With everything happening in the world, I’m sure like a lot of you, I’ve experienced a wide range of emotions over the last week ranging from fear to uncertainty to sadness to being grateful for what I have. But folks I am frustrated right now which might not be the best time to be writing a blog but here I go.
On the positive, one of the aspects that I love about the commercial real estate business is that it is comprised of so many people that believe in hard work and self-reliance. As the President-Elect of Retail Brokers Network (RBN), I moderated a call this week with our members across the US who are owners and leaders of boutique brokerage firms like Progressive Real Estate Partners. These people were reaffirming to me as almost every member on the call indicated that they plan on paying their employees, rent/mortgage, and other obligations without looking for handouts. And for the few who can’t meet their obligations they’re prepared to do what’s necessary to keep their firms afloat.
But unfortunately this was one of the few instances when I have heard this attitude and sentiment. More often, I’m hearing a common theme of “what will someone do for me” versus “what can I do for others”. I have talked to a number of clients who are getting calls from both national and independent tenants who are indicating that they do not plan to fulfill their obligations regardless of their financial situation. Many financially stable businesses are indicating that due to being closed, they should not be obligated to pay their rent. Some national tenants, after being closed for only a week or two, are sending out mass letters asking for rent abatement, deferral or reductions and, in some cases, for longstanding concessions without any evidence that they will be damaged for the long-term.
During the RBN call, one of my colleagues shared that they asked a national retailer who had requested rent abatement to provide their sales history. The retailer answered, “we are too busy to provide that information”. In my opinion, this is unacceptable behavior.
I am hearing from some property owners who want to know what type of mortgage forgiveness they are going to get before knowing whether they will need it or not. I’m also hearing from owners that they are cutting back their vendors who are people that likely really need to work.
Our Federal Government that was already running a $1 trillion deficit when the economy was rolling is now about to add another $2 trillion into the equation. Do we really want to keep burdening future generations with this debt?
I get it, this new government economic package may be necessary and it might be the right thing to do. But during this time, we all need to do our best to fulfill our obligations and not abuse the system or take advantage of others. Otherwise, I fear we are going to set off a terrible chain reaction that will damage our economy in BOTH the short and long term.
Yes, most of us are being dealt a bad hand this year. And I fully recognize that there are many in our business that simply do not have the resources to withstand this severe economic disruption. And, in those cases we should definitely find mutually beneficial solutions regardless of whether they have or have not been prudent in their past decisions. By helping them we will also be helping the overall economy.
But, if those who can meet their obligations, elect not to do so then we are effectively encouraging the government to save all of us and that comes with the loss of the liberty that so many of us cherish.
As April 1 approaches, I want to encourage those in the commercial real estate industry to meet their obligations if they have the capacity to do so. It is not good business to use the current circumstances to take advantage of the system. However, it is good business to fulfill your commitments, contractual or not and to help those that really need the assistance.
This moment reminds me of former President John F. Kennedy’s famous quote “ask not what your country can do for you– ask what you can do for your country”. We are all in this together and in closing, I truly wish all of you good health, much peace, financial stability and prosperity in the future.
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