While we’re right in the middle of dealing with everything that’s going on right now, and people are trying to get their bearings on what now to expect, the question arises around whether or not we’ll see good real estate investment opportunities coming our way. Well the answer is, “Yes, we will see good investment opportunities”, but both the type of the opportunities
and the magnitude of them will still depend on how everything will continue evolving within the coming months.
There will be some property owners who, when looking ahead, will believe that now is the time to sell, because they’re concerned about what still may be coming our way. For these people, their motivation will be to minimize their risk, and take what they can for their property right now. Because let’s face it, we’ve never seen an economic downturn begin like this one, and we can’t predict with certainty what the economy will really be like in six months, in one year, or even in two years down the road.
In addition, there’s something else on the horizon right now that could dramatically impact the availability of good investment opportunities. In California, for example, the legislature is now discussing passing SB 939, which will allow tenants of commercial properties to not pay any rent through December of 2021, and landlords would be forbidden from evicting any commercial tenants during this time. So one could imagine what this would then do in terms of putting a freeze on building activity, where many buildings and units could not be leased or sold during this time, and many investors would probably be very concerned about buying buildings that are subject to this kind of moratorium, too.
But while this law would apply specifically within California, we have to believe that other states will consider enacting similar legislation also. Then at the same time, for buildings where the tenant or tenants seem to be doing pretty good financially, and they’re still making their monthly rent payments…buildings like these could then be sold to investors, and you might just see some owners deciding that now is the time to sell these buildings, too. In addition, during The Great Recession we learned a term called “extend and pretend”, where lenders, instead of foreclosing on delinquent property owners, worked to then revise the payments on these loans, which greatly reduced the number of foreclosures that we saw, too.
So, in putting all of this together, yes, we will see good investment opportunities coming our way, but we’ll really need to see how this situation plays out over the coming months, to determine both the number and the exact type of good investment opportunities that will be coming our way.
