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As I sit here staring out the window of my home, from the epicenter of the city of Portland, Oregon, I cannot help but notice the indelible difference the COVID-19 virus has had on the city I call home. The streets are quiet, lacking foot traffic, and yet the light rail still runs multiple times a day and once full seats are now vacant, trains are empty but for a few passengers, I see during the morning and evening hours. but is currently empty. I observe members of my community and see people that I have never seen before in my neighborhood. I speculate these are my neighbors who save for the Shelter in Place, they would likely be at their places of employment or in other parts of the city. that there here now because they are required to stay home. This might as well be any major city in the lower 48. We are all susceptible to COVID-ovad 19. The foot traffic d During the day consists mostly of we have a few people going to the grocery stores, runners and those seeking physical exercise, and people walking their animals. dog walkers.
What could feel incredibly isolating has manifested into a more connected and conscious community amidst this pandemic. The park by my residence is cleaner and the spring grass has been able to rise up through the ground as it has less traffic to trample new seedlings. Residents still visit the park near my home for a bit of fresh air, to walk their dog, or to seek some sense of normalcy with a walk through the neighborhood. I have noticed more interaction than ever before as people make eye contact and say hello to one another. Technology seems to capture less attention on the city streets and it seems as though the humans have lifted their heads from their screens to seek engagement and community. Another notable change can be heard and seen every night in our neighborhood at 7:00 pm, this is the time when our neighbors put down their forks, their devices, and make their way to their patios to ring bells, play drums or other musical instruments, sing, and to cheer in The neighbor's Ring t bell at seven for support of health care workers. This feels like a call to come back home before nighttime falls and the city is once again vacant save for our houseless neighbors. arrives when you only see those poor individuals who do not have homes.
So what does this have to do with the subject name of this blog, “. Will Covad-19 Kkill Commercial Real Estate?”. The financial impact of this pandemic has turned a once rapid flowing economic river into a trickle of a stream as the lacking flow of income begins to creep into each household. I am watching the lack of impact of people which turns the wheels of our economy slow to a trickle where there used to be a massive river. Real-estate will never disappear, humans need homes and businesses, that brick and mortar place of refuge and industry; won't go away. We humans need it. how we use real estate, will change and is doing so at a rapid pace. With so many changes happening and with the deluge of articles circulating the interwebs, it may feel as though one is drinking out of a firehose to simply intake the knowledge. Here are my thoughts based on what I see and of the forces are causing these extraordinary changes is extraordinary.
To make this simple, on a very high-level view, follow the people to find the money. With stores closed there are no sales to be tracked, which means store owners are without the funds to pay for their rent, let alone their staff, there is no money for lease payments. The property owners who own the buildings will not have money from the lease payments to pay their mortgage(s). Banks or investors who own these mortgages who are owned and or purchased these loans for investment will not receive getting a return on their investment this month and frankly, or who really knows how long until they do receive a return, if even if they do. This process will cause a shutter in our credit markets, much like throwing a pebble into a pond, we have yet to see beyond the epicenter of ripples, and I foresee the impact will be far greater over the coming months. . Lenders will not lend money (loans) won't give loans to property owners until they understand their risk. It is probable that only the Federal and State governments will take those risks for some time. Debt will need to be renegotiated to lower levels because property owners will not have funds from their leases (rent)to support their loans, as tenants do not have lease payments for property owners. I have seen a ripple effect like this before and it is my experience telling me property values will certainly be lower a year from now then what they were Feb 15, 2020.
There is an upside to this crisis and it will benefit communities at large if those in our field stand up, see the challenge before them to do more for their community, and make their move to be part of a hunt for the good. Prepare leaders as this is the time to rise up, The Good news is it is Its time to prepare for the hunt. Gather the tools, put together your team, and practice your math. Lets Go Hunting! The opportunity to find, acquire, and to add significant value to our community by way of the real property and our community is going to be exponential. I have been in Real Estate for almost 30 years and I have seen what can happen when our industry makes a move to create community, to build infrastructure to support a thriving economic community, and this is the time. This is what fucking excites me! I am ready to expand, to grow and to serve our community boldly.
Are you ready for a change? I have got news for you, it's happening!
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