Ownership "Shelter in Place" Strategies
Covid 19 / Corona Virus Michigan Commercial Real Estate Response
While the overall impact of the Covid-19 / CoronaVirus pandemic is currently unknown, the costs to the commercial real estate industry will likely be in the billions of dollars. Some of our tenants will not survive the disruption. However, there are steps we can take which will help us weather the storm and be in the position to take advantage of the boom once the economy returns to normal.
During this time, it may be prudent to reduce planned CapEx, in preparation for disruption of property cash flows. In any downturn, cash for continued operations in key. Reductions to planned CapEx which are less impactful visually to tenants are generally the best place to start. Keeping up the good looks of your property will be necessary to keep your tenants in place.
Speaking with lenders now, securing working capital lines of credit, even if it is through unsecured lines such as credit credits, may give you the flexibility to maintain your property, make payroll, make unexpected repairs and finally build out space for new tenants as we rebound.
In the past weeks the entire landscape has changed. It is likely that many development projects will be put on hold due to the market developments and the once high demand construction industry could have a small window of opportunity. If you have the cash on hand to deploy for work now, this could be a great opportunity to start a project or renegotiate the cost of a previously committed projects as construction schedules open up.
Your unique situation may present other opportunities to protect your assets. Our team is ready to discuss your situation and assit in crafting a plan for your specific needs.
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