Coronavirus-related economic shutdowns throughout the U.S. caused businesses to close, revenues to plummet and owners to question whether they could afford their rents leaving the fate of the commercial real estate industry uncertain, Fox Business reported. “We’ve not seen the full ramifications of the pandemic,” Pierre Debbas, co-managing partner and founding member of Romer Debbas, told FOX Business. “[Paycheck Protection Program (PPP) loans] served as a Band-Aid for many small businesses over the last couple months.” Business owners have until Aug. 8 to apply for an initial round of funding through the PPP and for many small business owners that loan likely would not be enough to keep them afloat — and in their rented spaces — permanently. The ability to apply for a second PPP loan may not solve the problem, either. “It will definitely help but there’s such uncertainty and unknowns for how long this will go on for,” Debbas said, adding there is the possibility of a second wave — and a second round of shutdowns. Fitch Ratings reported the largest-ever, one-month increase in delinquencies in commercial-mortgage backed mortgage securities between May and June, with the highest rates seen in the accommodation and retail industries. How the overall situation plays out, however, may be dependent in large part on how flexible banks are willing to be with property owners. Landlords can only help their tenants as much as banks will allow.
