What are the alternatives? Tenants are trying to bail out on paying their lease and no new leads.
What options do I have to promote my commercial real estate offices? My tenants businesses have been hit hard by the Virus and I'm struggling to find new tenants. Specially for office spaces. How are the pros dealing with this, could use some ideas. I thought of doing Virtual tours of all the properties to MAYBE get some attention but so far no bites.
[{"id": "fm84biu", "text": "As long as only essential businesses are working, nobody else is going to sign a lease.", "replies": [{"id": "fm84vtd", "text": "I was afraid of that.", "replies": [{"id": "fm85c6m", "text": "You could be extra pro-active and offer space to your state governor's office for covid testing or storage of medical supplies, or ventilator space.  Get on the horn, make 20 calls today to government/fema/hospitals/whatever.", "replies": [{"id": "fm8elsq", "text": "This is great guidance. If you're near a hospital they might need some space for employees to break and rest or admin.", "replies": [], "depth": 4}], "depth": 3}, {"id": "fm8iptm", "text": "All physical tours have halted for obvious reasons, your best bet is to set up a virtual tour with some kind of VR equipment, or just great pictures.\n\nMost tenants that are facing renewals are just asking for 3-6 months extensions at this point, so nobody is moving.. try to weather the storm the best you can, apply for SBA loans if possible, and talk to you bank about options. \n\nTough times for everyone. LL's and tenants we are in the same boat together.", "replies": [], "depth": 3}, {"id": "fm96qnz", "text": "You need to call your lender and try to get loan relief", "replies": [], "depth": 3}, {"id": "fm9og8u", "text": "Renegotiate with your current tenant if you think they could be a viable business down the road, but increase your future leverage. For example, agree to a reduced rent or abated rent now in exchange for paying that back 2-3 months over the remaining lease term, starting Jan 1? Or commit to a longer lease term if they have a short term.\n\nReplacing a tenant, evicting a tenant or suing a tenant are not going to be very viable options at the moment. your best bet is to strike a deal with them and require they are applying for all relevant aid.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fm84o6d", "text": "At this point I don\u2019t think anybody is doing anything unless they absolutely have to. Most smart landlords are also being very accommodating right now because they don\u2019t wanna have to deal with finding a new tenant in this climate. Hopefully in another month will have some sort of a clue what\u2019s going to happen to us longer-term.", "replies": [{"id": "fm84uwp", "text": "I was afraid of that, besides the usual and disinfecting and taking all maintenance steps,all i can think of is hitting 42 floor and CL and just listing like crazy.", "replies": [{"id": "fm85qi0", "text": "It certainly doesn\u2019t hurt to try because I\u2019m sure you got the time right now. But at this point it\u2019s all about just trying to get through the next few weeks and seeing what the future is going to hold.", "replies": [{"id": "fm86o2u", "text": "I've actually got 35,000 SQRT of storage space, the storage idea is good and i'ma pitch it to the governor right now :) appreciate the advice, all the comment karma to you .", "replies": [{"id": "fm87qgo", "text": "Hey man we all got to get through this somehow. This will be my third recession so I kind of have an idea where this is heading. Although who knows at this point.", "replies": [{"id": "fm89gx7", "text": "I inherited my family business, If my father and grandfather made it then so will I", "replies": [{"id": "fm8epwb", "text": "Best of luck to you.", "replies": [], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "fm9om65", "text": "Yelling louder into an empty room won't likely help. There are a few office tenants still moving forward right now in major markets, but they are a small minority.\n\nYou can try, but anticipate not signing new leases for 6 weeks.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fm8571b", "text": "Offering incentives. Frankly very few people want to make a commitment.", "replies": [], "depth": 1}, {"id": "fm872ze", "text": "Wait a few months until this is over.  If you can't cover the mortgage until then,  ask about forbearance from your lender.", "replies": [{"id": "fm8kcd1", "text": " A few months... lol", "replies": [], "depth": 2}], "depth": 1}, {"id": "fm89l47", "text": "You're working on income side. We own maybe 20 commercial buildings and have been working on the expense side. Use this time to apply for all the SBA loans you're eligible for.  Go through your primary bank and get the application in this week if possible. Lots of people going after the same money. This is when banking relationships are really important. Call your mortgage lender and ask for a deferral. All the banks I deal with are offering 90 day deferrals. Some principal only, others principal and interest. Go down your list of bills and see what you can cut. Cut common area cleaning, cut dumpster pickup, etc. \n\n&amp;#x200B;\n\nYou really want to get proactive, become and expert on the SBA loan process and put together an informational email for your tenants to apply.", "replies": [], "depth": 1}, {"id": "fm8byit", "text": "PAYCHECK PROTECTION PROGRAM\nUnder the Paycheck Protection Program, the SBA backs small-business loans through local lenders. The SBA currently works with 1800 lenders and plans to expand that given the anticipated demand. The Paycheck Protection Program is designed to provide a direct incentive for small businesses to keep their workers on payroll by providing each small business a loan up to $10 million for payroll and certain other expenses. If, for a period of 8 weeks beginning from the date of origination of the covered loan, all employees are kept on payroll, SBA will forgive the portion of the loans used for payroll, rent, mortgage interest, or utilities. Up to 100 percent of the loan is forgivable, as long as the funds are used for the appropriate expenses. \n Who can apply?