Views on Commercial, Residential, and Retail Real Estate | Barbara Corcoran on Business Casual

Check out the Business Casual Episode Page & Show Notes

Key Takeaways

  • Barbara Corcoran is rethinking her commercial lease because: 
    • It’s expensive
    • Many employees prefer working from home so they don’t need as much office space
  • “I’m anticipating that half of the retail stores will not reopen” Barbara Corcoran
    • Lots of restaurants also won’t reopen
      • Even if the pandemic ends, people won’t immediately resume shopping at retail stores
  • “Nobody is going to get through this by being greedy” Barbara Corcoran
    • As a landlord, consider rolling over your tenants rent so that they can pay it back in the future
  • “I’m certain not everyone is going to be hired back” – Barbara Corcoran
    • “I think companies are using this as an excuse to clean house and get themselves in shape”
  • The businesses that are doing the best during this crisis are run by leaders who welcome change
    • Whenever there’s change, there’s opportunity 

Intro

  • Barbara Ann Corcoran (@BarbaraCorcoran) is an American businesswoman, investor, speaker, consultant, syndicated columnist, author, and television personality. 
  • Host: Kinsey Grant (@KinseyGrant)

Rethinking Office Space

  • Barbara is rethinking her commercial lease because: 
    • It’s expensive
    • Many employees prefer working from home so they don’t need as much office space
      • “Maybe cut my rent in half or by two-thirds and just open common areas with meeting rooms for my staff” – Barbara Corcoran
        • Barabara asked her employees how many days they want to work in the office and they said about 2 days a week
          • “I don’t think we’ll ever go back to what we had before”
  • Once you have more than 10 employees, you’ll probably want your own office space
  • Rent will likely have to be lower to get companies to rent office space
  • Who will lose the most money?
    • The banks that own mortgages on property owners
  • If commercial buildings fold, it will impact more than just the property owner
    • E.g: A midtown office building employs dozens of maintenance workers (cleaners, security, etc.), if the building loses its renters, those employees will be out of a job
  • No one knows how the commercial real estate market will change in a post-pandemic world

Thoughts on Retail & Residential Properties 

  • “I’m anticipating that half of the retail stores will not reopen” Barbara Corcoran
    • Lots of restaurants also won’t reopen
      • Even if the pandemic ends, people won’t immediately resume shopping at retail stores
  • COVID is a huge blow to retail stores, but a tiny group of retailers will survive because people love visiting their stores in-person
    • You likely won’t have huge retail brands, but you will have smaller boutique brands
  • Half of the landlords in America only own 1-2 buildings
    • Landlords may start to convert commercial real estate into residential properties to generate a better income stream
  • A lot of landlords are helpless now because tenants aren’t paying rent and they can’t legally take any action
    • If a landlord can’t get rental income, they can’t pay taxes, and banks don’t get their mortgage payment
  • “Nobody is going to get through this by being greedy” Barbara Corcoran
    • As a landlord, consider rolling over your tenants rent so that they can pay it back in the future

Additional Notes

  • Without testing and a vaccine, the economy won’t bounce back anytime soon
    • A lot of people will be looking for jobs after the pandemic ends because their business either won’t under or isn’t re-hiring
      • “I’m certain not everyone is going to be hired back” – Barbara Corcoran
        • “I think companies are using this as an excuse to clean house and get themselves in shape”
  • The Federal government isn’t doing a good job with combatting this pandemic
  • The businesses that are doing the best during this crisis are run by leaders who welcome change
    • Whenever there’s change, there’s opportunity 
      • One of Barbara’s company created designer masks that sold extremely well
  • Instead of cutting staff, ask everyone to take a pay cut
Business Casual : , , , ,
Notes By Alex Wiec

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