CoronaVirus Megathread - Discussion of the current impacts and future predictions.
[{"id": "fklawjq", "text": "Anyone had a deal blow up last week? We pushed up a close from this upcoming week to Friday in case seller / lender / equity got cold feet.", "replies": [{"id": "fkluilz", "text": "I heard of three deals that blew up. One due to lender, two due to buyers.", "replies": [{"id": "flcch3p", "text": "Yes, everyone is getting cold feet at the moment. I'm trying to get super creative to keep the deal flow going.", "replies": [{"id": "fliu4fn", "text": "I\u2019m seeing a lot of new capital pour in from the market dump though. Buyers exiting their stock positions and wanting long term hard assets.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "fklzaas", "text": "Yes I've had two land deals for Multifamily construction blow up this past week. One was in LOI the other was UC last day of DD period.", "replies": [{"id": "flccmxh", "text": "Oh man, that's rough. I had a refi that was on the final day of appraisal review before loan docs were to be drafted and boom, all of a sudden they \"didn't like the value on the appraisal.\" Tsk, tsk.", "replies": [], "depth": 3}], "depth": 2}, {"id": "fkm6twb", "text": "I\u2019ve got a sale on life support because of this garbage.", "replies": [], "depth": 2}, {"id": "fkmk3p9", "text": "Had a total blow up on a huge portfolio on Friday - had a big coinvestor pull out with signatures in escrow, capital call went out Thursday night and they were set to release sigs Friday AM for JV docs. The coinvestor is a major player and they made the call globally on Thursday night to put the breaks on anything they weren\u2019t firm on. Have to swallow the bitter pill because of who they are. \n\nWe\u2019re still closing but spending a lot more from my fund than I would have liked, the hard deposit is huge so walking would be really punitive. Spent all weekend in crisis mode working through scenarios. Blows so hard. \n\nSeparately was expecting an unsolicited bid on Wednesday for a huge property in a city that is going to get nailed by a recession - the sale would have made that fund, put us well above 1.0 DPI. Pretty sure that offer isn\u2019t coming in anymore. \n\nHad a long conversation with the head sector broker at a major shop on Friday and it\u2019s totally game off for new launches right now - people are plowing forward with deals in process but no one is going to launch again until this thing settles down since no one can visit properties. \n\nStuff isn\u2019t good right now. At least LIBOR fell off a cliff so people with IO should get their asses bailed out but I wouldn\u2019t want to be stuck with fixed debt right now. \n\nAlso so so happy I don\u2019t work on hotels or senior housing anymore, those sectors are going to get crushed.", "replies": [{"id": "fksmzs2", "text": "Oof this is all tough. Do you think you'll work with that coinvestor again or are they dead to you? \n\nWe have one trophy asset being marketed right now and I wouldn't be surprised if we went from total bidding war to a sleepy auction.", "replies": [{"id": "fkssa9h", "text": "We will have to work with them - gotta play nice, they have access to a lot of money. \n\nWhat brokers are telling me is that stuff not already at B&amp;F is going to get pulled because of necessity - none of the institutional firms can travel to see stuff. Concurrently the debt markets are locked up, can\u2019t get financing done if the lender can\u2019t get out to see your stuff. Our credit fund is shut down now to any new business as of Monday and we are halting purchases of on the run CMBS. No liquidity to buy stuff right now... \n\n4th quarter is going to be gangbusters (hopefully) when people need to put out $$$. Keep in mind there\u2019s a ton of dry powder from 16-17 vintage funds that are at the end of their investment period so they need to get cash out the door. Let\u2019s see what happens, cautiously optimistic right now but who knows what the broader impact is going to be and I have a bad feeling we\u2019re in the first inning with this virus", "replies": [], "depth": 4}], "depth": 3}, {"id": "flitxrd", "text": "Had a few shopping center deals blow out. They might be salvaged, but it was the lenders who pulled out. One of which was the buyer who was non-refundable in his deposit and will be looking to dispute it. None of our single tenant deals kicked.", "replies": [], "depth": 3}], "depth": 2}, {"id": "fks2ra7", "text": "I had a 10 year lease all ready to sign for a restaurant group last week. I doubt it will go through now.", "replies": [{"id": "fkshqnz", "text": "Ugh same here. Mine was with a mega church. I guess you can't pass the offering plate if no one is showing up to church.", "replies": [], "depth": 3}, {"id": "fksn1zn", "text": "If your alternatives are still restaurants, you can probably just delay the Effective Date by 3 months, no?", "replies": [{"id": "fkspy4y", "text": "Yeah that\u2019s on the table. Problem is it\u2019s a Chinese restaurant and they\u2019re very concerned about the supply lines in China. They\u2019re taking their time, hopefully it\u2019ll come together", "replies": [{"id": "flccflz", "text": "I was personally not counting on any restaurant deals moving forward in the short term, surprisingly, I've got two still pushing forward on negotiations. Of course, they're asking for the world (lower rent, more abatement, etc) I'll keep pushing. Better leased at a decent rate