It's like 2008 again overnight

Many businesses and consumers are becoming subprime credits as the money multiplier grinds to a halt. No credit model allows for 100% of one's customers to disappear, within the same week, across geographies.

The longer the quarantine continues, the more distressed certain CRE markets will become. Landlords are in an unprecedented position: Historically you could evict a nonperforming tenant, and someone else would take their place, but for now, all potential lessors of a restaurant/gym/retails space have little to no revenue. So would you rather forgive / PIK rent for some period and hope your tenant returns post virus, or bankrupt and evict your tenant, and wait until the crisis is over and then hope to rent your box likely at a much lower rate, if at all?

For retail landlords, it appears you'd lose either way, so why not leave the tenant in the box with rent relief and keep the call option they come back? And if you're levered, you can seek refinancing / forgiveness from your bank. No easy answer The longer the length of quarantine, a) the lower fatalities, offset by b) the greater the destruction of small businesses, which will bankrupt and not recover for a long time hashtag#privateequity hashtag#executivecoaching hashtag#investmentbanking hashtag#investing