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

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

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

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

“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

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