\n\u2022\tBusinesses and non-profits with fewer than 500 employees. \n\u2022\tNo collateral or personal guarantee shall be required for the covered loan.          \n\u2022\tA borrower that has taken out an SBA Economic Injury Disaster Loan (\u201cEIDL\u201d) for purposes other than payroll costs and the other \u201cUses\u201d between January 31, 2020, and the date Paycheck Protection Loans are first made available will continue to be eligible for an additional loan through the Paycheck Protection Program. \n\u2022\tA borrower that has taken out an EIDL for payroll costs or otherwise between January 31, 2020, and the date Paycheck Protection Loans are first made available may be able to refinance its EIDL through the Paycheck Protection Program.\n\nAmount of the Loan\n\u2022\tThe amount of each loan is limited to the lesser of \no\t(a) $10 million; or \no\t(b) the borrower\u2019s average total monthly \u201cpayroll costs\u201d for the one-year period ending on the date the loan is made multiplied by 2.5, plus any refinanced SBA economic injury disaster loan obtained after Jan. 31, 2020.\n\uf0a7\tFor businesses not open yet in that period, the SBA will look at earlier receipts from 2020. \n\u2022\t\u201cPayroll costs\u201d is defined very broadly and includes \no\tsalary, wage, commission, or similar compensation; \no\tpayment of cash tip or equivalent; \no\tpayment for vacation, parental, family, medical, or sick leave; \no\tallowance for dismissal or separation; \no\tpayment required for the provisions of group health care benefits, including insurance premiums; \no\tpayment of any retirement benefit; and \no\tpayment of State or local tax assessed on the compensation of employees.\no\tPayroll costs does not include: \n\uf0a7\tAny compensation paid to an employee or independent contractor in excess of an annualized amount of $100,000.\n\uf0a7\tAny compensation to an employee whose principal place of residence is outside of United States.\n\uf0a7\tAny qualified sick and family leave wages for which a tax credit is allowed under Section 7001 or 7003 of the Families First Coronavirus Response Act.\n\nHow can the funds be used?\n\u2022\tEmployee salary or wages, cash tips, or equivalent payments;\n\u2022\tVacation, parental, family, medical, or sick leave payments (exclusive for which a tax credit is allowed under Section 7001 or 7003 of the Families First Coronavirus Response Act);\n\u2022\tPayment required for the provisions of group healthcare benefits, including insurance premiums;\n\u2022\tPayment of any retirement benefit;\n\u2022\tPayment of state or local tax assessed on the compensation of employees;\n\u2022\tMortgage payments, rent, and utility payments (for business property); and\n\u2022\tInterest on debt obligations before February 15, 2020. \n\nWhat must you certify?\n\u2022\tAn eligible recipient applying for a covered loan shall make a good faith certification that:\no\tThe uncertain economic conditions make necessary the loan request to support the ongoing operation of the eligible recipient;\no\tAcknowledge that the funds will be used to retain workers and maintain payroll or make mortgage payments (on business property), lease payments and utility payments (business property);\no\tThat the eligible recipient does not have an application pending for a loan under this subsection for the same purpose and duplicative of amounts applied for or received under a covered loan; and\no\tDuring the period beginning on February 15, 2020, and ending on December 31, 2020, that the eligible recipient has not received amounts under this subsection for the same purpose and duplicative of amounts applied for or received under a covered loan. \n\nTerms of the Loans\n\u2022\tMaturity \u2013 Loans may have up to a 10-year term.\n\u2022\tInterest Rate \u2013 not to exceed 4%.\n\u2022\tDeferment \u2013 No principal, interest or fees payments for the first 6 months. \n\u2022\tFees \u2013 SBA will not collect any fees on loans issued under the Paycheck Protection Program. \n\u2022\tLoan Forgiveness provisions \u2013 see below\n\nHow does the Loan Forgiveness Work?\n\u2022\tThe amount eligible for forgiveness is the sum of the following costs incurred and paid by the business during an eight-week period following the loan origination date (the \u201cCovered Period\u201d):\no\tPayroll Costs (defined above); \no\tAny payment of interest on any covered mortgage obligation (but not including any prepayment of or payment of principal on a mortgage);\no\tAny payment on any covered rent obligation; and\no\tAny covered utility payment.