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COVID – 19 Real Estate Implications

Teri M. Samples

March 28, 2020

As we face uncertainty during these times, it’s important to focus on the things you can control.

Real estate implications have impact on almost every sector and industry.  Every business, regardless of industry, needs real estate whether it be office space, retail or manufacturing operations, as well as individual needs. The effects of COVID-19 not only affect these businesses, but also the landlords for both commercial and residential rental real estate enterprises. 

With the current social distancing and guidance from state and local governments to close many local businesses, landlords are concerned about the future of their cash flow, financial stability and values of their assets. Landlords should be talking with their tenants and reviewing their leases to determine any actions that may need to be taken. Many of these tenants will not be able to pay their upcoming rent payments. Consider as a landlord if you have reserves to handle this strain on your cash flow.  What are some ways you can adjust and manage your cash flow?

Landlords will want to reach out to their attorney to determine any co-tenancy covenants in place. In some situations, the landlord may be required to provide tenants with rent reductions or may have the right to terminate the lease if they so choose. They will want to ask if there is a force majeure clause and discuss options with their attorney.  Other options could be offering free rent periods or rent deferral periods. Open communication and proper planning will be key to navigate through these tumultuous, uncertain times.

There are opportunities for additional financing options in many situations. The SBA has some favorable loan terms available for those that qualify and conventional financing options may be available.  If you as the landlord are not eligible, perhaps the small family owned business you are leasing space to would qualify. You should consider all options.

The CARES Act passed Friday, March 27 by the President has some promising provisions that will provide some tax relief and other incentives that will be helpful to the real estate and construction industries.


Industry experts are suggesting that while industries have been more impacted by COVID-19, there may be a slower rebound for the real estate industry.  We’re here to help you navigate these challenging times. For impacts on the construction industry, click here, or visit our Resource Center for more up-to-date information.

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