Support, Intel & Resources Newsletter
Support
The author reflects on balancing remote work with family responsibilities while reconnecting with clients to understand current challenges. He offers to help others think through options and connect them with relevant network contacts.
Commercial Mortgage Market
Tom Barrack's analysis highlights systemic vulnerabilities in commercial real estate financing. The cascade of problems flows from tenants unable to pay, creating landlord payment defaults, triggering investor margin calls, and causing private equity fund withdrawals. Barrack advocates for "more comprehensive and synchronous preventative action."
Landlord Perspective
The Irvine Company initiated a 90-day rent relief program for retail tenants, with repayment spread across 2021. Office and medical landlords are evaluating similar requests. Landlord responses depend on debt obligations, reserve funds, and investor composition.
The author emphasizes early lender communication. Single-family loans already offer 90-day mortgage relief without fees or negative reporting, though commercial lenders' responses vary based on lending institution type and capital sources. Traditional lenders show greater flexibility than newer institutions.
Tenant Strategy
Tenants are pursuing rent deferrals with mixed results. The "blend and extend" tactic—securing lower immediate rates while extending lease terms—traditionally helps both parties. However, industrial rents aren't expected to decline significantly, making this approach less viable currently.
Some medium-size tenants are adapting through subleasing, logistics repurposing, and lease modifications. Growth-oriented businesses, like diagnostic laboratories receiving federal grants, can capitalize on current conditions.
Supply Chain
A compiled resource list addresses supply chain adaptation strategies, including securing chains, cash flow management, globalization reconsideration, logistics real estate, consumer product defense, and resilience building.