Earlier this week, CARW in conjunction with the Marquette University Center for Real Estate and our other real estate industry partners, BOMA, NAIOP, WCREW & IREM conducted a flash survey to understand the impact of COVID-19 on the commercial real estate industry. The questions were developed collaboratively.
Almost 350 people participated in the survey; 72.8% of respondents had 10+ years of experience. This survey provided fascinating data about what those in the industry expect to see in the coming days, weeks and months. Most are expecting the impact of COVID-19 to last at least 3-6 months on their businesses.
As a whole, when respondents were asked what about how they were working with tenants and clients managing through the economic disruption caused by COVID-19, there was not a “one-size-fits-all” approach. Many of the participants suggested that they had been in contact with their lenders and advisors to figure out the best course of action. The most common offer was rent deferrals either with the deferred amount amortized over a few months, the life of the loan, or adding it to the end of lease term. This assumes, or course, that this is a short-term disruption. It seems as though this is often approached on a case by case basis and perhaps offering more assistance to those in retail (restaurants or clothiers) who cannot operate during this time. Many are also suggesting their tenants seek assistance through the SBA or the Paycheck Protection Program.
When asked what opportunities may come out of the pandemic, respondents answered with a variety of ideas. The most common response was the idea that distressed assets and low interest rates would open up a large number of buying opportunities. Industrial will see growth opportunities as industries bring supply chains back into the US. Healthcare was an area of opportunity whether is was short term growth in facility needs, infrastructure improvements, increasing occupancy, etc. Another overall theme was the belief that teleworking opportunities will increase as people are forced to learn how to work effectively from home.
Technology needs and guidance are at a premium right now as people are looking to stay connected and work together with their team remotely. Communication is key! People are seeking assistance in navigating the waters of all of the assistance programs that are being offered whether they are federal, through the SBA, etc.
As a whole, the CRE community remains positive and there was a definite trend of compassion, collaboration and coming together as a community. Whether it was the important role of an advisor in the industry, the urge to stay connected amid uncertain times, or the notion of making sure to work with your tenants because we are all in this together. As always, if you have questions, suggestions, or comments on what CARW can do to help you, please reach out to us. We are all in this together! Marquette University Real Estate will dig into the data further, and reconvene the survey group in 30 or 60 days to monitor steps and record best practices.
Excerpt of results below:
Properties: What tenant strategies are you most seriously considering right now when working with your tenants’ businesses? (select all that apply):
To view the full report click HERE.