Eliot Kijewski (SIOR) is the Senior Vice President at Cushman & Wakefield | CRESCO Real Estate. With more than 15 years in the commercial real estate industry, Eliot discusses how the times have changed as a result of the COVID-19 pandemic, and dives into the key takeaways for businesses during this period of uncertainty.
1. How are you attempting to stay visible in the brokerage business right now?
I’m contacting my clients more frequently via text, email, conference calls or just regular phone calls, to check in and make sure their needs are continuing to be met.
Cushman & Wakefield | CRESCO Real Estate also has their continued branding via digital marketing and email marketing, which reaches beyond Northeast Ohio.
2. What have you changed in your business model recently?
The basics have not changed much, but my conversations with clients tend to feel longer since there is more time available to discuss commercial real estate.
On the other hand, my to-do list changes daily, as there seems to be a booming sector of my clients that need to act quickly, while others need to continually discuss what might happen in the future.
3. Do you think commercial real estate in Northeast Ohio will be more handheld or take-off?
So far, industrial is ready to take off, however, this could change if the virus lingers, or there are more delays in opening the economy. Most professionals I speak and consult with, don’t want to risk an early open. My colleagues and I are still responding to RFPs, and we see people ready to commit to their industrial real estate decisions early in the process. I’ve been in contact with city inspectors about several properties, and they are overloaded with work right now. Approvals are in high demand.
The office market is a little different; I expect there will be a retrain and restart period, along with a “wait and see” approach as we adapt to new close-quarter workspace changes. Retail is very up in the air, and will largely be a question of how effectively each business fared during the shift to virtual sales and to-go orders.
4. What recommendations do you have for tenants and landlords over the next 30 / 60 / 90 days?
Tenants need to be getting in touch with their landlords immediately to begin conversations about their lease terms and current financial situations. Currently, there are no laws or mandates that allow a commercial tenant to stop paying their rent. However, some lease terms do include provisions regarding rent abatement.
In either case, landlords need to know if a tenant business is furloughing its employees, shutting its doors altogether, or otherwise taking a financial hit
Tenants also need to be aware that landlords have a lot to consider when it comes to making rent adjustments for tenants; they have responsibilities to their lenders, partners, contractors that care for the property, and any other staff members. When a landlord loses rent income on a commercial property, there is a domino effect that involves many other parties.
Key points of discussion among commercial landlords and tenants should include:
- Is the tenant business “essential?” If so, there is likely no case that can be made for rent abatement.
- In the event that a tenant is unable to pay, when will they become solvent? Within 90 days? Another time frame?
- Is the landlord able to receive any relief from creditors?
The bottom line: tenants and landlords need to communicate effectively, now more than ever.
These are uncertain and unprecedented times, and it is important that we understand how the commercial real estate space is going to change and shift as a result. It changes often, so we need to keep in touch.
Our job as brokers stretches beyond simply giving clients the square footage they need to conduct business; our role is to support local businesses as we all adapt to changes in daily life and the professional world, like the 6 feet office.
To learn more about how CRESCO, Greater Cleveland’s leading commercial real estate company, can help you with your property needs, contact us at 216.520.1200, or fill out the form below. A CRESCO professional will contact you shortly.