Well the my business world ended a little more suddenly than I expected. Over a 2 day period I went from being fully booked into Spring 2021 to turning tricks on 4th Street for toilet paper. Some thoughts:
– Owner optimism for a speedy recovery is directly proportional to their leveraged LTV. Unicorns and rainbows in 2 months from those at risk due to high LTV. Low LRV and cash owners are settling in for at least 18 months.
– 100+ New Home Permits Applied For This Week – Production builders submit “Master” permits with variants for permit review and approval and pay the review fees. Once the Masters are approved, review fees for the actual units are a couple hundred bucks each – the real fees are when the permits are actually picked up. So submitting is just keeping your team active and does not necessarily indicate new construction.
– Anyone building or leasing Bar/Retail/Restaurant right now is running scared – the market died and the prospective tenants have no financing to move forward. Where are the Tenant Improvement permits for Rancharrah Retail?
– Park Lane – 700 or so $2400+ units about to come online this year. I’m sure pre-leasing is going well. So Park Lane will have to drop pricing, and competing properties will RAISE pricing to meet Park Lane. Don’t be surprised if our rent crisis doesn’t actually accelerate as prospective SFR buyers waver and rent instead.
– Midtown Commercial – It was dying before Covid 19, and I can’t imagine it will thrive after it. Not at the current rents.
Not meaning to spread my negativity, just wanting to get a discussion started and hear from you on the front lines.