Video Index (with direct links)
0:00 Mike vs. the squirrels
1:31 Most of California is open for shopping and dining
2:01 Poll: Should Mike get a haircut? If so, what style?
2:38 More funny social distancing logos
3:02 Brad is the new President of Retail Brokers Network
3:55 Senate Bill 939 and how to express opposition to it
4:50 Costar’s prediction about future distressed property sales
6:04 Coronavirus’s effect on local city governments
About a month ago, when I was stuck at home in quarantine, I installed a bird feeder outside my dining room patio door. Squirrels came by and tried for weeks to get the food, but they could never quite reach it. Until today, when they finally succeeded! This is the extent of my daily entertainment while on lockdown.
California opening up further
Last week, Orange County and the Inland Empire moved further into phase 2.5 of reopening, with many malls opening as well as sit down restaurants. In the IE, the Galleria at Tyler in Riverside, Ontario Mills, and Promenade in Temecula are among the malls that are now open. The Moreno Valley Mall and Montclair Place are set to open this Friday, May 29. Victoria Gardens in Rancho Cucamonga, and South Coast Plaza in Orange County are scheduled to open on June 1.
on Tuesday afternoon, Governor Newsom announced that most counties in California will allow hair salons and barbershops to open. Finally! San Bernardino, Riverside and Orange Counties are among the counties where you can get a haircut, but Los Angeles County is not on the list.
Should I get a haircut? Or just let it grow long and join an 80’s metal band? Click here to take the poll!
Brad is the new President of Retail Brokers Network
My managing broker, and head coach at Progressive Real Estate Partners Brad Umansky, is the new President of the Retail Brokers Network. RBN is a network of over 50 boutique brokerages in North America focused on the retail commercial real estate industry. If you have a retail property that you are looking to sell, even if it’s not located in California, please let me know and I can connect you with one of my colleagues within RBN. Brad has shown me the ropes in commercial real estate and continues to be a mentor to me every day, so I want to congratulate him on his new position.
Senate Bill 939
Last Friday, May 22, Senate Bill 939 was advanced further by the California Senate Judiciary Committee. This bill makes it illegal for landlords to serve eviction notices for businesses affected by the coronavirus until a full year after the emergency order ends. Serving an eviction notice would not only be illegal, but would come with a $2,000 penalty. If passed, it would also allow restaurant and bars (of non publicly traded companies) to walk away from their leases with just a penalty of three months’ rent. It does not address any obligations that landlords may have with their lenders.
To express your opposition to this bill please visit http://bit.ly/oppose939
Upcoming distressed commercial property sales
Costar predicts that in a few months, there will be even more distressed sales than we had during the great recession. Back during the great recession, Costar reported $176 billion dollars of distressed sales from 2008 to 2015, with the peak being in 2012. They estimate that just in two years; 2021-2022, we may have $146 billion, and possibly up to $565 billion of distressed sales coming up. So if you have cash and are waiting on the sidelines to make your move, your time may be coming soon, but it’s not quite here yet.
This data is consistent with what I’m seeing in the market, with many property owners feeling that their properties are still worth pre-corona prices and buyers trying to pick up properties for pennies on the dollar. But we really won’t be able to accurately assess the impact of the virus on retail property values until all businesses are allowed to open again, and we determine which are able to stay open going forward.
Effect of the coronavirus on local city governments
City governments depend heavily on sales tax revenue from stores and restaurants, and with almost everything being shut down for the past few months, and many future closings, the cities’ funding has been reduced significantly. See this part of the video for specific examples of which cities in the Inland Empire will have to cut and reduce their budgets.