There are many challenges to closing a deal in today's market, from underwriting to completing due diligence virtually, with social distancing restrictions. Many investors have halted all acquisitions, but for those still trying to transact, it can be a very tough road. How some investors are approaching their business is to do less renovations since they are getting less rent. What has gone away for now for some investors is buying a property and putting lots of money into it to achieve certain rents. Today's market is dictating to not over improve the property beyond market demand. You want to keep rents workforce affordable.
According to Gene Reilly, Chief Investment Officer of Prologis, a global real estate company whose portfolio spans approximately 1B square feet of space around the world “ we have stopped all spec development for now”. “ we are trying to figure out where the rents and occupying will be a year from now”.
According to Mark Weinstein, founder and President at MJW Investments “ this is not going to go on forever, but it's going to go on for a while”. “ Owners planning to sell assets this year have pushed back plans as part of a strategic shift to respond to the pandemic.
According to Bill Shopoff, President and CEO of Shopoff Realty Investments”many of our properties that we had planned to sell this year will now have their disposition timelines pushed back a quarter or two depending on the market's future recovery”. “ In addition, properties we are considering for acquisition will now have to be further evaluated as determining valuations is nearly impossible in the current market”.
Many landlords are closely evaluating their income producing properties and working with tenants to determine if rents may be late/unpaid and how that will impact the property as a whole.
A long term strategy that some investors have used in building their real estate portfolios is to include a variety of property types and markets in an effort to potentially lessen the overall portfolio risk. The thinking is that any possible burdens of one property during this time many be carried by the successes of others.
The good news: the economy was already at it's peak prior to the crisis and for that reason, many investors were preparing for some sort of economic event, having experience in dealing with challenges, although nothing approaching a global pandemic.
At Accord Real Estate Group, according to Jeff Grandis, broker and Co-owner, over the last month since being faced with this pandemic we have had to reassure our clients that transacting new deals and closing transactions in contract, is challenging but we are committed to moving forward safely and confidently one step at a time.
Despite that our office is temporary closed due to COVID-19 please feel free to call us at 718-375-2065 or email at info@accreg.com. We are here to advise and to help you in every way we possibly can during this crisis.
If you are interested in selling your property or you know someone who is planning to sell their Brooklyn or New York property, whether a single family residential property, an apartment building, a commercial property, mixed use, multi family, coop or condo, vacant land or a development opportunity, call us. You will be very happy that you did.
We always bring our clients the top market price for their property and provide exceptional personalized service from initial consultation to closing.
Thank you,
Accord Real Estate Group
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