Blog #coronavirus

Lee and Associates Long Beach is pleased to announce 3D virtual tours are now available with the addition of Matterport.  Per Matterport's website, sell at a 4-9% higher sale price, decrease time on market up to 31% and 90% buys are more compelled by a listing with a 3D tour.  With coronavirus and COVID-19 social distancing concerns and the reluctance to tour at all, this may be the only way to get your space shown.  Additionally, generating higher engagement and interest in these slower economic times may be to key to closing the deal and getting that buyer/tenant.  Click here for a demo.

Originally posted February 3rd, but things have changed considerably since with the global coronavirus COVID-19 pandemic and social unrest!  With the desire to socially distance and find open spaces one must wonder if people will be motivated to avoid the dense urban centers and move to the more spread-out area of the suburbs.  This would be a bit of a countertrend to previous years with the TODs (Transit Oriented Developments) and mixed-use developments in city centers.

On the other hand, the desire to avoid crowds and packed retail buildings, more folks are using ecommerce.  This will only increase the already overwhelming demand for warehouse space, especially in the areas close to the population base where faster delivery is possible.

These changes have only led to a stronger argument for this trade idea!

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This trade seems to make more and more sense for the commercial real estate investor of late.  Multifamily appears to have peaked after an extended run and is experiencing downward pressure over concerns with governmental/legislative issues, especially regionally here regionally in Southern California.  Meanwhile, Industrial is starting to take over as the hottest commercial real estate segment.  Also, some apartment owners no longer have the tolerance to deal with the higher demands and maintenance needs multifamily typically requires or they have moved out of the area.

The solution?  Sell your Multifamily Assets and Trade into Industrial Real Estate Properties.  Why Industrial?  Ecommerce and its explosive need for space.  With all the big box retail giants like Sears and Toys R Us shutting down, ecommerce has disrupted the industry transferring the need for space from store to warehouse.

In 2017 e-commerce accounted for 9% of all retail sales in the United States and is expected to grow to 12.4% this year!  Based on those numbers e-commerce appears to still have a lot of room to run.

It’s also normally considered an easier asset to manage with less demands.

So, what’s the first step if you’re interested?  Get an idea of what your Apartment Building is worth, so you have an idea of your budget.  Next get a list of available properties to trade into.  This can include leased properties with stabilized returns, upside potential or vacant properties with proforma projections.  A good broker should be able to help you with this, feel free to reach out if you do not know where to start.

A California Commercial Real Estate Legislative alert went out last Friday from AIR about SB 939, a COVID-19 related measure.

The proposed legislation could require lessors to defer CA rent obligations for more than a year or allow the tenant to negate the lease and walk away with no responsibilities for tenant improvements.

If passed the measure would be in effect for 22 months from March 2020 or for two months after the end of the state of emergency, whichever is later.

As mentioned in the notice the proposal mysteriously (or as they say unfairly) doesn’t apply to any publicly traded companies or one that is owned or affiliated with a publicly traded company (franchisee).

Included in the notice are better potential options like the proposal put forth by Toni Atkins.

For more information, read the full bill or to send a letter opposing SB 939 CLICK HERE.

In addition to PPP, the SBA will now pay your new or existing SBA mortgage for six months!  Our office recently had a buyer who got the first 6 months of their mortgage covered by the SBA and the first 3 by their bank.  Additional debt relief is also available, if you need more information a good broker should be able to point you in the right direction, CLICK HERE FOR MORE INFORMATION.

A few key takeaways:

• A Force Majeure provision does not necessarily alleviate the tenant from having to pay rent.
• Some landlords are seeking to provide some kind of relief to tenants, especially to small and mid-size firms in the most affected segments.
•  While most tenants have received legislative relief, landlords largely have not.

Click to read more...