Re-Opening America

Video Index (with direct links)
0:36 – Update on PPP and EIDL loans
2:08 – 14 States are opening up businesses
3:19 – Commercial real estate update
4:46 – Which retailers will thrive and which will struggle, post-Coronavirus?

EIDL and PPP Update
Last week, I talked about new approved funding for the Paycheck Protection Program and the Economic Injury Disaster Loan.  The PPP Program opened back up this Monday, and banks were immediately slammed with applications, but their first priority was processing all of the applications that were in the queue from the first round.

Regarding the EIDL (Economic Injury Disaster Loan), according to an article in Newsday, the SBA is no longer accepting any more applications at this time, saying that all of the funding has been used up by applications already in the queue.  I find that a little bit hard to believe, since the government just announced another $10 billion dollars of funding last week!

Reopening America
It looks like some states have decided to open up, despite the federal government advising against it.  14 states have reopened stores.  For example, Texas opens on May 1, with malls, movie theaters, and restaurants opening, but only at 25% occupancy.  Beaches in Orange County were open this past weekend.   There is a concern of a possible second wave of the coronavirus if we all go out too soon.  Let’s hope that doesn’t happen!

Commercial Real Estate News
Last week I was a panelist on Chris Marabella’s Net Lease TV program, alongside several other real estate brokers from across the country.  All of us are transacting deals right now. Hot tenants are single tenant fast food, drug stores, and particularly dollar stores.  Almost all of the deals that we are working on are cash deals, and most of the active buyers we are seeing in the market are high net worth individuals, as opposed to companies or institutions.

Simon Property Group, the largest mall owner in the US, has announced plans to open 49 of its malls this weekend for limited hours, from 11am to 7pm.  They will be instituting some precautions, such as providing masks and hand sanitizer for customers, and limiting the density to one shopper per 50 square feet, and trying to get people to walk in only one direction on the mall floor.  Simon’s stock is up 17% in the past two days on this news.  However, with this announcement coming with such short notice, I am curious to see how many of the retailers within the mall will choose to open, and will be able to staff up in time.  I’m also curious to see how many shoppers decide to go to the malls.  Are they eager to get out of the house and shop? Or are they still afraid to go out for fear of getting sick?

Which Retailers Will Thrive and Which Will Struggle, Post-Coronavirus?
My managing broker, Brad Umansky, posted a great article to his blog this week handicapping different retailers, and who he thinks will come out strong out of the pandemic, who will come back, but struggle, and who may not get back to 2019 levels.  I summarize the findings in the video, but I encourage you to check out the article, which includes Brad’s commentary on why he believes these retailers will thrive or struggle.

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Mike Lin, CRE