RECAP:

Moderator

Lyle Fogarty, Managing Partner, Clover Investment Properties + ULI Tampa Bay Program Chair

Participants:

• – Steve Barber, Vice President, Ascentia Development Group
• – Christopher Brewer, Partner, Gardner Brewer Martinez-Monfort
• – Lauren Campbell, Operations Manager, Eastman Equity
• – Scott Campbell, Managing Partner, Lerner Real Estate Advisor
• – Bill Eshenbaugh, President, Eshenbaugh Land Company
• – Todd Fultz, Managing Director, Plaza Construction
• – Lucia Garsys, Deputy County Administrator, Hillsborough County
• – Michael Phillips, Chief Executive Officer, Loci Capital
• – Julia Silva Rettig, Managing Director, Capital Markets, JLL

ULI Tampa Bay Chair Welcome: Lucia Garsys, Deputy County Administrator, Hillsborough County

• For 80 years, ULI has been a source for best practices and impartial information, and a forum in which the real estate industry leaders can share ideas and experiences.
• In uncertain times, ULI will be at the forefront of the innovations that will reshape the real estate industry for the better.
• Members are agile, resilient and innovative people.
• Thank you to the annual sponsors of ULI Tampa Bay for continued support during this time.
• ULI is working to reinvent how we connect our members and we look forward to your ideas.

ULI Tampa Bay Program Chair Welcome: Lyle Fogarty, Managing Partner, Clover Investment Properties

• ULI will continue to provide virtual opportunities for members to connect, including by doing smaller forums for you to share and learn.
• Let ULI know what ideas you have by e-mailing [email protected]

Town Hall Takeaways

Todd Fultz, Managing Director, Plaza Construction

• Construction sites are currently up and running.
• Experiencing a 10 to 20% reduction of workers on site
• Learning from the experiences of colleagues in New York City and Miami, who are currently dealing with different circumstances
• Implemented new protocols on job sites, including social distancing, hand washing stations and hand sanitizer throughout. Management is working from home and the numbers of people on site are limited.

Scott Campbell, Managing Partner, Lerner Real Estate Advisors

Insights into the homebuilding industry response:

• The National Association of Homebuilding (NAHB) has worked hard to effectuate some stimulus measures including providing liquidity for the mortgage industry. That is important given what happened in 2008.
• Residential construction is currently considered an essential service in most places, which means where there is a ‘stay in place’ order, residential construction can still happen. Includes Tampa Bay.
• In Tampa Bay, homebuilders have closed sales centers. Amenity complexes have closed.
• Sales volumes and traffic volumes were down 50% last week. Web traffic has remained stable with people searching from home.
• Inspections continue, but not as efficiently. Inspectors are asking for homes to be vacated by trades before inspecting.
• New methods introduced for closings including that title companies will meet you at your car.
• Out of state closings have been more challenging given social distancing. In Tampa Bay, up to 1/3 of closings are out of state buyers, such as in the active adult market and job transplants.

Lauren Campbell, Operations Manager, Eastman Equity

• Eastman Equity focuses primarily on retail and hospitality in the urban infill area known as the Edge District on Central Avenue in St. Petersburg. A walkable location that is becoming denser with about 3500 new units supposed to be delivered in the next year.
• Sales are down significantly so Eastman is currently focused on rental solutions for tenants and being proactive by being communicative and providing resources.
• From a landlord-tenant relationship, reviewing ways to address rent forbearance, lease extensions, postponing April rent and continuing to monitor and respond to circumstances.
• Created the Edge Guide https://edge.guide/ which is teaming up with one local restaurant and one hospital or healthcare provider per day to raise money to provide daily meals for healthcare workers.
• District-wide wifi system in place intended to connect tenants in ways that bolster business throughout a district.
• Retail and restaurant businesses are getting creative, including utilizing digital opportunities in innovative ways. We’ll likely see some of these new strategies stick around for the future.
• (See sample communications to tenants at the bottom of this document. Lease contract addendum attached.)

