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Opportunity in the time of COVID

Opportunity in the time of COVID

Written By A. William Aschinger

On December 9, 2020

Even in a pandemic, there are chances to save money and grow your business.

Well, when it comes to the current state of the world of commercial real estate, I’ve got good news and bad news. I’ll start with the bad news…if you can call it news.

It’s no newsflash that COVID-19 and the ensuing economic fallout has been an unprecedented gut-punch to commercial real estate. In the past, when there was a recession due to market fluctuations, political unease, war, or terrorist attacks, there was at least some pretext for behavior. But the pandemic is like a ghost. No one knows when it will end or, more importantly, quite what the business landscape will look like when it’s over.

Many people are anxious and scared. Retail is at a stand-still as companies large and small are increasingly shifting to online sales. The mid-sized and small mom-and-pop shops don’t know if they’ll be able to compete, much less afford to keep their brick and mortar.

At the same time, with so many workers telecommuting from home amid the lockdowns, businesses are rethinking their need for office space. For example, when a law firm’s lease expires, they might consider downsizing to reduce overhead, or at least renegotiating their current lease for shorter terms. Landlords are desperate to keep their current tenants because replacements are very limited right now.

Now for the good news…or at least, rays of opportunity breaking through the dark clouds of uncertainty.

At Hilliker, I’ve noticed many of our clients are taking this time to shop for new properties. Interest rates are relatively low. It’s a good time to buy, if you are financially able. This appeals to both current renters and current owners. The latter are finding opportunities to increase their square footage for storage, manufacturing, processing, staff, retail space, and even parking. Even if they don’t need the extra room now, they can now plan ahead with a view toward future growth. Some companies are even rethinking their location, with more and more of their employees now working from home.

Meanwhile renters are capitalizing on the opportunity to get out from under the burden of a lease and into a location of their own. This, of course, applies to businesses that were already growing. But even tenants whose sales and operations aren’t exactly thriving see the opening to cut back on expenses by owning their own buildings. Now they can essentially pay themselves rent, build equity, and control their own environment.

The latter—control of your own space—is particularly appealing during the pandemic. For instance, say an accounting firm had been leasing 20,000 square-feet on one or two floors of a busy office building. Every day, they have to not only be concerned with the safety of their own employees, but they have to watch their neighbors on the other floors and in the shared lobbies and parking lots and garages. If they can buy a 10,000-square-feet free-standing property, they can now decide exactly how much social distancing their employees need and not be concerned about being packed alongside strangers from other companies in the crowded elevators of a massive office complex. They know and trust their own people to be responsible and take the necessary precautions. They are in control of their environment.

And control is the name of the game. I’ve spent 28 years, my entire career, at Hilliker, and control is central to what each client wants to accomplish. Control of their overhead, control of their environment, and most importantly control over their future. As owners of their building, they can build equity in their property. They can pay themselves rent. And, perhaps most importantly, when it comes time to retire, they can sell their business and their building, or, if they don’t have any buyers, they shutter the business and just sell the property. Either way, they’ve made their money and can pocket the profits and use it to enjoy retirement.

More than a few of those retiring clients have chosen to invest their money with Westwood Net Lease Advisors, Hilliker Corporation’s Triple-Net (NNN) Investment Partners. It’s a stable, lucrative, and, especially important these days, low-stress investment. Together, Westwood and Hilliker help investors acquire NNN properties from our proprietary database of buildings, both on- and off-market, all over the country. Westwood also has a local team of advisors and a national referral network of brokers, attorneys, lenders, environmental engineers, cost segregation companies, and title companies. It’s a perfect opportunity to invest in the future.

Business and life have never felt quite as uncertain as they do right now amid COVID-19. But that doesn’t mean we’re completely helpless to help our businesses, our communities, and our families succeed. Sometimes all it takes is searching through the gloom for those bright rays of opportunity. And it always helps to have an extra set of trained eyes to help you look.

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