
May 26, 2020
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
- Lots of restaurants also won’t reopen
- “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”
- Barabara asked her employees how many days they want to work in the office and they said about 2 days a week
- “Maybe cut my rent in half or by two-thirds and just open common areas with meeting rooms for my staff” – Barbara Corcoran
- 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
- Lots of restaurants also won’t reopen
- 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”
- “I’m certain not everyone is going to be hired back” – Barbara Corcoran
- 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
- 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
- Whenever there’s change, there’s opportunity
- Instead of cutting staff, ask everyone to take a pay cut