COVID-19 Update

This is How We Fight Back

Over the last few weeks, all of us have in some way been impacted by COVID-19. Many are looking to understand how this will affect the market and real estate community. CEM hears from six executives in the industry on what they are doing to fight back against this pandemic.

John Kinser

Senior Vice President | Director of Commercial Real Estate Enterprise Bank & Trust

During this challenging time, the bank’s first priority has been to keep our associates and our clients safe. Most of us have been able to telecommute, and we have put safety procedures in place at our branches to effectively distance all parties as they complete necessary in-person transactions.

Some of our commercial real estate clients have been facing special challenges related to COVID-19. Especially hard hit are our hospitality and retail clients. Enterprise has taken proactive steps to help our clients through these challenges, while continuing to review and approve loans for new investment and development opportunities. On top of all this, EB&T is one of the many banks tasked to approve and distribute SBA 7a Cares / PPP stimulus funds.

It has been a wild few weeks, but it has left me encouraged as I watch our teams rise to the challenge with extraordinary resourcefulness, dedication and care.

Larry Pobuda

Executive Vice President | General Manager, The Opus Group

As a developer, we have projects in different stages, ranging from under contract with a seller to fully stabilized and ready for sale. Each project requires a different approach. The first step for us is to ensure that we have enough time in which to analyze and act. COVID-19 hit the markets and economy very quickly, and it is our responsibility to fully communicate the current project status along with our recommendations to our partners – joint venture equity, lenders and city officials. We also must make sure we communicate fully with sellers if we are in the early stage of development. I’m most proud of our company’s first reaction: reaching out through the Opus Foundation to the non-profits in the communities in which we develop to contribute to those most in need during this health crisis. Our foundation awarded over $100,000 to various nonprofits to ensure that emergency community needs were being met.

Will Strong

Executive Managing Director | Industrial Capital Markets Cushman & Wakefield

Although there is much uncertainty as the market conditions evolve, our team is gathering real-time transactional data and reaching out to clients to share that insight. It seems like when we are post COVID-19, and the logistics story gets better (last mile even more critical), there will be on-shoring of many industries and sectors (pharma and automotive), and on-shoring of investments.

We are in a risk-off environment where investors stay even more in their lane and lots of questions have been geared toward the debt markets. And we are also trying to create more constructive engagement with buyers on our deals.

Our team’s primary business focus has first and foremost been to take care of our existing assignments and customers and have as many conversations and share as much real-time recon as possible. The market continues to be volatile, and it is too early to draw many definitive conclusions.

Prepare, don’t panic. This has been our motto since the pandemic began. Sharp Construction started seeing the effects of the pandemic nearly immediately as projects that were in design slowly became stalled and new opportunities lagged. We have been actively engaging with our teams, business partners, financial partners and customers to minimize impacts in our business and theirs.

Tiffany Sharp

Principal, Sharp Construction

COVID-19 has presented its set of challenges for us in the field as well. In the absence of government protocols for the safety of essential businesses, we’ve started to implement our own. Our teams are maintaining a distance of six feet in the field, wearing proper personal protective equipment with the addition of bandanas for masks, and actively cleaning surfaces and workspaces. Our intent is to be mindful and focus on prevention.

We’ve implemented a successful work-from-home platform for our office team so that we can continue to drive strategic and tactical obligations. We’re using this down time to focus on continuous improvement so that we can come back stronger than ever when all is said and done.

Adam Finkel

CCIM | Principal, Tower Capital

The coronavirus pandemic’s impact on our economy changes day to day, so my advice to clients is to pause and evaluate how upcoming federal regulations will affect commercial real estate. We are seeing many lenders becoming more conservative in the current environment – offering lower leverage, requiring debt service (and in some cases taxes and insurance) reserves, and pricing loans higher due to the increased risk. Staying informed and connected to my colleagues and capital partners has been absolutely essential. My inbox is full of white papers and insights from industry friends and many great minds in the real estate, finance and economics sectors. I especially enjoy thought leaders like John Mauldin, Ray Dalio and Howard Marks.

Our firm is actively practicing social distancing by switching to a work-from-home model. To maintain face-to-face interaction and unity as a team, our firm now has two companywide video meetings per week. Likewise, I’ve opted for FaceTime calls over typical phone conversations.

Mark Bauer

Managing Director | Data Center Solutions (DCS) group, JLL

The COVID-19 pandemic has affected all sectors of our business, and the importance of sustaining operations of our mission-critical facilities and supporting our clients is vitally important now. While emergency preparedness is the backbone of data center operations, this pandemic has brought to the forefront unprecedented challenges for us all. Our national JLL group has created a COVID-19 Considerations document to give clients general information about actions that have been undertaken to aid in their planning to best address the mission-critical operations they operate for our clients. Some of the considerations include: limiting data center access to essential staff only, considering a “two-weeks-on, two-weeks-off” work schedule, postponing any nonessential maintenance and construction, and training and re-training data center staff on all specific procedures that are in place due to COVID-19 support. Our industry hasn’t slowed down, so having an action plan is imperative for our clients.