Being Prepared During the Covid-19 Pandemic
I think we can all agree that nothing helps increase our chances of being successful than being properly prepared. The current uncertainty with the COVID-19 pandemic, upcoming election, and recent stock market volatility are reasons to take a step back, look at your current situation and prepare a strategic plan to take advantage of the next phase of the commercial real estate market.
While we cannot predict the future, there are several things an owner can do to prepare. We recommend all our clients consider the following:
- Currently, do you want or need to sell?
- Determine and reevaluate your investment horizon. How long are you planning on holding the property 1,3 or 5+ years?
- Do your current holdings need repositioning?
- Is your debt coming due in the next 18 months?
Having an experienced professional look at your assets on an individual basis will help you understand your real estate and all the options available to you. The timeline for each property you own may be different, and the availability of a planned exit or recapitalization may not be market resilient. The status of tenancies, current legislation, and market perceptions will directly affect each assets value as well as the options available to you. Replacing vacancies, renewing existing leases, clearing violations, and fixing physical issues of a property are easy short term solutions that stabilize the value of your assets should you decide to sell or refinance.
Ensuring you have access to quick capital from reliable lenders that will help in the event of a needed sale or bridge loan is especially important. During the 2001 dot-com bubble and 2008 housing crisis, many clients called our team because they needed to sell or have access to hard money loans quickly. Short term solutions, and knowing the difference between your 30-day and 90-day exit strategies is beneficial in times of economic distress.
Your exit strategy is the most important part of the transaction cycle.