Lucia Garsys, Deputy County Administrator, Hillsborough County

• County continues to deliver services, including intake of applications, processing, and inspecting.
• Investigating new ways to conduct meetings to approve certain applications where a public hearing is required.
• Some jurisdictions such as the City of Tampa and Pasco County are ahead of the curve from a technological perspective with electronic permitting systems in place.
• Over the counter interactions are limited, relying on e-mail or phone. Inability to do face to face counseling mostly impacts those seeking smaller permits, such as the individual homeowner
• Work continues on a review of the bigger applications.
• Field and inspections are a real challenge; some delays may be experienced.
• Everyone is committed. Recognize construction is an essential service and will be critical for the economic building that comes out of this.

Christopher Brewer, Partner, Gardner Brewer Martinez-Monfort

• Force majeure clauses are being reviewed and analyzed.
• Lessons from 2008 are instructive. Observing a different attitude and approach. There is a more of a collaborative, reasonable and ‘we’re all in this together’ spirit with respect to conversations between landlords and tenants, lenders, etc.
• The Court system is not an efficient means to resolve complex legal disputes. The court system will suffer a backlog because much of it is shut down.
• Many waiting on details of a Stimulus package to see what that will mean for landlords and tenants. We’ll see more decisions with respect to rent forbearance and forgiveness then.
• Many development projects are on pause because it’s difficult to move forward given social distancing. Hillsborough County has been responsive.
• Lender composition has changed from 2008. Lone forbearance conversations with an institutional bank is different from a discussion with a life company, viewed more as a debt partner. That’s because banks are subject to greater scrutiny under federal and state regulations including Dodd-Frank and FDIC.
• Encouraging businesses to file insurance claims for business interruption even though there is some uncertainty about coverage. Better to file and start the process, than not to.

Julia Silva Rettig, Managing Director, Capital Markets, JLL

• JLL is a global company with 90,000 employees. Currently focused on the health and safety of staff and clients, including providing resources on stress management, anxiety and training.
• Encourages good communication and using the opportunity to connect in different ways.
• Continually monitoring the highly fluid markets at the national, regional, state and local levels.
• Hospitality and retail hit the hardest
• Industrial is likely to take the least brunt of the impact. Anything Amazon is hot right now and they continue to close deals, look for more sites. E-commerce and anything ‘last mile’ will recover quicker. Small bay users might get disrupted a little bit and bigger users will be taking some of that space
• Innovate and do things differently such as virtual touring and drone videos, drive around and look at properties from the safety of your car. Keep communicating.

Michael Phillips, Chief Executive Officer, Loci Capital  

• Loci has a diversified portfolio including hospitality, marinas, storage, apartments, office buildings, shopping centers.
• The first step included a focus on the protection of staff and customers and the introduction of methods for improving hygiene and sanitation.
• The second step has been reviewing revenue and operations. Hotels have experienced a major drop in revenue. Some are down 60% and others are entirely shut down. Focused on strategies for continuing to pay personnel and staff. Paying attention to the stimulus bill and having conversations with lenders.
• The third step is a financial review across all asset classes and communication with lenders. Doing an analysis of potential capital needs for 30 days, 90 days, 180 days up to 18 months under different base case and stress case scenarios and ensuring we have cash set aside for each.
• For shopping centers, having conversations with tenants seeking rent relief and taking different strategies for dealing with each request. For instance, a conversation with a small corner bakery is different than one with a big publicly-traded company

Steve Barber, Vice President, Ascentia Development Group

• Developing the Virage Bayshore, a 71-unit luxury condo on Bayshore Boulevard that is weeks away from getting its certificate of occupancy.
• Construction is still ongoing with a reduced workforce of about 20 to 25% less. Some potential impacts on the schedule but they remain optimistic. Stellar response from the City inspection team.
• The next challenge is getting buyers closed. In the luxury apartment, many are traditionally cash buyers. With mortgage rates being low, they have been getting a lot of new requests for mortgages and daily requests for appraisals.
• Encourages a discussion with your insurance broker if required. For active construction, a typical builder’s risk policy won’t likely cover a pandemic. A trigger for a claim is property damage and viral infection is not property damage.
• Environmental policy should be reviewed for potential coverage for decontamination needs.
• Permanent insurance may include sub-limits for decontamination and business interruption.

Bill Eshenbaugh, President, Eshenbaugh Land Company

• Many active land purchases with existing contracts are on pause
• Recommending extensions for closings
• May be an opportunity for disruption from those looking to ‘get into the game’ like in 2008.
• Some big residential developers are halting projects and waiting to make sure there is a market

Additional Resources:

ULI Town Hall – Resources

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