By now, it’s fair to say that 2020 dramatically impacted both residential and commercial real estate. The COVID-19 pandemic and the restrictions put in place to slow the spread of the virus forced several small business owners to suffer financially, with some establishments making the difficult decision to close their doors for good. As we move into the new year, we are eager to see what lies in store for the commercial real estate market in Washington state and across the country. Let’s take a look at a few key takeaways from a recently released report by Trepp and Commercial Real Estate Direct, as well as what commercial landlords and tenants can expect in the upcoming year.
Perhaps the most notable impact of the pandemic was how many restaurants and bars had to close their doors, either temporarily or permanently. As of early December, 624 restaurants and bars decided to close permanently in the Seattle area alone. Across Washington state, small businesses had to lay off workers, ask for extensions for paying rent, and apply for PPP loans or other types of financial assistance in order to mitigate the economic fallout.
Despite these significant challenges, there are small glimmers of hope for businesses and commercial properties. So far, the commercial mortgage-backed securities (CMBS) industry has weathered the storm fairly well. Although lending sputtered and stopped for a brief period, the market has since rebounded—thanks in large part to government stimulus relief programs. Market experts anticipate that the pandemic will impact commercial properties in different ways, depending on what type of services it offers. Counter-cyclical property types, such as industrial, self-storage, and single-family rentals, are more likely to benefit during this time, while properties like malls and office buildings may experience a permanent fallout from this societal shift. Properties in the hotel, apartment, and travel industries are expected to pick up once vaccines make tourism safer.
If you have an issue or question about a commercial or residential property, it’s always a good idea to speak to a knowledgeable real estate lawyer so that you can understand your options. Meeting with an attorney can help you feel more informed and in control of your situation so that you can prepare yourself for any number of scenarios. The sooner you seek legal counsel, the more time you will have to think about your next steps.
For trusted and effective legal guidance regarding a real estate matter in the Vancouver area, contact John L. Davis PLLC today by calling (360) 597-4740.
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