vs. vacant.", "replies": [{"id": "fliugo7", "text": "I\u2019ve actually seen some new restaurant deals have movement during all of this. QSR deals with drive throughs. Some of my restaurant operators of QSR franchises have actually seen sales growth due to casual dining shutting down. Seeing casual dining sales down significantly across the board, but QSR unit sales have rebounded a bit over the past few days. Meanwhile many casual dining tenants are bleeding out. I\u2019ve had reports of multiple corporate backed net leased tenants asking for a rent abatement immediately. Some operators may be able to leverage sale leasebacks to raise the cash they need to stay afloat, but many of them might already be over leveraged with the past few years of drastic expansion. This whole thing, even if it\u2019s not drawn out, will likely clear out some restaurant competition. Won\u2019t be pretty for some of these guys.", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}, {"id": "flccez5", "text": "That's definitely not a bad idea to try and push a deal forward. With new construction restaurants, most ask for the first 3 to 6 months for construction as it is.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "fkw8lk4", "text": "I had FIVE deals blow up yesterday. This is very bad.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fklbd2k", "text": "Had a deal fall apart a few weeks ago. Buyer was from China and could not get back in the country to close. \nHad another client last week hold off on offering on a property as they are waiting to see how the market and interest rates shake out. I think the next few months are going to be very slow and then hopefully a busy late summer/fall.", "replies": [{"id": "flcc4u0", "text": "I used to feel \"left out\" for not having a ton of Chinese buyers. Guess it does go both ways. I agree I can't wait till we find a solution (cure/vaccine/treatment) and see a nice busy period after that. Hoping it will happen in 2020 too!", "replies": [{"id": "fle42ta", "text": "Vaccine/treatment won\u2019t be out until at least mid-2021 per Dr. Fauci. Tests need to be ran and clinical trials need to be conducted.\n\nBest hope in the short run is that the temperature increase over summer \u201cslows down\u201d the virus and we have enough PPE/ventilators to help those in need", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fkld8on", "text": "I\u2019m hoping my Commercial tenant renews at 5 years. They previously asked for 3 month extension, I said no either 5 or 10 year. They were planning to purchase another space and move out, which has been pushed back months, so I\u2019m hoping they renew at 5 years. \n\nResidential unit - offering a 12 month at same rate. \n\nI\u2019m sticking with my game plan to buy 2 units a year, but at this point, commercial is my only interest, and I am speculating that healthcare and industrial/distribution centers will stay solid, but retail/office will head towards a decline.\n\nIn dentistry, outpatient medical, etc - I am betting we see some repurposed former big box stores turn into clinics over time", "replies": [], "depth": 1}, {"id": "fkleaak", "text": "Predicting a severe impact to office with proof that more people can successfully work from home", "replies": [{"id": "fkll6nl", "text": "Interesting take. I agree this could jumpstart that", "replies": [], "depth": 2}, {"id": "fkmjnpy", "text": "I'm on the fence.\n\nThe work from home experiment is just ramping up. With so many school closures, and daycare closures incoming, productivity at home compared to the office will suffer for many.\n\nThe conclusions will depend on how many of a company's employees have children that need monitoring at home. Also, I believe that an expectation that this is a temporary situation will lead employees to slack off less. In a more permanent scenario I think the average employee is not well suited to work from home.\n\nIf work from home were objectively more efficient, I think the market would have already gone there.", "replies": [{"id": "fkmmzf8", "text": "I heard a 14 day mandated quarantine is coming", "replies": [{"id": "fkmn3bv", "text": "Any clarity on if this is for confirmed infected? Enforced by state or fed?", "replies": [{"id": "fkmpysa", "text": "Federal", "replies": [], "depth": 5}], "depth": 4}, {"id": "hobrq08", "text": "Sobering comment two years later.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "fkmo6wh", "text": "I\u2019m mixed on this. I think there will be industries who thought they couldn\u2019t and realize that can, and they may convert, but at the end of the day, I think office will still be needed. \n\nMany industries post 2008, already has went through this exercise and from 2013-now we have watched a lot of companies bring people back to the office in unique ways. And if WFH fully worked, then coworking space (which I think is not a sustainable business - and I\u2019m interested to see how this withstands COVID) would not have become a thing. A lot of employers see the benefit to office space because of the think tank environment that it incubates. As as much as we would like to be online, human interaction is still key for a lot of society. \n\nThere\u2019s also a lot of industries that just can\u2019t support WFH culture due to laws and the type of information they deal with on a day-to-day basis. \n\nWhat I do think is that we are going to see an evolution of the office space, yet again. With the new model, it\u2019s close quarters, people packed together, no