There is no denying COVID-19’s impact on the commercial real estate industry. Everything from brokerage operations and the marketing of listings to showings and the ability to close transactions is requiring massive adaptations from all involved parties. These unprecedented circumstances are affecting the way that we conduct business, yes. But they are not halting our ability to persevere.
Local investment opportunities are still present, as are the needs of our clients. As we alter our business model to accommodate the times, flexibility is more important than ever. Locally, the commercial real estate market throughout Delmarva has held strong in the face of the adversities brought on by the Coronavirus. Each challenge has been met with a solution – a creative strategy that works in favor of the transaction, helping to see it through to settlement.
As we advise our clients and navigate present day transactions, our team has found that open lines of communication are often the remedy. Going above and beyond to understand the hardships that local business owners, real estate investors and tenant prospects face is important in any situation, but seems to have more of a profound impact today.
As advisors, it is our job to not only hear the concerns of our clients, but to empathize and understand. Going back to the basics and accomplishing this can lead to the development of simple solutions to seemingly complex problems faced in a transaction. The following examples demonstrate our team’s strategic response to our clients’ reservations and give some insight into the thought process of local buyers/sellers and tenants/landlords during this time:
Challenge: Tenant asks for a few months of reduced rent due to mandatory business closings.
Solution: Advisor negotiated with Landlord and was able to offer immediate free rent that will be paid back as an additional term at the end of the lease.
Opportunity: Lenders are becoming increasingly aggressive with rates and terms.
Solution: Encourage clients in the midst of negotiation to contact lenders and pursue lower rates and more optimal terms.
Challenge: Prospective medical tenant postponed their search for a new location.
Solution: Maintain the relationship, keep the client apprised of any new opportunities and follow up periodically to offer assistance.
Challenge: Buyer sought extension to due diligence period in order to see how the current global situation unfolds.
Solution: Advisor worked diligently to understand and ease the buyer’s concerns. Additional documentation and due diligence materials were obtained from seller and the settlement date remained intact.
As we continue to push forward as a community, it is important to keep our eyes fixed on the light at the end of the tunnel, meeting pessimism with an opportunistic approach. There is still an abundance of opportunity in the Salisbury market and as advisors, our NAI Coastal team is prepared to help you accomplish your real estate goals, regardless of the circumstances.
About the Author
Brad Gillis is a Principal with NAI Coastal and Gillis Gilkerson Construction and Development Company. Gillis is known for consistently adding value to commercial real estate and has an extensive history of closing sale and lease deals across the Delmarva region. He specializes in the sale and lease of medical and professional offices, industrial properties and income producing investments.