To better understand the impact of COVID-19 on commercial real estate, we recently invited principals of Juniper Square customer companies to participate in a survey covering topics ranging from rent collections to their view of the macro environment. 65 senior decision-makers participated in this study from April 3-7, 2020. Key highlights are as follows:
89% of respondents across a range of property types are in discussions with tenants about rent mitigation
More than half of respondents said these discussions are either “frequent” or “very frequent.” Most tenants are seeking deferrals at this point.
78% are concerned about their ability to meet loan covenants if social distancing measures last 3+ months
The majority of respondents are in discussions with lenders about flexibility. Two-thirds of those in loan service mitigation discussions are discussing deferrals.
Most transactions in process are expected to close, including sales, debt financing and refinancing
Interestingly, there’s a disconnect between the confidence of buyers and sellers. 51% of buyers are confidently planning to move forward with acquisitions without delays, whereas only 12% of sellers feel confident that their deals will go through without delays.
Most think the COVID-19 crisis will impact commercial real estate less than the Great Recession of 2007-2009
In the worst case scenario, only 1 in 5 respondents felt property values would decline 40% or more as a result of this crisis. The best case scenario for most respondents was a negative impact of less than 20%.
To download the survey summary, click here.