Landlord Perspectives COVID-19 Steve Sombrero President Client - PowerPoint PPT Presentation

Landlord Perspectives COVID-19 Steve Sombrero President Client Name | Cushman & Wakefield 1

Client Name | Cushman & Wakefield 2

IMPACT of COVID-19 Client Name | Cushman & Wakefield 6

CRE- Early Assessments CRE enter tered crisis sis in in bette tter shape pe than an past t • down wnturns, turns, but not t immune une to COV OVID ID-19 19 impac act Investors in “wait and see” mode. Some estimate • sales es will l be down wn 30% to 40% in 2020 20 Pricing cing like kely y to softe ften. n. Core re mark rkets ets to be relatively latively • resilient silient Constr struct uction ion deals als hard rd to execute. cute. Pipeline eline will l • slow w Oc Occupier upiers (Tenants) also in “wait and see” mode. • Tour uring ing space ce has stoppe pped d or way y down n UPSIDE: IDE: CRE sector tor will l come me out the e other er end with th • significant si nificant tailwinds ilwinds and huge ge oppor ortunities tunities Client Name | Cushman & Wakefield 7

HARDEST HIT HOT OTELS: LS: Occupancy: Oc cupancy: 7% ADR: R: $140 40 • RETAIL: AIL: Shut ut down wn except cept Pharma rma & • Gr Groc oceries eries RESTAURA TAURANTS: NTS: Shut t down wn except cept drive ve-thr throughs ughs • & curb rb-side side pickups kups OF OFFI FICE: CE: Only On ly essent entia ial business inesses es open • MULTI TI-FA FAMI MILY: Y: Unemployment mployment = tenan nant t defa faults ults • Client Name | Cushman & Wakefield 8

LEAST IMPACTED INDU DUSTRI STRIAL: AL: More re resilien ilient. t. Supply ply chain ain • disru rupt ption ions s but even en stron onger ger shift ft to e-commer commerce ce STOR ORAGE AGE: Mor ore e resilien ilient, t, but not t immune une. • DATA TA CENTERS ERS: : Stay y at home me econ onom omy, y, more re data ta. • Client Name | Cushman & Wakefield 9

Lease Provisions to Explore Amid COVID-19 Client Name | Cushman & Wakefield 10

What Does Your Lease Say Forc rce e Majeure jeure or Impossibility ossibility of Perf rformance ormance • Interruption terruption of Services vices • Business siness Interruption terruption Insuran surance ce • Op Operating rating Expen enses ses • Abando andonmen nment t / Continu ntinuous ous Use • Securi urity ty Deposit osit • Holdover dover • Default fault • Termina rmination/ tion/ Contr ntraction action Op Options ions • Client Name | Cushman & Wakefield 11

Landlord Considerations For Rent Relief During COVID-19 Client Name | Cushman & Wakefield 12

Request & Collect Tenant Information Specific cific writt itten en request quest for Landlor ndlord Actio tion • Seek ek explanat lanation ion of of governmenta ernmental l assistance istance being ing • sought ght or alre ready ady grant anted ed (CARE ARES S Act- PPP) PPP) Evidence ence of business ness continu ntinuity ity insur urance ance and • define fined d coverage erage amoun ounts ts Descripti scription on of of tenant nant ownership nership st struc ucture ture including luding • organization ganizational chart art Last 3 years rs of audited dited finan nancial cial statements tements and tax • returns turns, , curr rrent nt finan ancial cial st statemen tement t and balance lance sheet. et. Client Name | Cushman & Wakefield 13

Be Prepared with Information in Hand Lease ase Abstra tract • Curr rrent nt rent nt price ce and and any past t due e amount unt • Se Secur urity ity deposi osit amount, unt, lette ter of of credit edit and and • amoun ounts, ts, persona rsonal l and corpo rporate ate guar arante ntees es Existing ting option ions such ch as as renewa newal, l, expansion ansion and and • termination rmination rights ghts Conf nfidentiality identiality agreement to understand tenants’ • finan nancial cial statements tements and any workout rkout terms rms Client Name | Cushman & Wakefield 14

Think Ahead: Tenant Rent Relief Ideas Partia rtial l or full l rent nt abate atemen ment t for r a limited ited time e (e.g. .g. • 30 30-90 90 days, s, waived ived base e rent nt but cover ver oper erati ating ng expenses) enses) Defe fer r rent nt for r the e next t 30-90 0 days with th rent nt to be • amor ortized tized in futur ture e periods riods (e.g. .g. calendar lendar year r 2021) 21) Abate atement ment in in return turn for r lease se exten tension, sion, • modifica ification tion or elimina ination tion of certain rtain lease se clauses auses (e.g. .g. termina rmination, ion, renewal newal option ions, s, etc. c.) Applyi lying ng a security urity deposit posit or or lette tter of of credit edit to be • replenis plenished hed at a later er agreed reed upon n date te Tenan nant to to waive ive certa rtain in lega gal rights ghts if if futu ture re defa faults ults • occur cur Client Name | Cushman & Wakefield 15

Steve Sombrero ALOHA President Client Name | Cushman & Wakefield 16