Recap of William & Mary Alumni Panel Discussion Regarding CRE and COVID-19
On September 20, five William & Mary Alumni conducted a panel discussion led by Earl Wise III on the impacts of COVID-19 on the Commercial Real Estate Industry. Below is a recap of the event and embedded in the post is a webinar recording.
Please contact us with your feedback on the panel and any questions you may have regarding the topics covered.
Learn more about Earl here.
Connect with Earl on LinkedIn here.
Sheila Novak – Pulte Home – Residential Developments
Graham Savage – Cushman and Wakefield – Industrial properties
Joseph Jackson – Roth Jackson – Partner – Commercial Leasing
Jordan Lex – Jones Lang LaSalle – Capital Markets – Retail properties
Jim Molloy – Jones Lang LaSalle – Senior Director – Office properties
Questions for the Panel:
- Have you been working remotely? (Entire Panel)
- Are you back full time in the office? (Entire Panel)
- What are your company or firm’s policies with regards to working remotely? (Entire Panel)
- How has your company or firm been affected by COVID? (Entire Panel)
- Is your company or firm currently restricting travel? (Entire Panel)
Per the panel, there have been restrictions on travel and only about 25% occupancy in their physical offices. Remote work is accepted at every office. The panel believes that remote or tele-work is here to stay ion some form or another and it will coexist with the traditional work environment.
- What effects of COVID have you seen in the housing industry regarding supply, demand and cost and how have you addressed these effects?
Costs are rising as residential housing is currently hot. Purchasing land for development is also getting more expensive although there are still pre-COVID projects in the pipeline.
- Is anyone seeing landlords working to restructure big box retail leases or are they playing hard ball with their tenants?
Some landlords in office still provide concessions despite the current problems with office properties. Retail is terrible, but industrial and multifamily are still going strong.
- How does Force Majeure come into play with regards to commercial leases during the pandemic?
Most court cases have ruled against tenants trying to get out of leases due to COVID being an “Act of God” or unforeseen circumstance that precludes the payment of rent. However, the clauses have come into vogue and are being reworked to expressly include governmental shutdowns and/or pandemics.
- Are landlords exercising forbearance with their tenants?
Yes, but it is not a sure thing. Tenants can find themselves saved temporarily by the eviction moratorium.
- What about lenders and forbearance in commercial loans?
NOT ADDRESSED BY THE PANEL.
- What is the current state of commercial real estate in the DC/Baltimore corridor?
CRE in the DC area is somewhat insulated from COVID by federal and military/defense uses. Retail, especially restaurant and hospitality, are hurting. Again, industrial and multifamily remain active, but the future is uncertain.
- Has there been a real move from the urban to suburban areas?
Office is moving to the suburbs as is residential/multifamily. This situation is the opposite of the recent gentrification along commercial services in urban areas.
- What is the impact that COVID has had on Amazon’s business, and the industrial supply chain as a whole.
Amazon has taken on a strong presence in the commercial real estate industry. Storage, data centers and “last-mile” supply centers have emerged as a leader in keeping some markets afloat.
14. What are the most pressing current lender, owner and buyer issues in:
- (JORDAN/JIM) – fairly strong activity in multifamily, but it is dependent on employment and federal assistance in many cases.
- (JORDAN/JIM) – PANEL DID NOT DISCUSS
- (JORDAN/JIM) – Retail is in terrible shape, even in the DC market.
- Mixed Use. (JORDAN/JIM) – PANEL DID NOT DISCUSS
- (GRAHAM) – not in good shape and it may be the beginning of a real slowdown in this market, due to changes in office structure and remote work.
- (GRAHAM) – strong sales in the commercial market, despite COVID
- Vacant Land for development (SHEILA) – increasing costs and scarcity
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