.  Is that what you all reading as well?  I wonder how that will apply to CRE investors with nobody on payroll.
[{"id": "flhivfl", "text": "Well, it might apply to the investors of they have tenants, and they choose to not evict them...but we're still looking into it ourselves.  One things seems certain: if you take any money and it isn't used for the intended purpose (keep staff, don't evict tenants, etc) then that money will be asked to be repaid (won't be forgiven).  We're not sure of all the details yet but this seems to be the spirit in which that money will be available.", "replies": [{"id": "flity67", "text": "If you take money and don\u2019t use it for its intended purpose then you should be punished, not just have to repay the loan you should have paid back anyway.", "replies": [], "depth": 2}], "depth": 1}, {"id": "flhnmdz", "text": "I think the commercial industry is going to be hurt by this much more than people think at this point. Especially office space. My wife is working from home currently, on a job that they didnt allow this before. But it is working well for them. \n\nI think what is going to happen is these company's are going to realize they can just have thier employees work from home, and save on a ton of overhead but still get the work done. This is bad if you own large office properties in my opinion.", "replies": [{"id": "flhozjh", "text": "not a long term solution. you'll see people becoming unproductive working from home and missing commute, office and colleagues. we are social beings.\n\n&amp;#x200B;\n\nhow can someone wake up and work home for over 1 month and not go crazy?", "replies": [{"id": "flhp9u6", "text": "Cabin fever already setting in for people", "replies": [{"id": "flhpair", "text": "Yup", "replies": [{"id": "flhy4jy", "text": "I agree, but it's a lot different when you can't even go to bars/restaurants/gatherings. Much easier to avoid cabin fever if you know you can head somewhere social at 5pm.", "replies": [{"id": "fli2jl1", "text": "Fact", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}, {"id": "fliffuo", "text": "i literally watched a rabbit eat a carrot for 3 hours on youtube yesterday", "replies": [{"id": "flitcdy", "text": "Link?", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "flhq4l1", "text": "How can someone get ready every morning, endure a shit commute, and sit in a cubicle getting bothered by people all day, then endure another shit commute? \n\nMy god the money we\u2019ve saved since starting this has been amazing. The pollution we\u2019ve reduced is mind blowing. So many benefits and very little negatives.", "replies": [{"id": "flhq8ya", "text": "Many negatives. Who wants to work from home? Yikes. Maybe 2x a month. But everyday?! You\u2019ll go crazy. Who do you talk to? How do you have in person meetings. Ask questions? Socialize. A joke.", "replies": [{"id": "flhqizm", "text": "Who do I talk to? My friends and family. In person meetings? We\u2019ve been bitching about useless meetings for decades now, we have multiple avenues of teleconference. Ask questions? We have phones, and again, teleconference. Socialize? That\u2019s what outside of work is for, friends and family.", "replies": [{"id": "flhql9q", "text": "Whatever floats your boat", "replies": [], "depth": 6}], "depth": 5}, {"id": "flhvii0", "text": "Depends on your type of work. A lot of people don't talk to people when they\u2019re working because their job is solitary or because they are focusing. Really varies on the position", "replies": [], "depth": 5}, {"id": "fljapts", "text": "A couple of years ago, I used to have a job where I would have to go a downtown office to go to back to back meetings. When those were done, I had to work on my\u201dreal\u201d work (deliverables) at home everyday when I was \u201cdone.\u201d \n\nThe gig I have know, I can work from home as much as I want. There I can do twice as much \u201cwork\u201d in half the time, because I\u2019m not constantly interrupted with pointless meetings. Now my meetings are me explaining what I did, not what I I could do.\n\nI totally agree with the comment about office space taking a hit during the downturn.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "flhur4i", "text": "&gt; missing commute\n\nI've never heard of someone liking to commute", "replies": [{"id": "flukfw4", "text": "I have two small children and my daily commute is sorely missed right now.", "replies": [], "depth": 4}], "depth": 3}, {"id": "fli71oo", "text": "You have partial work from home systems. 