COMMERCIAL REAL ESTATE FUNDAMENTALS REMAIN RELATIVELY ATTRACTIVE AND INTEREST RATES HAVE FALLEN TO HISTORIC LOWS
With the stock market in turmoil, commercial real estate may draw investors seeking a safe haven and superior yields to the bond market. Single Tenant Net Leases with longer-term leases and national recognition are well-positioned to withstand a downturn. For instance, with QSRs, even with in-house dining in many cases restricted due to Covid-19 spatial distancing, many are still functioning with carry out or delivery services. They are nimble and flexible in a changing market. Drugstores remain open as essential community needs both prescription medication, and over the counter therapies. Additionally, the Federal Government is examining the idea of working in concert with CVS to generate a coalition of testing centers nationally. Grocery stores and other staple providers are seeing higher demand and scrambling to keep shelves stocked. They are actively hiring new employees to assist with the onslaught of increased demand.
WE ARE SEEING A COORDINATED GLOBAL RESPONSE TO THE CRISIS
On March 15, the Federal Reserve lowered benchmark rates a full percentage point to nearly zero in a second emergency rate cut and initiated a $700 billion quantitative easing (QE) program. The Feds announced that it would adjust a program in coordination with five other central banks (Canada, England, Japan, Switzerland and the European Central Bank) to make U.S. dollars available at near-zero interest rates to enhance global liquidity through swap-line arrangements. The G-7 leaders met by teleconference on March 16 and issued a statement pledging to do “whatever is necessary” to protect health, restore economic confidence, support trade and investment, and ensure scientific cooperation.
This remains a fluid environment. We are gathering data and turning to numerous reliable platforms for updated information. We will pass on to you what we learn. We hope to continue to be a source of information to you in the coming days, weeks and months ahead. We pride ourselves on sharing reliable, current market information, where we can then charter a path together through this crisis.
We are open for business. We are working. We are available to answer any questions you may have during this time. We understand the concerns, and pray for everyone’s health and ease during this stressful time.
We are working diligently and will continue to do so, remotely or otherwise. We will continue to provide any new information as we learn it so that you and the industry can make the best possible educated decisions to move forward.
We wish you and yours good health,
Lior Regenstreif
