Friends and Colleagues,
Here’s what I’ve heard on the street:
- Federal Reserve Chair Jerome Powell stressed the economy can bounce back much faster if we all just wear masks. Sounds simple, yes? He recently said: “There’s actually enormous economic gains to be had nationwide from people wearing masks and keeping their distance.”
- During this Covid-19 pandemic, Commercial landlords and tenants are working out rental arrangements together, peacefully, without the need for third party or municipal oversight; I personally am involved in landlord/tenant relationships daily. The spirit of cooperation is working.
- Kindness is being paid forward, as we lead by example and others follow suit. I’ve heard from colleagues that they have followed my example in how to work with people in these difficult times.
- There is interest in commercial real estate, despite fears of a weakening economy. I have been showing property for lease and for sale. The entrepreneurs and investors are out there looking for opportunities.
- Neighborhood and main street retail properties are getting too much negative press. Over the last decade we have seen the internet’s prominence diminish the retail strength in soft and hard goods tenants. However, there are many service-commercial businesses not affected by the internet, that continue to be relevant and necessary.
- Smaller office properties are also getting maligned. If you are sitting on a vacancy in the East Bay, you may very well benefit from a larger office tenant downsizing and/or relocating from San Francisco. The larger San Francisco office towers may, however, be in trouble. For example, Pinterest recently bought out their long-term lease for $89.5 million. Others may soon follow suit.
What needs to happen to help local real estate:
- Cities need to quickly adapt and be flexible on zoning. Often prospective tenants are turned away or ultimately lose interest in a space for lease because of zoning bureaucracy. There is no doubt our main streets will see a spike in vacancies, so brokers and landlords will need every tool available to fill them.