10,000 tune into Marcus & Millichap coronavirus webcast
Here’s how the coronavirus-caused economic plunge is different from 2008.
The Great Recession hit during a time of economic instability with massive market speculation, falling home prices, and no Fed playbook for recovery. The current crisis befell us during a boom economy. Its duration depends not so much upon declining numbers in the Standard & Poors Index as on increasing numbers of COVID-19 cases and deaths.
This tenet served as the foundation of a live webcast presented on April 2 by Marcus & Millichap, which was attended by more than 10,000 real estate professionals and investors. M&M CEO Hessam Nadji advised them to stay alert and to expect a return to a vibrant economic environment by Q4.
“We’re living in an incredibly uncertain time. The numbers are very, very confusing. Thing’s we’ve never seen before. But what is being done to counter this situation is also unprecedented,” Nadji said.
M&M research chief John Chang said the CARES act was the largest stimulus package in United States history, and not something seen in 2008.
“They’re going to be adding up to $600 per week to unemployment checks. People will have $3,000 a month to cover their expenses, and this will be in place for 13 weeks,” Chang said. “There will also be $350 billion to help small businesses cover payroll and rent.”
That could help smaller specialty retailers to stay alive malls and centers. As for strong national chains, deals are still getting done, said Scott Holmes, president of the retail sector at M&M.
“The deals are still moving forward for necessity-based retailers. Deals for Kroger, Dollar General, Chick-fil-A, McDonalds, those are still getting done,” said Holmes, who noted that investors looking for good deals on distressed properties are likely to be disappointed.
“There aren’t that many available because most people are looking at this as a short-term phenomenon,” Holmes said.
Nadji said he expected unemployment filings to increase in the second quarter, and some recovery to take hold in Q3.
“You can’t make too many assumptions on the health front, but my personal expectation is for recovery to ensue in the fourth quarter thanks to the stimulus packages,” he said. “There will be small businesses that will be hurt and won’t be able to come back, but people will be going back to centers and restaurants—to more normal behavior. I think pent-up demand will be huge.”