We are in the midst of a very unprecedented time and we hope that you and your family are healthy and safe. Many of our investors have inquired about the state of the properties in our portfolio and what effects COVID-19 will have on the investments we’re involved with. This is a special edition of The Harbor Drive Investor to inform all our investors of the steps we are taking at all of our communities to ensure the health and safety of all our staff and residents. We have broken down our actions into two distinct categories as it pertains to this situation: Defensive measures and Offensive measures.
Defensive Measures: Like always, the health and safety of all our onsite staff and residents of our communities is very important to us. Now more than ever, we are taking several defensive measures to ensure that our communities and our residents are safe.
- We have sent several notices to all of our onsite personnel and community residents to encourage everyone on property to practice safe social distancing and proper hygiene. Some of the information and policies we’ve incorporated include conducting property related business with staff via phone and email whenever possible, how to recognize COVID-19 related symptoms, to self-quarantine if you exhibit any of those symptoms, and encouraging residents to pay their rent via our online portals at each community.
- Until further notice, all community events and tenant retention programs have been discontinued in order to prevent group congregation among residents and prospects. Some of these events include community hosted potlucks, movie nights, bingo nights and welcome receptions for new tenants.
- We continue to keep the leasing offices open with modified hours through this pandemic, however we are encouraging staff to stay home from work if they feel any of the COVID-19 related symptoms. We are also limiting office visitation to essential property business.
- Though we are continuing open business hours with our onsite personnel, we have notified tenants and staff that we will only address emergency work orders; such as major plumbing issues or other cases that may cause property damage or life-safety issues. Our maintenance staff will not be going into units to address non-essential work orders until it is safe to do so.
- Our contracted cleaning crews on properties have been instructed to clean and sanitize all community areas used by residents per the guidelines set forth by the CDC and World Health Organization.
- All non-essential amenities within our communities have been closed for use until further notice. These include all fitness centers, business centers, pool and other non-essential outdoor amenities.
- We will continue to notify tenants and onsite staff of all the best practices/safety procedures to follow, as advised by state and federal health officials, in order to help prevent the spread of the virus, ensuring the safety of all residents and staff.
Offensive Measures: Many of our investors have inquired about how COVID-19 will affect the properties and their investment. We want to assure our investing partners that we are taking several aggressive actions to ensure the properties continue to operate successfully during this historic time.
- We are in close daily dialogue with all of our regional property managers and onsite staff to maintain real-time updates regarding each property.
- For the time being, we have postponed all planned unit improvements and capital projects to preserve cash. This includes upgrades to classic units and other planned amenity enhancements.
- Many of the properties in the portfolio have lender held reserve accounts for capital improvements and/or other equity reserves. We’re currently taking steps to release held funds in an effort to further boost our cash reserves, if necessary.
- In order to encourage tenant retention and renewals, we have placed a moratorium on all rental increases on lease renewals until August 2020.
- Along with health and safety notices being circulated among our communities, we are also providing information to residents with a variety of financial assistance resources which are based on property location. These economic resources are local, regional, and national programs and are meant to help those residents that are economically impacted by this crisis.
- Currently, we have only received a few notices from residents that have been financially impacted. We are putting measures of verification in place for those that are these residents. These include verification of employment status and/or other financial hardship that may impact their ability to comply with the economic terms of their lease. Our goal is to discourage any residents that want to take advantage of the situation by intentionally ignoring their financial obligations to the lease that would otherwise have the financial means to comply.
Lastly, as it pertains to future business and investment opportunities, Harbor Drive Holdings is monitoring the commercial and multifamily investment climate very closely. We predict that there will be some short term financial damage and rent defaults affecting many real estate operators. With the debt markets changing their rules almost daily, information on this topic has a very short shelf-life. We predict there will be some amazing investment opportunities in the very near future with loans coming to term for many property owners, and a very volatile lending climate. For the immediate term, we are taking a ‘wait-and-see’ approach and being very cautious when looking at new deals and we are paying very close attention the economic vacancies of prospective investment opportunities. Our feeling is that there will be some kind of market correction however, we are not exactly sure how deep the discounts will be or how long it will take to get there. We know that the market will sort itself out and there will be a new basis by which to value these great opportunities in front of us! We will keep you posted on what we see as we continue to closely monitor the situation.
Please stay healthy and safe out there and as always, Happy Investing!