{"id":1004402027,"date":"2020-03-23T06:13:33","date_gmt":"2020-03-23T14:13:33","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004402027"},"modified":"2020-03-24T12:09:04","modified_gmt":"2020-03-24T20:09:04","slug":"california-lockdown-poised-to-batter-real-estate","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/california-lockdown-poised-to-batter-real-estate\/","title":{"rendered":"California Lockdown Poised to Batter Real Estate"},"content":{"rendered":"
\"\"<\/a>

California Governor Gavin Newsom. Image courtesy of Gage Skidmore via Flickr<\/i><\/p><\/div>\n

Property owners and managers face additional uncertainty from America\u2019s deepening coronavirus crisis, with California issuing a statewide stay-at- home order for its 40 million residents on Thursday night. The new directive adds to mounting pressure on the commercial real estate industry across the U.S., which is already seeing large-scale retail closures<\/a>, the shuttering of gaming and hospitality destinations<\/a>, and a steep drop in office and apartment property tours.<\/p>\n

Gov. Gavin Newsom\u2019s extraordinary order calls for the Golden State\u2019s residents to remain at home indefinitely, with exceptions for \u201cessential\u201d travel such as visits to grocery stores, banks and laundromats. The order also bans all public events and gatherings and freezes all businesses except in critical sectors, such as energy and emergency services.<\/p>\n

\u201cThe economic grind-to-a-halt from the lockdowns are unprecedented and will have significant impact on commercial property, especially from a legal standpoint, as force majeure and legal contracts come under scrutiny from all angles as it relates to current in-place cash flow and the viability of all types of customers and businesses that landlords count on,\u201d<\/em> Michael Knott, U.S. Director of REIT Research at Green Street Advisors, commented to Commercial Property Executive<\/em>.<\/p>\n

\u201cFundamentals will slow and transactions and financings are both huge question marks right now,\u201d<\/em> he added. \u201cRisk mitigation and cash preservation will become paramount. There is no playbook for a pandemic-led economic contraction and bringing society to a full stop.\u201d<\/em><\/p>\n

Hotels hard hit<\/h2>\n
\"\"<\/a>

Downtown Los Angeles skyline. Image courtesy of Adoramassey via Wikimedia Commons<\/i><\/p><\/div>\n

Within the real estate industry, hotel and retail properties are among the assets most exposed to a sweeping halt on discretionary travel and business in the most populous state in America.<\/p>\n

Data analytics firm STR reported on Friday that the U.S. hospitality market\u2019s revenue per room available (RevPAR) plunged by 32.5 percent for the week of March 8-14 compared to the same period last year, as occupancy dropped by 24.4 percent. The San Francisco and San Mateo, Calif., market witnessed the week\u2019s second-largest drop in RevPAR, at 63.3 percent, and the second-steepest occupancy decrease at 51.6 percent.<\/p>\n

Nationwide, hotels catering to meetings and group business experienced the sharpest performance declines, driven by a flurry of event cancellations and government restrictions on the size of gatherings, STR found.<\/p>\n

\u201cThere has truly been a complete flight of capital\u201d<\/em> from the U.S. hospitality sector, noted Willy Walker, chairman & CEO of commercial real estate finance firm Walker & Dunlop, in a webcast on Wednesday. \u201cThere is nobody right now quoting on a hospitality deal, and it would be my expectation that we see defaults coming in in the hospitality space as debt service starts to take over there.\u201d<\/em><\/p>\n

Apartment landlords may have less to fear from a protracted shelter-in-place order than their counterparts in the hospitality, retail, and office sectors. \u201cMultifamily is still extremely active,\u201d <\/em>Walker observed.<\/p>\n

\u201cThere is still plenty of liquidity in the multifamily space, and there is a high volume of deals being processed, both from a lending standpoint and an investment sales standpoint.\u201d<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The shelter-at-home order, which covers 40 million people, brings more uncertainty for property owners and managers.<\/p>\n","protected":false},"author":744,"featured_media":1004402036,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21751,21742,15],"tags":[48950,49028,44213],"class_list":["post-1004402027","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-hotel","category-latest","category-west","tag-coronavirus","tag-governor-gavin-newsom","tag-walker-dunlop"],"acf":[],"yoast_head":"\nCalifornia Lockdown Poised to Batter Real Estate - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/california-lockdown-poised-to-batter-real-estate\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"California Lockdown Poised to Batter Real Estate\" \/>\n<meta property=\"og:description\" content=\"The shelter-at-home order, which covers 40 million people, brings more uncertainty for property owners and managers.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/california-lockdown-poised-to-batter-real-estate\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2020-03-23T14:13:33+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-03-24T20:09:04+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/03\/Gavin-Newsom.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Greg Isaacson\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/california-lockdown-poised-to-batter-real-estate\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/california-lockdown-poised-to-batter-real-estate\/\",\"name\":\"California Lockdown Poised to Batter Real Estate - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/california-lockdown-poised-to-batter-real-estate\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/california-lockdown-poised-to-batter-real-estate\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/03\/Gavin-Newsom.jpg\",\"datePublished\":\"2020-03-23T14:13:33+00:00\",\"dateModified\":\"2020-03-24T20:09:04+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/1a92010198045e41b0b801129a41b3d8\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/california-lockdown-poised-to-batter-real-estate\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/california-lockdown-poised-to-batter-real-estate\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/california-lockdown-poised-to-batter-real-estate\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/03\/Gavin-Newsom.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/03\/Gavin-Newsom.jpg\",\"width\":800,\"height\":620,\"caption\":\"California Governor Gavin Newsom. 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