The world in just the past few weeks feels like it has turned upside down. The near total shutdown of California last week and hopefully by now the rest of the United States will have a staggering economic impact. With so many small businesses closed a number may never reopen. With brick and mortar retail already on life support we may see even national chains disappear. Millions or tens of millions are out of work, many not on any big corporate ‘we’ll take care of you’ wage structure. The R word Recession appears to be a certainty, and for the first time in my life the D word may be possible is there is no stopping Covad19 until we have a true vaccine in enough capacity for all of us, not just here in the United States, but all of us in the world and how long after that will it take for the airline, cruise ship, hotel, restaurant and other industries to recover? Two or three years? Working from home is a hardship for many, with kids out of school, home distractions, insufficient or inefficient working space or conditions. It works for some, and for the rest of us we must adapt. How many office users will still have the high productivity during these difficult times, and how many will not survive? Should companies commit to long-term leases, will vacancy skyrocket and rental rates crater? Will the high cost of tenant improvements come down as a slight silver lining to this economic abyss?

Office tenants and landlords, I am not a lawyer nor do I know anything about insurance or lease clauses, but check your leases and insurance policies for Business Interruption which might cover you for six months or more of income loss. We are also waiting to see if lenders will defer or extend loans to cover shortfalls  during this period, and what the small business programs will be to help businesses with their employee wages and rent. What strains might this place on our banking system? I still remember the early 1990;s during the Savings & Loan Crisis where over 25% of all our office buildings went into foreclosure.

We are all in this together, and we will get through this just as we did in 9-11 and World War II. Keep the faith, and stay healthy and strong for your family and community!