The rapid onset and continued presence of coronavirus have — to put it bluntly — cast a pall over the world’s economy and communities. Its unpredictable nature has temporarily frozen the commercial real estate market in its tracks, while most parties sit back to observe how CRE might emerge from quarantine.
However, amid the uncertainty of COVID-19, there are bright spots. In this article, we highlight four stories of investors and landlords nationwide going above and beyond to help those in need.
A Georgia landlord guides retail tenants through reopening
Featured first in NPR, Robert Fransen of Coro Realty is a property owner with multiple retail shops, including those in shopping centers, grocery stores, and small mom-and-pop businesses. Although Atlanta was one of the first states to reopen its economy in May, several of Fransen’s tenants struggled to get their business back on track.
Coro Realty and Fransen opted to help these businesses with day-to-day management, including addressing questions about adjusting their business models to address COVID-19 guidelines. Revising menus to adapt to takeout longevity, signing up for Uber Eats or other food delivery services, and expanding outdoor seating represent a few ways Coro Realty is supporting its tenants. Per Fransen’s interview with NPR, “We’re not pressuring businesses to reopen or quite frankly pay their bills in full because we recognize that people just weren’t going shopping. [We’re] helping them think through those sorts of things.”
By collaborating with his Atlanta retail tenants and easing financial demands on them, Fransen believes landlords can help entrepreneurs buy time to reinvent their business in a post-COVID reality.
Griffith Park community bands together to purchase abandoned land for national park
In 2019, a combined 1.35 acres of two empty lots adjacent to Griffith Park were listed on the Los Angeles CRE market. The parcel sat just south of Bronson Canyon and was famous for its use in many films, including serving as the Batcave in the 1960s Batman series and as scenery in Hail Cesar and Twin Peaks. A developer was close to closing the deal for $850,000 to buy the properties at the beginning of 2020. However, coronavirus struck, and the transaction disintegrated in escrow.
The local community decided to intervene. According to the LA Times, the Los Angeles-based Friends of Griffith Park teamed up with resident Jason Greenwald and his wife Corey Nickerson to secure the land for the State Park. They hammered out a contract in late April, but with a catch: the group had to raise funds to meet a reduced price of $500,000 in a fast 21-day due diligence period due May 8th.
More than 100 donations poured into the fund, according to broker representatives from Douglas Elliman, successfully raising the half a million dollars and securing the land for Griffith Park. The purchase ensures that the area will remain undeveloped and offers a better, bigger Griffith Park for Los Angeles residents to return to after the pandemic.
Mall landlord giant invests $5 billion to help coronavirus-impacted retailers
Mall owner Brookfield Asset Management Inc. has announced plans to commit over $5 billion to assist retailers impacted by COVID-19. The commitment represents a belief in the heavy-hit sector, providing retailers capital to keep the rent paid and time to adjust their business models. This model aligns with Brookfield’s investing tradition of going against the grain: the firm has previously placed bets on brick-and-mortar retailers in the wake of rising e-commerce trends.
First reported in the Wall Street Journal, Ron Bloom, Vice Chairman of Brookfield’s private equity group, will oversee the distribution and operations of the fund. Bloom previously led the Obama administration’s automotive task force during the Great Recession.
The fund will be used to take minority stakes in retail tenants who had a pre-coronavirus revenue upward of $250 million, whose sales have suffered due to forced store closures and lack of consumer spending. Brookfield hopes to provide expertise and support to suffering retailers who it believes will rebound in a post-COVID environment, including retailers who have already filed for bankruptcy.
This stopgap could be the boost retailers need to adapt in the wake of coronavirus, saving thousands of jobs and keeping rent payments moving as the economy adjusts to the pandemic.
NYC landlord waives rent for tenants amid coronavirus pandemic
In the early days of the coronavirus, families nationwide worried about how they were going to make ends meet, especially with thousands of jobs lost due to forced closures and stay-at-home orders. One New York landlord decided to ease their concerns.
First reported by local news site Greenpointers.com and later featured in the New York Times, Mario Salerno waived rent for his 18 multifamily and commercial buildings in NYC. After receiving messages from a few individuals claiming they could not afford the upcoming bill, Salerno wanted to soothe their stress about payments during COVID-19.
Per Greenpointers.com, Salerno said, “I’m really not concerned about the rent right now, I’m concerned about peoples’ health. I told them to look out for your neighbor and make sure that everyone has food on their table.”
The act of waiving rent for tenants was one of radical kindness in the early days of COVID-19. Many tenants were scrambling to figure out how to pay the first rent bill during the pandemic. At the same time, landlords were similarly uncertain whether they could make loan payments in these unprecedented times.
When businesses, landlords, and lenders can collaborate, such partnerships lead the way towards a more robust, colorful future for commercial real estate. As we collectively wade through the uncertainty of COVID-19, such acts of kindness not only provide support to those in need, but inspire collective belief in the strength of the CRE industry.