The Silver Lining

Updated: Apr 16, 2020

The pandemic has forced many of us to take time, pause, and assess what is important. We are thinking about those suffering from this illness and those working on the front lines to contain it. Beyond the fear, something powerful is happening and I know we will all take something meaningful from it.Each day, my girlfriend and I look forward to a simple walk around our neighborhood where we find streets void of traffic and full of kids playing in yards. I see parents riding bicycle or jumping on the backyard trampoline with their kids in the middle of a workday, and I can't help but wonder if some great insights might come from this extended break from the norm.

In our financial lives, and those of our clients, the words "uncertainty" and

"volatility" certainly come to mind. Especially in regards to the stock markets. For those who have real estate holdings, uncertainty exists, but the very sudden and uncontrollable loss of value is not likely to occur. Investors hold real estate in their portfolios for times exactly like this.

Short-term cash flow is a concern for property managers as some tenants seek to defer payments, but most of our network is reporting 85-90% collection rates in the multifamily space. Good sponsors and managers will really shine right now as they show off how important market selection and tenant screening is. REM Capital Partners for example, reported on April 9th that fewer than 1% of their tenants have lost jobs due to COVID-19. See my recent interview with REM Capital's President, Rod Khleif here.

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