Landlord Perspectives COVID-19 Steve Sombrero President Client - - PowerPoint PPT Presentation

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Client Name | Cushman & Wakefield

Steve Sombrero President

Landlord Perspectives COVID-19

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Client Name | Cushman & Wakefield

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Client Name | Cushman & Wakefield

IMPACT of COVID-19

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Client Name | Cushman & Wakefield

CRE- Early Assessments

• CRE enter

tered crisis sis in in bette tter shape pe than an past t down wnturns, turns, but not t immune une to COV OVID ID-19 19 impac act

• Investors in “wait and see” mode. Some estimate

sales es will l be down wn 30% to 40% in 2020 20

• Pricing

cing like kely y to softe ften.

• n. Core

re mark rkets ets to be relatively latively resilient silient

• Constr

struct uction ion deals als hard rd to execute.

• cute. Pipeline

eline will l slow w

• Oc

Occupier upiers (Tenants) also in “wait and see” mode. Tour uring ing space ce has stoppe pped d or way y down n

• UPSIDE:

IDE: CRE sector tor will l come me out the e other er end with th si significant nificant tailwinds ilwinds and huge ge oppor

• rtunities

tunities

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Client Name | Cushman & Wakefield

HARDEST HIT

• HOT

OTELS: LS: Oc Occupancy: cupancy: 7% ADR: R: $140 40

• RETAIL:

AIL: Shut ut down wn except cept Pharma rma & Gr Groc

• ceries

eries

• RESTAURA

TAURANTS: NTS: Shut t down wn except cept drive ve-thr throughs ughs & curb rb-side side pickups kups

• OF

OFFI FICE: CE: On Only ly essent entia ial business inesses es open

• MULTI

TI-FA FAMI MILY: Y: Unemployment mployment = tenan nant t defa faults ults

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Client Name | Cushman & Wakefield

LEAST IMPACTED

• INDU

DUSTRI STRIAL: AL: More re resilien ilient.

• t. Supply

ply chain ain disru rupt ption ions s but even en stron

• nger

ger shift ft to e-commer commerce ce

• STOR

ORAGE AGE: Mor

• re

e resilien ilient, t, but not t immune une.

• DATA

TA CENTERS ERS: : Stay y at home me econ

• nom
• my,

y, more re data ta.

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Client Name | Cushman & Wakefield

Lease Provisions to Explore Amid COVID-19

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Client Name | Cushman & Wakefield

What Does Your Lease Say

• Forc

rce e Majeure jeure or Impossibility

• ssibility of Perf

rformance

• rmance
• Interruption

terruption of Services vices

• Business

siness Interruption terruption Insuran surance ce

• Op

Operating rating Expen enses ses

• Abando

andonmen nment t / Continu ntinuous

• us Use
• Securi

urity ty Deposit

• sit
• Holdover

dover

• Default

fault

• Termina

rmination/ tion/ Contr ntraction action Op Options ions

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Client Name | Cushman & Wakefield

Landlord Considerations For Rent Relief During COVID-19

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Client Name | Cushman & Wakefield

Request & Collect Tenant Information

• Specific

cific writt itten en request quest for Landlor ndlord Actio tion

• Seek

ek explanat lanation ion of

• f governmenta

ernmental l assistance istance being ing sought ght or alre ready ady grant anted ed (CARE ARES S Act- PPP) PPP)

• Evidence

ence of business ness continu ntinuity ity insur urance ance and define fined d coverage erage amoun

• unts

ts

• Descripti

scription

• n of
• f tenant

nant ownership nership st struc ucture ture including luding

• rganization

ganizational chart art

• Last 3 years

rs of audited dited finan nancial cial statements tements and tax returns turns, , curr rrent nt finan ancial cial st statemen tement t and balance lance sheet. et.

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Client Name | Cushman & Wakefield

Be Prepared with Information in Hand

• Lease

ase Abstra tract

• Curr

rrent nt rent nt price ce and and any past t due e amount unt

• Se

Secur urity ity deposi

• sit amount,

unt, lette ter of

• f credit

edit and and amoun

• unts,

ts, persona rsonal l and corpo rporate ate guar arante ntees es

• Existing

ting option ions such ch as as renewa newal, l, expansion ansion and and termination rmination rights ghts

• Conf

nfidentiality identiality agreement to understand tenants’ finan nancial cial statements tements and any workout rkout terms rms

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Client Name | Cushman & Wakefield

Think Ahead: Tenant Rent Relief Ideas

• Partia

rtial l or full l rent nt abate atemen ment t for r a limited ited time e (e.g. .g. 30 30-90 90 days, s, waived ived base e rent nt but cover ver oper erati ating ng expenses) enses)

• Defe

fer r rent nt for r the e next t 30-90 0 days with th rent nt to be amor

• rtized

tized in futur ture e periods riods (e.g. .g. calendar lendar year r 2021) 21)

• Abate

atement ment in in return turn for r lease se exten tension, sion, modifica ification tion or elimina ination tion of certain rtain lease se clauses auses (e.g. .g. termina rmination, ion, renewal newal option ions, s, etc. c.)

• Applyi

lying ng a security urity deposit posit or

• r lette

tter of

• f credit

edit to be replenis plenished hed at a later er agreed reed upon n date te

• Tenan

nant to to waive ive certa rtain in lega gal rights ghts if if futu ture re defa faults ults

• ccur

cur

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Client Name | Cushman & Wakefield

Steve Sombrero

President

ALOHA