Drew Sigfridson, SIOR / March 26, 2020
By Drew Sigfridson
After a fantastic, but abbreviated trip to Austria in early March, I now find myself in a 14-day self-quarantine. My family and the partners at my office thought it would be prudent to take additional precaution and have me live “upta camp” at the lake… by myself. Normally, this might be a nice respite, but the ice is still on the lake and the seasonal community of closed-up houses makes the current situation feel all the more ominous and “end-of-world” like. That being said, I have my health, my family is healthy and everyone in my office is healthy and safe right now as well. We are adjusting to a new reality, as is everyone around the globe. Somehow, it is comforting to know that we are not alone in this situation and no matter how bad your personal situation may be, there are inevitably others who are worse off than you. All of us are in this situation together and all of us will be stronger once we emerge back into normalcy over the coming months.
As real estate professionals, we are constantly working in the world of transactions and relationships between buyers and sellers and tenants and landlords. Bankers are typically involved in many of the transactions as well. Right now, we are all in this fight together and all of us are on the same team in the battle to preserve the economic vitality of our individual businesses, our cities and state. It is through times like this that we form long-lasting bonds between tenants, landlords and bankers because we must all work together in order to thrive in the future. We encourage frank and honest conversations to occur between all three of these groups and stand ready to act as an intermediary to assist as necessary. Nobody should take advantage of a difficult situation in order to profit from crisis, but there will be real pain out there and we need to help our neighbors, friends and clients as best as possible.
We are already getting calls from businesses needing help selling or subleasing their properties. Similarly, we are getting calls from investors looking for sale-leaseback opportunities and cash-flowing assets to move funds out of the stock market and into commercial property. There will be many restaurants, bars, hotels and entertainment venues experiencing difficult times. We encourage everyone to pay it forward and buy gift certificates for future use to get your favorite venue through this closure period.
How is this situation different from past crises? During my time in commercial real estate, I recall the dot-com crash in 2001, the shattering impact of 9/11, the financial crisis of 2008/2009 and the volatility around the 2016 elections. Fortunately, I was not in business to witness the credit crisis and savings and loan problems of the late 80s/early 90s which decimated the real estate industry. I have partners who recall those memories vividly and have constantly reminded our clients and brokers in our company about those times and how we should be prepared and conservative. The city of Portland and the State of Maine were hit very hard in the early 90s and our firm has retained that institutional knowledge. We are cautious and mindful of how quickly things can change.
Over the years, our community has been fortunate to have strong banks, solid liquidity, low vacancy rates, strong, organically grown companies, and relatively little speculative commercial construction. All of these factors will bode well for our future. In addition, this is a small, tight knit community. The small business owners and large business executives, bartenders, hairdressers, nurses, mechanics, bankers and plumbers are our neighbors and our friends. We rely on each other in good times and will certainly need to rely on each other during these trying times. I’m confident and optimistic in our future and in our community. The outpouring of support and camaraderie I have already witnessed is truly inspiring. As a company, we are going to do what we can to support and help our neighbors and friends. We are extremely fortunate to live and work in Maine and now is the time to give back and support your neighbors in need. Thanks for all of your support and business over the years. All of us at The Boulos Company look forward to another 45 years of servicing the Maine and New Hampshire communities.
Let us know how we can help you plan your future.