walls, etc,  making people more susceptible to catching illness and I believe that due to this, we may actually see space change to support \u201csocial distancing\u201d because the way offices are set up now, they do the exact opposite. \n\nThese are just my observations of course, from a former CRE brokerage - economic research analyst perspective.", "replies": [], "depth": 2}, {"id": "fl2sc78", "text": "Agree. Have already heard rumblings from big firms (complete and total hearsay, of course) that this is something to dogear for lease renewals. Downsize physical office space. \n\nImagine if big to small accounting/consulting firms started throttling back on office space?", "replies": [], "depth": 2}, {"id": "hstzynr", "text": "And here we are like 2 years later and this is the only right prediction that came true. I like your crystal ball.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fklfga2", "text": "I was told id receive an offer last week with a CRE company. I got an email on mid week saying:\n\n&gt;\"all new hires have been slightly delayed. Dont go anywhere and we will be in touch shortly\"\n\nShould I be worried about this?", "replies": [{"id": "fklkzss", "text": "No, they have a lot to figure out this week, transitioning employees to working from home, scrambling to address client concerns, deals getting cancelled, etc. It's not that they aren't interested in you, they just have more pressing concerns.", "replies": [], "depth": 2}, {"id": "fklpgnb", "text": "If that is a direct quote, very.\n\nYou don't want to work for a company that can't spell.", "replies": [{"id": "fklpl2h", "text": "That was my phone being stupid. Edited", "replies": [], "depth": 3}], "depth": 2}, {"id": "fkmjh0v", "text": "No, all banks are doing worst case analysis and waiting for markets to stabilize. I wouldn't be surprised if most banks put a 60 to 90 day hold on new hires.", "replies": [{"id": "fljsn3m", "text": "Idk, I live in CLT. Most of my neighbors are bankers. Wells and BoA both ramping up hiring for refi business. Strange times.", "replies": [], "depth": 3}, {"id": "fm3adr7", "text": "I work for one of the big companies and we put in a 90 day freeze at least 4 weeks ago and it\u2019s going to get extended.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fkll042", "text": "Banks are going to tighten their underwriting on basically everything as a result of this. Hotels and other leisure based real estate will get hit hard and take a while to recover. Acquisitions and new construction will be very difficult. If you are a broker, it\u2019s going to be hard, but it creates an opportunity to pick up clients/market share if you are able to get deals done during a time like this.", "replies": [{"id": "fkmghj4", "text": "My bank, super regional/Lpo national, is tightening up. Market risk is coming off the table, cycle tested highly liquid sponsors now mandatory. MF adc has been a stalwart, now in question. Value add office is going to be a red headed step child. Non-zero Libor floors are  descending with flight of the valkyries in tow.\n\nRetail was already tight and now shutdown. Hospitality more so. It's about to get real out here", "replies": [{"id": "fkmh51t", "text": "Sounds about right. As a loan broker, MF refi\u2019s and relatively stabilized MF acquisitions are probably the majority of business I\u2019ll be focusing on for a while. Good tip on the cycle tested sponsors as well", "replies": [{"id": "fkmj80p", "text": "At least near term, the mandate is for stabilized cash flowing assets with the least exposure to the pandemic.\n\nPersonally, I think the markets oversold a bit on the front end. But I don't think the market is ready for, or have priced in, banks to stop lending. Through our syndication desk and personal contacts, things are about to seriously slow down across the board. We had deals approved on Friday, but the bar is much higher. \n\nLeverage is about to become very hard to come by and I don't think the markets are ready.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "flc9z42", "text": "I'm a broker and finding my clients the right financing is already proving to be a little more challenging but I never give up. Had a $1.95M refi deal no go through a few days ago, already got it placed with a lower rate at a different bank!", "replies": [{"id": "flitr2q", "text": "I\u2019ve seen a number of lenders hit pause on shopping centers as some tenants are already asking about abatement, but I\u2019ve heard there\u2019s still an appetite with many lenders for long term net leased deals. Anyone else hearing some of the same?", "replies": [], "depth": 3}], "depth": 2}, {"id": "fmftnuo", "text": "Does this mean price drop?", "replies": [], "depth": 2}, {"id": "fofj4yp", "text": "Now that lenders have had some time to monitor the situation, we ran a survey about how they are reacting. Here are the key points: [https://www.stacksource.com/blog/how-lenders-are-reacting-to-the-quarantined-market](https://www.stacksource.com/blog/how-lenders-are-reacting-to-the-quarantined-market)", "replies": [{"id": "fogn055", "text": "Thanks good article. Just read a few of your blogs. FYI - the 80% LTV is not dead! Maybe just for your brokers... (;", "replies": [{"id": "fohfj1a", "text": "Haha it's not dead from a bridge/value-add perspective, but no longer can you underwrite to a true 80% LTV for stabilized without putting a lot of money on reserve.