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The COVID-19 global pandemic continues to cause mass commercial real estate vacancies throughout the US. Many buildings were ordered closed with limited notice and without proper decommissioning of building systems. These abrupt closures have created a great deal of uncertainty for property owners, including the physical and environmental conditions of their assets.
Who bears responsibility when government officials shut down a business or premises due to COVID-19? Do the insureds maintain the same duties during the crisis or are they absolved from their responsibilities? With the risk of properties becoming impaired or diminished during the vacancy period, building owners must protect the value of their assets, protect themselves from liability, and understand the protections and limitations of their insurance policies.
Obligations of Commercial Real Estate Owners and Operators
Owners of commercial real estate must first comply with federal, state and local directives as
CFOs are already thinking beyond the end of the coronavirus and have plans to shift at least some of their onsite workforce to remote positions, according to a survey of CFOs and finance leaders by Gartner taken on March 30, 2020.
The survey found that 74% intend to move at least 5% of their previously on-site workforce to permanently remote positions post-COVID 19. Nearly a quarter of respondents said they will move at least 20% of their on-site employees to permanent remote positions.
Also, 13% of respondents noted they had already made cost reductions in real estate expenses, with another 9% planning to take actions in this area in the coming months. “This data is an example of the lasting impact the current coronavirus crisis will have on the way companies do business,” said Alexander Bant, practice vice president, research for the Gartner Finance Practice in prepared
WESTLAKE VILLAGE, CA—Senior housing and healthcare REIT LTC Properties has finalized its sale of its Preferred Care portfolio. The deal has closed ahead of schedule, the company reports.
Combined net proceeds for the 22-asset portfolio was $77.9 million, with an estimated gain of $44 million. The portfolio had a combined net book value of $35.6 million.
One of the properties sold in 2019 while the remaining 21 properties sold in the first quarter of 2020. These included more than 2,500 beds across Arizona, Colorado, Iowa, Kansas and Texas, and they were sold through multiple transactions.
Preferred Care, a nursing home group based in Florida, filed for Chapter 11 in 2017. Wendy Simpson, LTC’s CEO and president, says that the proceeds from the sale will allow the company to pursue opportunities for future growth, “even in the midst of a particularly challenging environment.”
During the financial crisis, Richard Lawson was head of the Consumer Protection Division of the Florida Attorney General’s Office. In that turbulent time, he oversaw the state’s review of people’s petitions to modify their mortgages.
“That was a huge, huge issue during that whole crisis,” says Lawson, now a shareholder with Tampa-based law firm Gardner Brewer Martinez-Monfort. “The remedies that we obtained from the banks were geared towards fixing that experience [modifying mortgages] for the consumers.”
In the current COVID-19 crisis, regulators will be watching a variety of things, including banks’ stress levels, rents, and even prices for retail goods, if a state of emergency is declared in a particular location.
Rental housing owners could have difficult decisions concerning how they handle late or unpaid rent.
“Much of that [decision about how they deal with residents] will depend on what kind of relief the creditors will be
Usually at this time of the year, the start of renter season, multifamily landlords are raising their rents. This March, for obvious reasons, has been atypical however, according to RentCafe.
It reports that the national average rent was $1,474 in March, having gone up by 2.9%, or $42, which is a hard drop compared to February’s 3.2% yearly rise.
“The slowdown is visible in 60% of the cities we analyzed,” it wrote. “This is the first time since 2016 that we see a deceleration from February to March (when the rental season is supposed to kick off), as the new coronavirus pandemic is beginning to take its toll on the economy and the apartment market.”
This snapshot provides only a partial picture of the market though as the data has yet to reflect the full impact of COVID-19, according to Doug Ressler, manager of Business Intelligence at