2 days in office and 3 days at home. If you share workspaces you can rotate and save on overhead.", "replies": [{"id": "flttbin", "text": "Yeah I see this as a reevaluation of office space and a movement towards having teams/groups rotate in office days and wfh days.", "replies": [], "depth": 4}], "depth": 3}, {"id": "flik32q", "text": "When their norm was isolation, then working from home with no isolation in place would seem fine.", "replies": [], "depth": 3}, {"id": "flikq4y", "text": "You can make the same argument for driving 30 min to sit in a cubicle every day.", "replies": [], "depth": 3}, {"id": "fliqeal", "text": "I've worked from home for 2 years now. I'm fucking insane.", "replies": [{"id": "fliqf8o", "text": "Lmaooo. How do you do it ?!?!", "replies": [], "depth": 4}], "depth": 3}, {"id": "flitbbn", "text": "Of all things, i dont think anyone will miss their commute", "replies": [], "depth": 3}], "depth": 2}, {"id": "flhs46v", "text": "People on this subreddit keep saying this but I just don\u2019t see it happening. Employers know that there is value to physical presence that promote collaboration and creativity. Maybe they will adjust their work from home policy (to allow people to do it once in a while), but I don\u2019t see companies downsizing office to have their employees work from home permanently.", "replies": [{"id": "flht30i", "text": "For many jobs there is no creativity or collaboration needed, there is just clear cut things that need to be done, and it's easy to monitor or do from any computer. Like data entry type jobs or similar. No reason to have someone sitting in a cubicle if they can do It from a home office. \n\nWho knows what's going to happen, I just see the cost savings to companies for some of these jobs being so high I think they will want to continue it.", "replies": [{"id": "flhthzg", "text": "Fair enough. Back office and call center type work can be remote.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "fli89th", "text": "&gt; I think what is going to happen is these company's are going to realize they can just have their employees work from home\n\nThis is way overblown. Everyone I know with kids can't WAIT for their office to reopen.", "replies": [{"id": "flid0z4", "text": "Ah true the kids thing I didnt think about. But even with kids you could still have them at daycare. \n\nAlso, what do you think is over blown? I think most people are actually underestimating the economic damage this is doing and depending how long this continues it could get much worse.", "replies": [{"id": "flidj4s", "text": "It's doing a ton of damage, but people acting like all companies are going to stay work-from-home after this is nonsense.", "replies": [{"id": "flidpi8", "text": "Definitely not all you are right.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "fliaatn", "text": "That\u2019s the thing though this isn\u2019t the first wave of working from home. About 10 years ago companies did a lot of that and then they started to back off from it because they discovered that many other positions aren\u2019t suitable for working from home long-term. I definitely think it\u2019s going to happen but I don\u2019t know if it will be as big of a longer-term factor as people think.", "replies": [], "depth": 2}, {"id": "flib4dm", "text": "We\u2019ve broken a lot of old habits because of covid it will be interesting to see which ones come back and which ones are gone forever. I see a lot more flexible office space and telecommute combos in our future", "replies": [{"id": "flict44", "text": "I agree. Maybe companies keep a smaller office building for training new people and for some permanent staff but then the rest are at home workers.", "replies": [], "depth": 3}], "depth": 2}, {"id": "flj5q2y", "text": "How does that have to do with the stimulus package", "replies": [{"id": "flj7ezm", "text": "I guess I should have added that I think even with the stimulus cre will be hurt, my comment is partly why that is.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "flhnpcw", "text": "The details haven't been released yet. They were still writing it this morning. Key issues have been agreed on, but it hasn't been provided to the house yet.", "replies": [{"id": "fli98o9", "text": "Agency debt is backed. They have to back Commercial mortgages or the economy is gone.", "replies": [], "depth": 2}], "depth": 1}, {"id": "flhob9o", "text": "Was told by one of the biggest SBA banks out there that even though the fed fund rate dropped to 0, the banks are more cautious and want a bigger margin so the interest rates are pretty much the same as before.  Basically the lower fed rate is giving the banks a bigger profit... with little to no effect on loan rates for borrowers.", "replies": [{"id": "flhpoc4", "text": "Keep in mind it\u2019s riskier to do a loan as well right now for a bank hence increased spread", "replies": [], "depth": 2}, {"id": "flhqdtf", "text": "From what I understand the Fed is going to guarantee 100% of the loan, as opposed to (I think) 75%-85%.  