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fklol6i", "text": "I'm expecting commercial tenants in some of the properties we manage to ask for some relief from landlords as their businesses slow down over the next few months.\n\nThe big unknown for me is how to proceed on a mixed use project we currently have working towards review and permit. I'm not expecting a lot of new leasing activity in the next few months and don't want the investor saddled with an empty building at completion.", "replies": [{"id": "fklpksx", "text": "&gt; I'm expecting commercial tenants in some of the properties we manage to ask for some relief from landlords as their businesses slow down over the next few months.\n\nThis is definitely going to happen.", "replies": [{"id": "fkm4dvv", "text": "Already happening to me.. Even more so with tenants who are using this opportunity to negotiate more favorable renewals.", "replies": [{"id": "fkm9p60", "text": "I mean, they have a legit increase in bargaining power of a sudden, especially if it's something like a restaurant tenant. Who is going to replace them and open a new restaurant in that location right now if they leave? Nobody, that's who.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "fkmdl4y", "text": "&gt;I'm expecting commercial tenants in some of the properties we manage to ask for some relief from landlords as their businesses slow down over the next few months.\n\nThis. I had a restaurant tenant open 3 weeks ago in a new strip and of course shit has now hit the fan. \n\nAlso, to your second point, I was planning on going to ICSC Charlotte and had meetings lined up but all of that is thrown out the window now. Have 3 mixed use projects to pitch. 1 completed with 2 units available, 1 about to start paving, and 1 just starting construction. Really not looking forward to these conference calls in upcoming months with the investors.", "replies": [], "depth": 2}, {"id": "flccnd7", "text": "We already had our first tenant request relief on a multi-tenant office building we manage. They asked for abatement (free) till July 1. Ummm... no.  We will be willing to discount slightly, on a mont- by-month basis at best. I need to review it with the landlord first.", "replies": [{"id": "fld7pv8", "text": "At this point we're only deferring rent. If your business is shut down and you can't earn income to pay rent, then you won't have to pay it this month, and you won't be charged late fees, but you will have to pay it back later when you're operating again.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fkmd5ug", "text": "Have received 2 emails this last week with deals blown up. One multifamily U / C about 6 months into DD  and the second was a restaurant LOI that has been pulled.", "replies": [{"id": "fl65gge", "text": "Why such a long dd on multi-family?", "replies": [], "depth": 2}], "depth": 1}, {"id": "fkna237", "text": "WeWork will shut down a lot of their locations and a lot of office users will rethink hotelling.", "replies": [], "depth": 1}, {"id": "fknblco", "text": "Boy, I had a big closing last Friday and you better believe I've been crossing my fingers for the past week before it closed. I anticipate everything will be frozen until we see if there is a hard recession from this or not, so I don't anticipate any decent pay checks in the coming months. I've also been interviewing with another broker and I'm going to go ahead and assume that I won't be migrating right now after all. Big possibility a huge recession is coming from this, but as the other comment said, still opportunities for seasoned agents who have their feet deep in a submarket.", "replies": [{"id": "flivd8w", "text": "Agreed. Long term net leased deals are still moving, but relationships is what brokers will need to carry themselves through this dip, big or small.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fksi2b5", "text": "A couple deals fell through and new listings in the pipeline decided to hit pause. The CCIM exam in the spring was also postponed which is a bummer. \n\nWe're in a tourist town so I'm terrified things here are going to get weird. I also have thousands of SF of class A office space listed in a new mixed use project that is supposed to break ground any day. Just going to put my head down and chug along I suppose.", "replies": [], "depth": 1}, {"id": "fkvn33z", "text": "Brokers in retail/hospitality/leisure -\n\n&amp;#x200B;\n\nCan you comment on COVID's effect on your deals and/or pipeline?\n\n&amp;#x200B;\n\n1. What's happening with deals under escrow?\n2. If you're cold-calling, what is some common sentiment of owners?\n3. Got anyone calling you freaking out about their stores going dark?\n4. What are you doing to mitigate risk/ add value for clients?\n\nInterested to hear about other property type's issues, too!", "replies": [{"id": "flivis7", "text": "Retail brokers here. We\u2019re covering exactly what you\u2019re asking above in a webinar this Friday. Reach out directly and I\u2019m also happy to share some personal deal stories in real time about what we\u2019re seeing out there.\n\n[Live Market Address | COVID-19 Impact in Commercial Investment Property](https://attendee.gotowebinar.com/register/5242899557056040715)", "replies": [{"id": "flivujh", "text": "Fantastic, thank you! I will reach out to you.