03-25-20 – Using Pandemics in Real Estate Negotiations?

Recessions always follow periods of high growth just like periods of high growth follow recessions. Like waves at the shore, these things are inevitable. People that like to impress people with the brilliant predictions always find a large enough audience looking for an article to support their agenda.

Buy now before prices skyrocket (great word … “skyrocket”)!

Better sell now, our analysts say, we are headed into a recession … ooooh!

Sell, buy, sell, buy ….

Back during some of our worst overbuilt real estate markets, I was amused at the “market is going to get better” pronouncements of one major national commercial real estate house. Of course, they are going to get better! There was nowhere else to go!

What about using the current circumstances to your advantage in your real estate negotiations? With what fiendish delight do we wring our hands over the carnage of these recent events?

Does this hurt our economy? No doubt? Is it a recession? No. Not in its truest sense.

Much like in the 1959 movie classic, On the Beach, as newspaper blew across the abandoned streets of New York as all of the northern hemisphere was destroyed by nuclear war, our streets seem equally abandoned. But, unlike in that story, the human race has not been wiped out, and we will come back, and come back strong in my opinion.

Certain business activities have gone underground, but not in a shady sense, but rather in a bomb shelter mentality. As in war, life goes on, business continues. It is just not the same.

It risks coming back so strongly that once again writers will be predicting our next recession!

But it will be a new world.

The office world has just gone through its biggest shakeup in history. Many people who said that their businesses could not operate out of their homes have found that not to be the case. People who have played around and had technology that has largely gone unused are now having to use it and, after getting it to work properly, which in some cases had never been a necessity, have found it to be quite clever and useful and are now being forced to rethink their former convictions.

Many traditional businesses may find their ability to hold on to their employees a bit more challenging as some of these may be surprised that they can in fact work from home, like it, and for that reason may explore other ways to ply their trade. The businesses will be forced to adapt. Find new ways to perpetuate their appeal as they compete in this new job market.

The coworking phenomenon that many viewed as a grown up version of the college cafeteria, with all of it excellent “social interaction” has met with the same challenges as the colleges as seasonal bugs send half of the students home to their parents, “young adults” without adult supervision. Is this their Achilles heel?

And yet, Amazon, Walmart and others, have used this occasion to only further introduce the populace to the advantages of at home deliveries, expanding the options, as at the grocery store, placing the candy in the checkout line, making this irresistible to buy for the few pennies more, no one is watching! Will this not only increase the demand for this type of servicer?

This has certainly not helped retail. Of course, many of the stores were nothing more than costly marketing facades for their ever-expanding online marketing trades. But, many of these have now taken this to a new level, at home deliveries becoming necessary and routine.

Unemployed by a single retailer, professional shoppers are out buying our groceries and delivering them to our home.

The recent, “last mile” investment strategies of many of the funds have made them to appear as geniuses, at least ultimately.

Restaurants have now been forced to explore new ways to address their markets. Many were already involved in at home delivery. Many more are now doing it.

Uber drivers have found many ways in which to employ their services.

How does this effect you as the tenant?

Some landlords will be anxious to do anything to get the deal done. Better safe than sorry.

Others can afford to wait and will.

It will be weeks, possibly months, before we get any sense of where events are leading.

As with everything in the brave new world, proceed with extreme caution, don’t assume anything.

Leave a Reply

Your email address will not be published. Required fields are marked *