Detroit October 2020 – Key Takeaways

• Everyone in attendance was happy to report that they are staying busy with work. 
• Medical and healthcare deals are still moving as doctor’s need for space is now magnified.  
• David Hart is starting to receive cases dealing with tenants and landlords as tenants are not paying rent.  They have been claiming “Frustration of Purpose”.   Many of the tenants are leveraging the pandemic in order to not pay their rent.  
• A lot of competing banks are sitting on the sidelines.  Large banks are telling their customers that they cannot help them with the PPP forgiveness. The State Bank has been very busy with their customers and have adopted a wait-and-see posture for forgiveness of PPP loans.  The magic number seems to be $150,000 loan, which might be forgiven.  Anything over that, they will expect payback, but they are waiting to see.
• SBA has 90 days once they receive a request for forgiveness.  The deadline for the application for forgiveness might be the end of this year.  Virus trajectory will dictate loan forgiveness.
• Johanna Pelon of Interior Environments has been meeting with business owners discussing steps to take in preparation  for the return to the office environment. 
• Guest Speaker Jonathan Chapin of CoStar Group indicated that the pace of the recovery will take another 16 months and is complicated by the double whammy of the pandemic recession and the traditional recession that is piggy-backing it.
• There is a slow down in the economy that is ongoing.  Office market is not expected to fully recover.  Detroit manufacturing is doing very well in recovery.
• Growth of new office space construction was experiencing a massive increase in the Detroit area prior to the pandemic.  Now it looks like there is too much office space as companies may not need as much anymore as they are going out of business or downsizing or choosing to maintain a work-at-home style.  As a result, the office market has pretty much collapsed.  When nobody can get in to see a property, they are not going to buy it.