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fkxei4m", "text": "[Data Visualization Of State By State Confirmed COVID19 Coronavirus Cases](https://youtu.be/3MQ942Ord_E)", "replies": [], "depth": 1}, {"id": "fkzxedk", "text": "My understanding is that the debt markets for hotels have completely dried up to literally being non existent and the only thing that is selling in retail are single tenant CVSs. I am in retail and our CMBS lenders are also saying they can\u2019t do anything atm so a special servicer is going to be looking at our cmbs loans. Some of our lenders have cut interest rates for us", "replies": [{"id": "fldog87", "text": "Im in retail and just got burned in the middle of a CMBS loan refi.  Even when CMBS resumes, it sounds like retail will have a hard time finding financing unless its a dominant center.  We are using this time as an opportunity to seek forbearances starting with April 1 payments.  Tell me more about lenders cutting your interest rates?", "replies": [{"id": "fliv8tc", "text": "We\u2019re hosting a webinar this Friday about the state of capital markets for retail investment property if you\u2019re interested. Should cover some deal stories and tactics to help through all this. \n\n[Live Market Address | Retail Investment Property](https://attendee.gotowebinar.com/register/5242899557056040715)", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fl7ylqa", "text": "Single-tenant retail with strong credit or drive thru QSRs still seems healthy. Clients are more focused on investment grade and strong corporate backed leases. Currently working on 7-Eleven, Firestone, Chick Fil A, Wendy\u2019s, Popeyes, dollar general, etc. All moving forward without major change in lender quotes (and no repricing so far for deals under app). \n\n\nHotels are non-starter with lenders. It sounds like some CMBS is still quoting but suspect this will dry up. \n\n\nMulti-tenant retail with service oriented tenants (gyms, salons, sit down restaurants, etc) is going to take a long time before lenders want to quote. Many landlords (including myself) have already received tenant notices asking for rent relief or total abatement. These are national, well known tenants, so I can only imagine how bad it just be for ma and pa tenants. \n\n\nMulti-family is still active. Lenders are giving best pricing here. \n\n\nWe are starting to get a lot of existing clients calling in about debt payment relief. Some plan to just stop paying mortgages since tenant income has dried up. Lenders will have to eat it or pray for some government intervention to help. \n\n\nSource: commercial loan broker / property owner.", "replies": [{"id": "fliutzw", "text": "I second all of this. I\u2019m seeing the same things. \ud83d\ude4c\ud83c\udffc\ud83d\udc4d\ud83c\udffc\ud83d\ude4f\ud83c\udffc", "replies": [], "depth": 2}], "depth": 1}, {"id": "fldw8o0", "text": "What are some myths about Real Estate Market that the Coronavirus has brought? Is there anything I can tell clients to help relieve misguided beliefs they currently may be holding?", "replies": [{"id": "ft497qe", "text": "Buyers are thinking this is another 08.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fle4iiy", "text": "I was in the middle of working an employment offer for my first job out of college for a big shop. Hiring freeze until further notice. Guess it's back to the drawing board ... I'm so hungry to jump into this industry. Anyone else in the same boat?", "replies": [{"id": "fli4ebl", "text": "I was in the same boat, not right out of college, but trying to move into a big firm. Really sucks", "replies": [], "depth": 2}], "depth": 1}, {"id": "fleyclk", "text": "This is a webinar I watched that got a lot of positive feedback.  Helping to diffuse some of the negativity with stats and data and all that.  No shameless self-promotion and no deal pitch.  Refreshing given all the \"guru\" videos floating around.   [https://www.youtube.com/watch?v=ZU6VyPkl99k&amp;t=590s](https://www.youtube.com/watch?v=ZU6VyPkl99k&amp;t=590s)", "replies": [{"id": "flj4th0", "text": "That\u2019s funny. He was looking for a $100k debt substitution a couple weeks ago so I don\u2019t think he\u2019s doing all that well.", "replies": [], "depth": 2}], "depth": 1}, {"id": "flh19a8", "text": "Oh I\u2019m sure. We are confident things will bounce back though and still have raises planned for end of 2020 ( may have to be pushed til 2021 tho)\n\nIn terms of interest rate relief - we\u2019ve had lenders remove the floors on our variable loans. We\u2019ve had lenders knock off a whole point from the fixed rate through the maturity of the loan. Another center we are trying to do I/O for the next 6 months. It\u2019s all fluid tho. We\u2019re probably going to grant 2-3 months of relief for 25% of our 1400 tenant portfolio overall. Lenders know that this is bad and have to be reasonable. It\u2019s the CMBS lenders that are pushing back atm due to how the loan is pooled I suppose. The feds will have to do something with the CMBS side so it can trickle down.", "replies": [], "depth": 1}, {"id": "flk89gb", "text": "I don't know much about debt substitution in syndications but isn't debt sub in general simply a way of tightening the bottom line.  Does it have tax advantages?  Are people doing it now because they won't be able to do it later?    Does a debt substitution necessarily mean a person or company is \"in trouble?\"", "replies": [], "depth": 1}, {"id": "floh4fu", "text": "I know this sub is mostly brokers but wanted to share my experience so far as a developer/landlord.\n\n\\- Retail tenants just can't pay. Working with them. Some need 50% discount to be paid back. Some just need straight rent forgiveness. That I expected.