And the interest rate cannot exceed 4%.", "replies": [], "depth": 2}, {"id": "fli8d83", "text": "Correct. Hearing the same. Many banks have a floor on interest rates no matter how low the fed rate is.", "replies": [], "depth": 2}, {"id": "flitsba", "text": "&gt;\u201cBasically the lower Fed rate is giving the banks a bigger profit\u201d\n\nThis is not how it works.  This should be evident in the fact that bank stocks have plummeted ~50%.  Banks don\u2019t know where to price loans for the risk and are therefore not lending unless the spread is adequate for the level of risk.  There is a lot less liquidity and a lot of risk out there right now.", "replies": [{"id": "fljbpnj", "text": "Banks will get squeezed by the Feds consumer stimulus. \n\nGet a stimulus check, pay off a credit card balance or not use it = bad for a bank. \n\nA business gets a low interest loan from the SBA or a perfect terms state funded disaster loan = not going to the bank to pay more interest points. \n\nConsumers not out shopping and splurging with high APR cards and enticing minimum payments = bad for banks. \n\nThose are a few examples or scenarios...\n\nPlus, the repo market crisis jacked their liquidity. Loan defaults ready to tip over on predatory underwriting might be their prey of choice now.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "flhprcu", "text": "From the solvency standpoint, it could help service providers to the properties stay in business. As a property manager, this will help us not have to lay people off. I\u2019m sure the same goes for a number of our vendors.", "replies": [], "depth": 1}, {"id": "flhsacy", "text": "The federal reserve is allowing banks to restructure loans without reclassifying them as TDR, which would not impact their reserve requirements.\n\nThis should hopefully enable CRE owners to forbear loan payments until this economy restarts.", "replies": [], "depth": 1}, {"id": "fli9cy0", "text": "The letter I received from NAIOP:\n\n\nThis morning, Senate and House leaders and the White House reached agreement on a $2 trillion economic stimulus bill designed to provide relief to individuals, businesses, and state and local governments. Coupled with steps taken by the Federal Reserve, these unprecedented actions are meant to stabilize and prevent any further damage stabilize to the economy.\n \nThe legislation is expected to take the following actions important to the commercial real estate industry:\nProvides a technical correction to the Qualified Improvement Property (QIP) depreciation drafting error from the 2017 Tax Cuts and Jobs Act that resulted in a 39-year depreciation period for QIP, rather than making it eligible for immediate expensing. This correction is a top NAIOP federal priority and its inclusion is a result of our efforts over the last two years. \n \nAllows 5-year carryback of net operating losses (NOL) for non-REIT businesses for 2018, 2019 and 2020. \n \nIncreases the limitation on deductible business interest from 30% to 50% of EBITDA (earnings before interest, taxes, depreciation, amortization) for 2019 and 2020. \n \nExcludes from income the cancellation of debt related to new, emergency small business loans. \n \nProvides small businesses, many of whom are your tenants, with $367 billion in loan assistance so they can keep employees on payrolls and continue paying obligations.\nAdditionally, the legislation would provide direct payments to many individuals and families, extend unemployment insurance and shore up social safety net programs.\n \nThe House must now vote on the legislation, which is complicated because of the need for Congressional members to travel back to Washington. Passage may instead occur through a \"unanimous consent\" procedure essentially requiring sign off from each member.\n \nNAIOP's advocacy leadership throughout this difficult time is just one of the many ways the association is supporting our members and the entire CRE industry. Our legislative team will continue its critical work alongside elected officials and real estate allies to ensure that our industry has a voice in the discussions. Be assured that NAIOP is here to support you during these extraordinary times.", "replies": [{"id": "fliwuyx", "text": "&gt;Allows 5-year carryback of net operating losses (NOL) for non-REIT businesses for 2018, 2019 and 2020. \n\nWhat does this mean?  How would this help a tenant who is trying to negotiate for rent forbearance?", "replies": [], "depth": 2}], "depth": 1}]