“As slow as March went, April sure flew by!”
This was a quote from a family member as we sat around the dinner table for the 50th consecutive day. That comment could not have held more truth. As we spent the last two weeks of March figuring out what in the world was going on and re-acclimated ourselves to a full household (this time full of consenting adults and not teenage children dealing with the pressures of adolescence, middle school and high school), April was filled with the “new routine”. April found three of us working our jobs remotely and the 4th finishing up second semester of his sophomore year of college.
Phone calls, Zoom meetings, scheduled property tax appeal hearings (conducted via telephone, of course), class lectures and finals, staying out of each other’s way; the days rolled along and here we are – Mid May. More than sixty days of being together and the work continues to be completed. Touches with clients, valuation discussions, connecting with my accountants regarding the tax deadline extension and working with my bank to review the PPP application process/ funding and all the other regular joys of running a business! No wonder the days are moving so quickly.
With this activity, I am deeply aware of the effect the COVID-19 is having on many, if not all of my clients. Hoteliers, retailers, convenience store operators, owners of apartments and other commercial real estate properties – everyone has been touched negatively by this pandemic. These holdings will not just “bounce back” as quickly as things have fallen. I’ve listened to several economists representing most areas of the country and the market will return at a much slower pace. Some have projected a timeline of 3-4 years before GDP attains the percentage increase levels we were seeing at the start of 2020. While this may be one of the more conservative estimates, it certainly is a possibility the recovery period will take us well in 2021 and 2022.
The Real Estate Market
One question we don’t have an answer for at this point is what the real estate market will look like going forward. Will office space (and the need for office space) change in look, feel and desirability? Over recent years, we’ve seen the exponential increase in online sales as consumers order more goods from the Internet and have them delivered directly to their residence. With stay at home orders in place, more people have turned to this mode of shopping, not only out of convenience but necessity.
Have shopping habits shifted? Have work habits shifted? These are the areas we will be paying particular attention to and we will see if the real estate market reflects these changes over time. Construction of warehousing, cold storage and distribution centers will continue to increase, but how will the retail sector and office buildings adapt? More importantly, how will the counties recognize the changing landscape in the marketplace and what will their reaction be?
Big questions and no answers at this point… but I promise you, it’s on our (and our client’s) radars.
States are showing signs of re-opening in various capacities and a general sense of anticipation is clearly in the air. I’m looking forward to dining out again and being with others. After all, in my almost 30 years of marriage, I’ve never had 60 consecutive dinners at home with my family. 😊 They are probably ready for a break from me!
Stay strong and stay healthy.