\n\n\\- Some office tenants are also struggling but less so than retail. Some have very little cashflow so we're working out deals. 50% discount for 2-3 months to be paid back in installments over the rest of 2020. Did not expect this as much.\n\n\\- Weirdly not a single residential tenant has reached out yet. Our units are fairly expensive in HCOL area. I expect we have very few service sector workers. We're a bedroom community of NYC so I expect a lot of them are still getting a paycheck working from home. Will be interesting to see what happens on the 1st of the month.\n\n\\- Banks have been great. Was one the phone with several today and all of them have offered 90-day forbearance. We have a very strong PG from our principal so I assume that has a lot to do with it. Some banks offering principal only forbearance. Some offering no payment whatsoever. \n\n\\- On schedule to close on a $2.5 perm loan next week. Keep waiting for the call that they're pulling it but so far everything moving forward.\n\n\\- In talks with a different bank to put a perm loan on a fully tenanted medical building. Term sheet will come next week but indicative rate is 2.9%! \n\n\\- Above bank is ready to do a deal because principal has a very large and long standing deposit relationship. Most banks I talked to about the deal were only willing to look if it included $2M+ minimum deposits. They always always want the deposits but on this one it was going to be a requirement/contingency.\n\n\\- Several banks have not adjusted their floor rate which surprised me. Probably just a matter of time.", "replies": [{"id": "florjuk", "text": "Great data! Thanks for sharing.", "replies": [], "depth": 2}, {"id": "fnh0qhl", "text": "Multifamily data point: our portfolio (over 20,000 units) has collected 92% for April, compared with 97% for March. We are hoping unemployment benefits roll out to help ease some of those delinquencies, but so far it wasn\u2019t as bad as we thought.", "replies": [], "depth": 2}, {"id": "fnpn4d9", "text": "May I ask your opinion on shopping malls - do you think some will fold/close up due the Coronavirus? Do you think that consumer habits will change to a degree where they will go to the mall less?\n\nMall REITs are very low priced now; I'm really curious as to how Corona will impact them long term. Some of my friends think this will be the \"nail in the coffin\" as consumer switch even more to online shopping. But I have a hard time believing that people won't want to go shopping again; people like to get out of the house, try on clothes, touch things, etc.\n\nBUT... I'm sure there will be a % of people who feel vulnerable and will just go out in public less. So I would think that mall traffic would decline, I just don't know by how much.", "replies": [{"id": "fnpr6bi", "text": "Not at all my area of expertise so I'm guessing as much as anyone else. I think malls in the traditional sense were already really struggling. This will hurt a lot. From what I've seen, the direction that most malls are heading is more experiential. Look at the new American Dream Mall by the Triple Five Group. They also do the mall of america. It's more like an indoor theme park than a traditional mall. Rides, water park, indoor skiing, etc. Obviously your average mall is not going to put in a water park but retail is becoming more entertainment based. Gyms, especially new interesting ones like Orange Theory, are replacing the traditional retail tenants. That will continue. Retail tenants will get smaller as people can use the space to try on stuff and then have it drop shipped to their house.", "replies": [{"id": "fnpzv8g", "text": "Cool, thanks for your insights", "replies": [], "depth": 4}], "depth": 3}, {"id": "hjmmti0", "text": "Shopping Malls (meaning has an enclosed roof) and shopping Centers (meaning open-air) are completely different animals.  Where the first, is in real big trouble) and the second, is not so.  \n\n(Top 50 best AAA+++ enclosed malls in the USA notwithstanding)", "replies": [{"id": "hjn4yts", "text": "It seems like many malls have recovered quite well. I have been in recent months and the traffic was quite robust. thoughts?", "replies": [{"id": "hwl0zql", "text": "The security malls offer is now important once again.  Soho in Manhattan is a shell of what it once was.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "fo99xdr", "text": "Have any of the banks given you deferment on your spec projects?", "replies": [{"id": "foagepb", "text": "I don't build anything on spec.", "replies": [{"id": "foeh3wp", "text": "I thought you said you were a developer", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "flvh4qo", "text": "I'm a city planner in a town with a large amount of CRE. Any advice on how I could help?", "replies": [{"id": "fm85r17", "text": "I\u2019d love to see public hearings go online so I can keep my deals moving forward. I realize this is a huge ask but I\u2019m in a holding pattern on variances and zoning and it\u2019s putting a squeeze on my sellers/lessors.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fm8zd41", "text": "Companies forced to switch entirely to working from home because of coronavirus have provided a large-scale case study for remote work. Experts think it will reshape the way companies see offices in the future.