\n\u2022\tWhile 100% of the loan principal is eligible for forgiveness, it is crucial that businesses anticipate that any amount of the funds spent on mortgage principal during the Covered Period is not eligible for forgiveness. \n\u2022\tSome examples of costs that are eligible for forgiveness include:\no\tPayroll Costs, excluding prorated amounts for individuals with compensation greater than $100,000;\no\tRent pursuant to a lease in force before February 15, 2020;\no\tElectricity, gas, water, transportation, telephone, or internet access expenses for services which began before February 15, 2020; and \no\tGroup health insurance premiums and other healthcare costs.\n\u2022\tThe forgiveness amount may be reduced if the entity\u2019s number of Full-Time Equivalents (FTEs) is reduced during the relevant eight week period;\no\tA borrower that previously reduced its workforce or the salary/wages it pays its employees may be able to limit the reductions to loan forgiveness described above if they subsequently rehire its workforce or increase the salary/wages it pays its employees by June 30, 2020.\n\u2022\tTo verify forgiveness amounts the borrower must provide certain documentation in the form of payroll tax filings, payment receipts on payments for mortgage, rent and utilities, and certification from an officer of the entity that the funds were used for such purposes. \n\u2022\tLoan amounts not forgiven will be paid according to the terms described above. \n\nWho Is Making the Loans?\nAuthorized SBA banks and other commercial lenders. The purpose of the Act was to push for rapid adoption, so contact your local banker if they are an approved SBA lender or go here to find one near you.  https://www.sba.gov/funding-programs/loans/lender-match\n\nWhat documentation should you gather?\nThe exact loan application process is unclear at this point, other than the loan originators will be SBA approved banks. However, applicants should be prepared with the last 4 quarters of Federal and State payroll tax returns, as well as copies of paid health insurance premiums.", "replies": [{"id": "fm8c865", "text": "this is what we have been sending out to our tenants.  Landlords have not been given any type of forgiveness yet.  So the tenants need to apply for the Payment Protection Program.  The people this doesn't help are business that dont have employees.  But there are other grants and programs they can sign up for.  We as landlords need to push our tenants to these types of helps by the goverment.", "replies": [{"id": "fm98zqr", "text": "Sole proprietorships can use the program if they paid them self a salary.\n\nEven contractors and gig workers are eligible.", "replies": [], "depth": 3}, {"id": "fma31ze", "text": "You\u2019re not wrong and you absolutely should be encouraging tenants to apply for these loans, but the rollout of this program is going to be an utter disaster and the funds are going to run out quickly. If your tenants don\u2019t have applications to their bankers by tomorrow I think there\u2019s a real possibility the money will be gone.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fm8ch3q", "text": "i have had 3 fucking deals die on me because of this damn virus.  One deal that is going thru still is my Roofing company deal. dont know why the need retail space lol but they want it.  Maybe try calling companies like plumbing, roofing, hardware stores, that still might be open and getting buisness.", "replies": [], "depth": 1}, {"id": "fm8hbm4", "text": "ride out the storm\n\nbasically leasing is fucked for at least 6 months to a year.   eventually it will go back to normal\n\n\nalternatives are spending time with your family and playing online poker", "replies": [], "depth": 1}, {"id": "fm8yhn6", "text": "Apply for the EIDL (Economic Injury Disaster Loan).", "replies": [], "depth": 1}, {"id": "fm94nyi", "text": "I have an industrial condo project that I had planned to begin selling this summer. We are moving ahead with some curb appeal type projects and there's a good chance that my SBA loans I just applied for are going to pay for it. I haven't received those loan proceeds yet, but it's a good time to hire construction crews because a lot of crews are on the sidelines right now. I'm going to get some discounts for sure. The SBA liquidity is going to be massive this summer when I take these units out to market so we'll see how it goes. I'm cautiously optimistic.\n\nThe Cheesecake Factory announcement was devastating for owners/managers. There's nothing you can do about these tenants paying right now, but **DO NOT** sign anything these tenants are sending out there regarding the rent. \n\nI have Ross as a tenant in another deal and they are a difficult tenant with lots of co-tenancy language in their lease. They told us they won't be paying May rent, and so we are going to get a concession from them regarding co-tenancy and exclusives in the center that is going to allow a dialysis tenant to take down 20% of my building!  \n\nIf you have difficult tenants who are also not paying, see if you can get concessions on action items in lieu of rent you are not going to see for a long time anyway. \n\nAlso, help out your stupid and lazy tenants with getting their SBA$ because that is your money and if you are sourcing the lender/broker, you are going to be in a position to claim your portion of those proceeds. \n\nTry to stay ahead of the curve and be creative. There is a lot of wheeling and dealing going on in So Cal beneath the surface.", "replies": [], "depth": 1}, {"id": "fm9qz7r", "text": "My dads company is doing virtual tours. He even has a client asking for more space. Said things have been delayed and definitely slowed but is getting some business still", "replies": [{"id": "fma65v0", "text": "how is he doing virtual tours? is there a software?", "replies": [], "depth": 2}], "depth": 1}]