The past couple of months haven’t exactly been business as usual for Texas businesses as they dealt with the initial news of the COVID-19 pandemic, the subsequent closure of anything billed non-essential and now the reopening process. It’s been challenge after challenge: how to respond, what to do when shut down, how to operate in this new normal. “No doubt, this pandemic has not been a friend to many businesses and the effects will remain long after this first wave of infection is gone,” said EDC Executive Director Alex Getty. “However, the eternal optimist in me, while sometimes hard to see, looks for silver linings.” Lucky for those in La Marque, the city’s Economic Development Corporation is an example of that, stepping up and working at lightning speed to help its business owners stay afloat. It was only back on March 18 that the City of La Marque ordered the closure of
bars, restaurants and entertainment venues. Then came Governor Abbott’s executive order on March 19, followed by a stay-at-home order from Galveston County Judge Mark Henry. “We acted quickly to infuse desperately needed cash into small businesses that have been negatively affected by policies put in place to flatten the curve,” Getty said. “Those efforts will save some businesses.” Knowing the threat posed to the livelihoods of so many in La Marque, the EDC got to work on a plan. Just two weeks after that March 18 order, it had a plan: the Emergency Business Retention Program, which would provide grants to qualified La Marque business owners impacted by the COVID-19 pandemic. The EDC’s board of directors approved it on April 2 during a special meeting and by April 8, the Grant Application Review Committee met to decide who would receive the grants. Click to read more at www.rednews.com.
At our house, the doorbell rings more now than it ever did before the COVID-19 pandemic. The sound doesn’t typically announce a friendly visit from a neighbor these days. Instead, it alerts the household that our delivery has arrived, that on our doorstep awaits something as mundane as
groceries or as exciting as new craft supplies for the kids. Our family is one of millions doing our best to heed recommendations from the Centers for Disease Control while also supporting the local economy. In doing so, we’re indirectly bolstering the industrial commercial real estate market. It’s no surprise that online sales have seen an incredible boost in the past few months. After all, most stores were completely shut down for a period, only able to offer their wares via the internet. As a result, there’s been an increased demand for warehouse, cold storage and distribution space.
That need is driven in large part by the food industry, which has documented growing consumer desire to pick up grocery items or to have them delivered as an alternative to winding the narrow aisles of their neighborhood market. Daily online sales doubled between March 13 and March 15 (compared to March 1 to March 11), per Adobe’s Digital Economy Index. Before COVID-19 online grocery sales only represented 1.5 percent of e-commerce sales. They now account for more than 10 percent. Before you argue that the spike is temporary, a survey conducted by Brick Meets Click / Shopper Kit suggests that nearly half of people who are doing their shopping online intend to do so even after the pandemic is over. Click to read more at www.rednews.com.
Escalations are an important part of commercial leases and are simple in theory, but in practice escalations have the potential to be wildly complicated based on the makeup and occupancy of a given property. “It’s very much of a niche specialty that requires a lot of experience to get it right,” says Bill Brownfield, Counselor of Real Estate (CRE), Certified Commercial Investment Member (CCIM) and author of The Escalation Handbook for Office Buildings. Escalations are the process by which operating expenses and taxes are allocated on a pro-rata basis to a property’s tenants (in addition to the base rent they pay). Because leases can—and often do—vary in definitions of who pays for what, it can be difficult to accurately calculate and invoice each tenant for its appropriate share. “Probably half of escalation invoices have errors in them. Those can be small errors or large errors,” Brownfield says. “Every individual lease is different, which means that there is the potential each tenant’s share of operating expenses to be calculated differently.” Click to read more at www.rednews.com.
More than they ever have before, Americans are working from home to follow CDC recommendations about social distancing to slow the spread of COVID-19. The situation is forcing employees and employers to adapt to a kind of new normal. “Connecting with clients and connecting with my team has been different,” says David Euscher, vice president and interior design studio leader at Corgan. “We’re in a very collaborative field and I find that communication is much more scheduled and intentional than when you’re in a studio space together.” Corgan, a global architecture and design firm founded in Texas more than 80 years ago, works with clients internationally to create places “where people thrive and clients succeed.” Projects span a range of categories from offices to healthcare to airports. The company touts clarity, singularity, locality, responsibility and empathy as its design principles. Empathy is something Euscher, who’s based in the firm’s Houston office, says he’s grateful to see more of as American cope with a once-in-a-lifetime challenge. “People are reaching out to one another on a personal level. Checking in on others, just asking, ‘Are you doing OK?” he says. “Everyone’s going through the same thing at the same time and that shared struggle is bringing people together.” Click to read more at www.rednews.com.
Necessity may be the mother of invention, but stress is the foreman provoking further innovation. In these stressful times, we’ve already seen a lot of pioneering techniques to safely keep construction sites active. In the months and years ahead, the pandemic will continue to leave its mark on the way we build the world around us. In the larger Texas metros, the COVID-19 emergency has forced some projects to partially or fully suspend operations while others that were set to break ground have been pushed until next year, according to Matt Hoglund, central regional leader and management committee member with DPR Construction. Though some of DPR’s clients have hit the pause button while they evaluate the economic impact of the pandemic on their business models, the vast majority of their projects have progressed forward. DPR instituted a number of safety protocols on active job sites that, in the end, caused minimal impacts and allowed work to forge ahead. “Construction involves mitigating hazards under normal circumstances and COVID-19 prevention is now a new hazard taken into consideration in planning daily work, labor needs and PPE,” said Hoglund. “As a result, construction has proceeded consistently in most areas, with even some additional work being added by our healthcare teams as our customers seek their own solutions as a result of the pandemic.” Click to read more at www.rejournals.com.
Even during this time of unprecedented economic turmoil, lenders are showing a willingness to back new multifamily projects—assuming certain circumstances are met. Nowhere is that truer than in the fastest-growing metro over the past decade. The Dallas-Ft. Worth area acquired 1,349,378 new residents between 2010 and 2019, more than any other U.S. metro. Projections suggest that the 2020s will be just as roaring, with an estimated 1.39 million new residents to DFW by the end of 2029. While the multifamily sector has been particularly strong across the country in recent years, the uncertainty created by the pandemic is forcing banks to take a more stringent approach to underwriting. For the moment, they are focusing on projects in high-growth markets like Dallas-Ft. Worth. Admittedly, the 2020s aren’t off to a great start. What seemed like a never-ending development cycle has slowed considerably due to the disruptions caused by the COVID-19 pandemic. Regardless of this uncertainty, nearly all of DFW’s in-progress multifamily projects have moved ahead without interruption and even some new projects are landing financial backing. According to Payton Mayes, executive vice president, regional managing partner – central region at JPI, in addition to location and fundamentals, lenders are also looking to partner with experienced firms. “Most capital wants to deal with tried and true sponsors,” said Mayes. Click to read more at www.rednews.com.