\n\n[https://commercialobserver.com/2020/03/coronavirus-provides-a-wide-scale-work-from-home-experiment/](https://commercialobserver.com/2020/03/coronavirus-provides-a-wide-scale-work-from-home-experiment/)", "replies": [], "depth": 1}, {"id": "fmfp8cf", "text": "How do you feel the Canadian property market will be affected given the low dollar and stability of the countries banking system?", "replies": [{"id": "fov0h8f", "text": "Still going to tank", "replies": [], "depth": 2}], "depth": 1}, {"id": "fmugs2o", "text": "My two cents from the investment side with properties in all commercial asset classes across North America. \n\nCurrent impact:\n\n\\- lending: there is very limited liquidity in the market. lenders are only lending to their clients and mostly on files that were started before this crisis. Very few lenders are looking at new properties for long term financing and the spreads are insane even from big banks.\n\n\\- retail tenants who are closed can't pay rent, even some major corporate chains, we received about 50% of April rent from our grocery anchored and strip malls\n\n\\- office tenants who are not using their offices are wondering why they should pay rent and trying to use the situation, but most companies are still running albeit at a slower pace and revenues aren't as strong. Some will struggle to pay rent.\n\n\\- industrial tenants, it really depends on what they do. Some are calling for more space, and some can't work and are asking for rent relief. \n\nLonger term impact: \n\n\\- economy: depending how long these lockdowns last, companies (both retail and office) will go bankrupt, and the re-start of the economy will be a lot more gradual than the pundits are saying. people won't run outside and spend a bunch of money right away.\n\n\\- lending: banks will tighten their underwriting even more, especially on retail and office, and higher spreads will make up for the lower interest rates. At the moment, there's not a lot of li\n\n\\- retail: e-commerce will most likely increase its market share even more now that people had to do it for several months, and this will affect even the best super-regional malls. \"essential services\" tenants are going to be the new e-commerce resistant tenants. a lot of tenants will struggle and properties will suffer. \n\n\\- office: I believe the work from home trend is overhyped with what is happening. A lot of people are realizing how difficult it is to work from home. Also the open space offices might be reimagined to limit the spread of diseases in the future which might balance out the reduced space needs if working from home because more prevalent.", "replies": [{"id": "fnmm76v", "text": "Update: \n- lending has dried significantly. Hard to find any long term financing options even for the very best assets. \n- retail collections in our portfolio are at about 50% of a normal month\n- office and industrial are doing mostly ok for now", "replies": [{"id": "i2sdpq8", "text": "Any new updates?", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fnk3ot8", "text": "I am conducting some surveys on the topic of post covid workplace. Please take 10 mins to provide some feedback so we can backup all these speculations with real data from real people! www.postcovidworkplace.com", "replies": [], "depth": 1}, {"id": "fodbthu", "text": "Would appreciate some feedback...I own a 7k sf single-tenant commercial property. Tenant sells electrical supplies to contractors/construction industry (which is largely still operating in my jurisdiction), and is a multi-national with about $25B in gross revenue (private company, I did some googling). They are open with reduced hours and only allowing pickups of orders.\n\nThey've asked for a 50% abatement of base rent for 3 months. It's my primary source of income. I can probably manage, but I don't think the savings they'd get if I agree (less than $5k/month) is really going to effect their overall liquidity or risk of going under. And if they do go under I'm still out the lost rent anyway.\n\nI'm inclined to give them a 25% deferral to be re-paid over the life of the lease (still 3 years left), or refuse altogether. The request was soft to start, but they could try to just withhold rent down the line like we're seeing in some places. \n\nGiven our respective sizes, what would you do? Any thoughts appreciated.", "replies": [{"id": "fooxelo", "text": "Given the revenue metrics, I believe there are only two options:\n\n1. Refuse an abatement/deferral all together based on this being a bite sized liability for the company. They are likely being opportunistic and asking for rent reductions portfolio wide.  You'll know if they are going under or not. \n\n2. If you like the tenant, restructure to give them a break on rent and tack on term on the back end. \n\nI get the current climate makes for a difficult time for everyone, but their solvency issues aren't your problem. If you rely on this for your primary source of income, its likely the rent means a lot more to you than it does to them.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fpaigaq", "text": "I would suggest moving to online sources to help keep an eye on the market. Listing services like Loopnet, or the free version of it CIMLS can be used to help find and compare properties or get your own properties out there. As we are all having to change our normal schedules, I can see a migration towards listing services begin to occur. I am in fact trying to learn how to use these established services for my own. With everything changing as it is, I need to learn to change with it.", "replies": [], "depth": 1}, {"id": "fqhbh7i", "text": "I\u2019m curious if anyone is seeing movement on the leasing side in the states that have been opened for a week or two now?", "replies": [{"id": "fqinw62", "text": "We've gotten offices leases done that started post covid in Chicago, despite the ongoing lockdown. Retail is much more impacted though.