California shutting down again

Video Index (with direct links)
0:00 Win an awesome Supercuts hat! (Don’t worry, not the one I’m wearing)
0:41 Gov. Newsom threatens to shut down the state again
1:51 Yelp will help you find a restaurant that is following proper protocols
2:01 Don’t forget to apply for your EIDL free money grant!
2:27 Senate Bill 939 is dead. Hooray!
3:11 Inland Empire housing market is HOT!
3:56 Amazon warehouse burns down
4:22 Stats on Inland Empire leasing volume and vacancy rates, and future forecasts

Hello Investors!

If you want a cool Supercuts hat like the one I’m wearing, reply to this email and tell me you like my hat, and I’ll enter you into a drawing to give away my extra hat. It could be a collector’s item in the future!

Will California shut down again? That’s what Gov. Newsom is threatening to do, if we don’t wear masks and keep our social distance. Coronavirus cases in the state are on the rise, the percentage of positive tests is going up, and the rate of hospitalizations is increasing.

If you haven’t yet applied to get at least $1000 from the Small Business Association through its Economic Injury Disaster Loan program, you should do it now! There is a portion of the loan that is an advance that does not have to be paid back. So it’s free money to you, even if you choose not to take the loan. The application should take you no more than 15 minutes.

Last week, California Senate Bill 939 fell apart in the Senate Appropriations Committee and will not be moving forward. This is a big win and a relief for commercial property owners throughout the state! The original form of the bill would have made evictions illegal for up to 12 months after the emergency order is lifted, as well as giving some tenants the right to walk away from a lease with no more than a 3 month penalty. Thanks to opposition from the public and property owners like you, the bill will not be proceeding and we can give a big sigh of relief.

Great news in the Inland Empire residential real estate market. Real Estate data source DQ News reported that for the year to date, new home sales are up 13% versus 2019, while they are down 16% for LA and Orange Counties.

When looking at existing home sales, volume in the IE is down 10% versus last year, as compared to negative 15% for LA and OC.

This is great news for the Inland Empire, whose population has grown by 5 times the number of people as LA and OC over the past 5 years. The IE economy has continued to remain strong, due largely to the IE being the hottest market in the country for warehouses and distribution. Amazon is the largest private employer in the IE and has 14 warehouses in the Inland Empire. Well, 13, after one burned down in Redlands earlier this month. Job losses in the IE have been the lowest in Southern California, and 97% of residential rents have been collected during the pandemic, which is the fourth highest among national markets tracked.

So, the Inland Empire has weathered the coronavirus storm better than most markets and we hope for continued growth.

Retail Leasing activity in the first two quarters of 2020 has been the lowest it has been in 10 years. In addition, the fourth quarter of 2019 was the third lowest quarter of leasing volume in the past 10 years, so perhaps there was a slowdown coming anyway that was just accelerated and magnified by the coronavirus.

What’s going to happen in the future for retail leasing? Costar predicts that we will continue to see an increase in the vacancy rate through the first half of 2021 up to about 7.25%, and then as spaces get filled, vacancies will gradually decline and level off at around 6%.

Let’s hope that these predictions by Costar are worst case scenarios and that retail can rebound even sooner. I know we’re all itching to go shop and eat without fear of getting sick.

See you next week!

Links:

Link to EIDL Application
https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance

How to fill out the EIDL Application
https://bit.ly/eidlvideo

ONT Airport drive-in movie tickets:
https://ontmktg.info/ONT-Movie-Night-1

Article on the Explore America stimulus program
https://www.forbes.com/sites/suzannerowankelleher/2020/06/13/will-a-4000-tax-credit-for-travel-be-in-the-next-stimulus-package/#32d1d3bf20ff

SF Chronicle article on permanent moratorium on evictions
https://www.msn.com/en-us/news/politics/san-francisco-passes-sweeping-pandemic-related-eviction-ban/ar-BB15gl7w

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Email: mike@progressiverep.com