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“The California State Parks camping reservation system has also seen a surge — 97,417 reservations made from Feb. 1-March 11, up from 54,825 during the same period last year, spokesman Jorge Moreno said. During the same period, cancellations dipped from 14,248 to 11,992”
“The amount provided under the PPP is intended to cover 8-weeks of payroll expenses and some additional amounts for making payments towards specific debt obligations”
“Specifically, in response the COVID-19 pandemic, small business owners can also apply for an Economic Injury Disaster Loan advance/grant of up to $10,000. The loan advance/grant will provide economic relief to businesses that are currently experiencing a temporary loss of revenue.”
“The landscape of financing has changed dramatically due to the uncertainty that COVID-19 has brought to all aspects of real estate. Fortunately for MHC’s, Fannie Mae and Freddie Mac have continued funding new loans for acquisitions and refinances, while CMBS has mostly shut down, and banks are mixed on cautiously making new loans or waiting until the situation has improved. Although Q1 of 2020 mainly consisted of a lower rate environment, the last few weeks have experienced turbulent swings on spreads and all-in rates, along with lenders placing floors on the quoted treasuries for pricing interest rates.
As of this week and since the Fed announced their bond-buying stimulus, spreads have come down sharply, and we again see most full leverage Fannie Mae and Freddie Mac loan pricing at 3.25-3.75%, and lower leverage loans around 2.75-3.25%. Along with this, both agencies have announced the requirement of debt-service reserves ranging from 6-18 months, along with adjustments to more conservative underwriting. For existing agency borrowers, mortgage forbearance programs have also been announced, and discussions should be initiated with your servicing contact to execute a forbearance agreement. As we continue through this pandemic situations, we anticipate daily and weekly changes, so we encourage you to reach out to Chris San Jose to discuss your specific situation and receive up-to-date information.” – Chris San Jose – 04/06/2020
“While some tax deadlines have been extended, uncertainty still exists in real estate deferral provisions such as IRC Sec. 1031 exchanges and qualified opportunity funds.”
“As we are saddened by the losses we are hearing and seeing across the country, we realize that “this too shall pass.” There are still many unknowns in this pandemic, but one thing is for sure, Manufactured Housing Communities and RV Resorts are once again proving to be incredibly resilient. With the shared-equity structure unique to our asset class, residents are reluctant to defer payments only to have to catch them up later and jeopardize the equity in their homes. This is a strong reminder of why owners should always ensure the values of their home stock remains strong, so the residents have “skin in the game.” Anecdotally, we estimate that senior properties with primarily fixed-income retirees will be the least affected, while family properties with a working resident base will be the most affected. The most challenged communities will likely be park-owned rental communities. Delinquencies will probably range from mid-single digits to high teens, depending on the type of community.
If we zoom out a little farther, while the country should start to re-open within two billing cycles, the pandemic will leave economic impacts in other industries that last much longer. In a year from now, we will be back to our 99.5% collectable rents, several available financing options, and likely still very low-interest rates. We then expect even more demand, for our finite asset class, because we are a safe harbor for money in even the worst-case scenario. Additionally, both MH and RV properties naturally solve a significant problem that traditional multi-family housing is experiencing, density. With no shared elevators for residents or guests to be concerned about, social distancing can be practiced much easier in a time of need.
Clearly, there will be individual RV resorts that will be more affected than others; however, since we are in the “shoulder season,” after the traditional snowbird season, and before the prime summer get-away season, most RV operators have not suffered huge losses so far. Many of these RV resorts also serve a significant number of “essential workers” or even act as long-term affordable housing.
Yale Realty Advisors is cautiously optimistic, and this is re-enforced by the aggressive offers we are fielding right now from buyers that remain bullish. We have also seen syndicators raise tens of millions in the last few weeks, and billion-dollar capital allocators tell us they are looking to increase their allocations in our asset class.”
– James Cook 04/06/2020