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fqss0se", "text": "LoopNet, 4/27/2020: [\"UBS Estimates 100,000 More Retail Stores Will Close by 2025\"](https://www.loopnet.com/learn/ubs-estimates-100000-more-retail-stores-will-close-by-2025/174318906/)", "replies": [], "depth": 1}, {"id": "fqzqnch", "text": "I suspect more office space to become vacant as companies realize their workforce can function remote. Thoughts?", "replies": [{"id": "fqzroxg", "text": "Highly dependent on your industry and job function", "replies": [], "depth": 2}], "depth": 1}, {"id": "fszcki2", "text": "We own hotels primarily in the mid-Atlantic around D.C. We certainly took a hit, primarily due to stay at home orders. However, we're seeing hints of optimism as occupancy is slowly beginning to improve. My opinion is that people are going to travel still, but are going to be less likely to do so by air. You'll see more day trips and trips that are done by car than plane. Our occupancy is still lower of course, but we are off from the April lows we saw as states begin to open. Our cleaning protocols have become extremely stringent, as we sanitize every inch of the hotel.", "replies": [], "depth": 1}, {"id": "ft489ag", "text": "As an owner it\u2019s pretty difficult but as a broker I\u2019m picking up a lot of clients. All my brokerage deals are on extension. Things are finally starting to move.", "replies": [], "depth": 1}, {"id": "ft48vat", "text": "I\u2019m a month away from a close on a 20,000 sqft office deal on Long Island. It\u2019s been a struggle being able to keep the deal alive. Had an industrial deal blow up Tuesday. But we\u2019re speaking to other potential buyers now. Everything is on extension but moving. So far corona has cost me 1 deal. But as an owner it\u2019s been a pain.", "replies": [], "depth": 1}, {"id": "fumvqzd", "text": "Any multi owners concerned about end of July (CARES act roll off)?\n\nShits been rosy the past few months, but are we just in the eye of the storm?", "replies": [], "depth": 1}, {"id": "fuqwh6z", "text": "How is the leasing side going for everyone with offices?  I\u2019m assuming retail is an absolute standstill.  \n\nEveryone is focusing on the rent collected and haven\u2019t seen any articles on leasing.", "replies": [{"id": "fuqwquj", "text": "Small &amp; midsize leasing slower, but still reasonable activity. Pullback on large, long-term corporate leases.", "replies": [{"id": "fvy6q9u", "text": "In central Florida and I'm seeing an uptick in 1,000sf-3,000sf size due to corporate downsizing. The larger floor plates seem to be eviscerated.", "replies": [{"id": "fw24tnp", "text": "Agreed.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "fyro2vg", "text": "Agree with cbarrister, small and midsize is about only moving at all.  Spec suites seem to be showing high concentration of where interest lies.  We own a few Class B suburban office bldgs. in Twin Cities metro and thankfully we are positioned for this type use.  Anyone else seeing this?  We are prepping a space we got back and planning on building spec suite based on this, all in the 3,000-5,000 sf range.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fvdlew7", "text": "How badly will my hometown's downtown be hit? \n\nIt's roughly a third cosmetics, tanning, barbers etc. Another third are restaurants and the last third are various professional services and construction.\n\n\nLocated in the Bay Area. Has very high rents like $30 a SF and $400 a SF to buy.", "replies": [], "depth": 1}, {"id": "fyyixsx", "text": "Investors are going heavy on real estate investment because it's the most safest ways to invest money in the current market situation.", "replies": [{"id": "g0wice8", "text": "Gold?", "replies": [], "depth": 2}], "depth": 1}, {"id": "g11so9a", "text": "You would think there would be an influx of sellers....not the case...we have about nine thousand properties for sale on reoclose but these properties are owned by the municipalities when they take them back from taxpayers.", "replies": [], "depth": 1}, {"id": "hws89os", "text": "I would love to hear everyone\u2019s comments now that we are further along &amp; into 2022. I\u2019m 1yr in the business - specifically downtown Orlando office leasing. T Rep and Listing Broker of large office building. Interested in learning a across the nation what is everyone seeing in office space leasing?! New designs to get employees back into the office? Coming back to the office? \nThank you in advance for sharing your experience!", "replies": [], "depth": 1}, {"id": "i3bs61y", "text": "Yes, it has impacted adversely. Hoping for the best and regain the position in the market and recovered losses.", "replies": [], "depth": 1}, {"id": "igv3p4k", "text": "[Here](https://www.myvirtudesk.com/blog/current-state-of-the-u-s-economy-q1-2022?utm_source=FB,+IG,+TW,+LI&amp;utm_medium=social+media&amp;utm_campaign=Carousel) is something to read about the current state of the U.S. economy.", "replies": [], "depth": 1}, {"id": "irpfrc8", "text": "Jesus I just read half this pinned thread before I realized it is 2 years old. Time to unpin or update?", "replies": [{"id": "irrq2ll", "text": "Good point! Unpinned.", "replies": [], "depth": 2}], "depth": 1}]