
The current challenge
Real estate investments over the past several years have been able to generate steady cash flow and yielded significantly over traditional sources like corporate deb with just a bit more risk. However, the reality has changed since the coronavirus outbreak. Across the entire value chain, real estate participants have been hit very hard. Service providers have been struggling to mitigate the health risks for both their customers and employees.
Many developers are unable to obtain permits and are faced with falling rates of return, stoppages, and construction delays. In the meantime, many operators and asset owners are faced with drastically lower operating income, and most are very nervous about how many of their tenants are going to struggle to be able to make their lease payments. The words of the day are “abatement” and “concession,” and players are working quickly to determine who they should apply for …