 Hey everyone, this is the second episode in our special coverage during the coronavirus pandemic where we aim to offer advice to all entrepreneurs on how to weather the storm that is this epidemic. In our first episode, we touched on ways to stay productive during the quarantine. This episode will cover real estate topics concerning both landlords and tenants, the impact on the construction industry, and the legal obligations of preventing the spread of coronavirus as a landlord. From all of us at Startup and Storefront, we hope you're keeping your spirits up and we thank you for being a part of this wonderful community of entrepreneurs. Now, on to the episode. All right, guys, welcome to the podcast. It's a weird time with COVID-19 coronavirus. As you guys might know, I'm a real estate developer and so we wanted to just address some quick questions around how this is impacting the real estate market, both on the commercial side and the other side. One quick story. Nick's landlord is offering to help him out a little bit. Won't you tell everybody real quick? I've been living in my place for about five years now. I've always had a good relationship with my landlord. So yesterday, they reached out to me because they know that I'm in the entertainment industry. I'm very much part of the gig economy as well as my brother. So they knew that we were likely to be part of the demographic affected by this quarantine and the closing down of all the area restaurants and whatnot. So they reached out to us and said, hey, we know this is likely to be a hard time for you. Let us know if we can do anything to help you out in terms of developing a short-term payment deferral for your rent. At this time, to be completely honest, I don't know how badly this will affect me. There's no doubt that it will affect me, but I don't know how badly. So I wrote back to them and said, thank you so much. This really means a lot. This eases any fear that I had of being able to make payments on my rent or whatnot. I don't know if I'll need a short term payment deferral or anything like that. But if I do, it is nice to know that that option is on the table. It is all the safety net that I need, just knowing that it's there. There's a law from here local to LA, Shepard Mullen. They released an email that went out to everyone on the real estate list and I just wanted to go through some quick Q&A. And so one of the ones is if I'm a multifamily owner and a tenant lets us know that they have tested positive for coronavirus, what do we do? And so at a quick high level, let everybody know in the building, that's for sure. There's really nothing legally that people can do, but you have to at least disclose the information to everybody. Ideally, the ownership or the management group has some sort of plan. And so whether that's obviously just letting everybody, I think the CDC is doing a good job, but basically it rolls down to let everyone know to wash their hands, stay six feet away, social distancing. I think all that remains for sure. The landlords do have an obligation to notify all the other tenants and occupants of the building and that at least there's a risk. So that's number one question. I know that I should do extra and consistent cleaning of all common areas in my project, but do I need to do extra cleaning? The answer is no. And so you just need to clean the common areas of your building of your asset, but you do not need to do any cleaning for your tenants yourself. The most interesting question I think is do the tenants have a right to stop paying their rent because of the virus? The legal question is no, but I think this has major implications for what happens in the future. I think the government has a role here. I think you're going to start to see leases that have some sort of clause around a pandemic. And when that happens, what do we do? But at the end of the day, I think this affects landlords and tenants alike. Hopefully the government can work this out in the future. But if you're a lawyer, please do not be alarmed in the future if you start to see certain clauses around pandemics and what we can do. I think insurance companies reach out. If you're a tenant, reach out to your insurance company. Obviously this impacts your revenue in a real way, much like a natural disaster. I don't know if pandemics fit, but that's something that for sure you need to be aware of. One of the other questions posed in this document is the obligation to screen visitors in the lobby by scanning temperatures. So the answer is no, not yet. You don't have to do that. I've seen the videos that are up where I think in China or parts of Hong Kong, if someone's walking in and they literally have what looks like a cashier's device to scan a barcode. The food thermometer. And they put it on someone's forehead to see if they have a fever. And if not, they're allowed inside. In America, nothing yet, not legally. There's no required steps to do that. But as everyone knows, it's a it's an ongoing battle. I think again, everyone's just focusing on cleaning. If you've tested positive, let everybody know, let your tenants know, let your occupants know, and then just follow the state, county and city guidelines for all of this. If you've been following the news lately, you've seen that the Fed has made several drastic cuts to the interest rates over the past few days. What does that mean for real estate developers in the long term and the short term? In the short term, I mean, we're in escrow on two properties here in Los Angeles. I hate to say the good news, but one positive thing that has come out of this is because the Fed announces 0%. It's looking like we can get, we can close with rates in the twos, maybe even the low twos, which is just insane. And so money is really cheap right now. I think the government is trying to create incentive for people to invest their money in real estate. And so if you're in the market, this is a good time to potentially move forward on an asset that you might have been holding off on just because it is so cheap to borrow money at a high level going back to the tenant situation. If you're a tenant and you've now been forced to close for two, three weeks, the foreseeable future, you have a bunch of employees, the SBA. So if you guys go to SBA.gov, there is a program in place where they're going to try to give immediately up to $2 million to the business, obviously they're going to have to review your financials, but to help keep you afloat. And so to ideally keep your employees on staff, give them some sort of money, the government also announced they're going to give people $1,000 checks. We'll see what that's via a tax rebate or when they file their taxes, they get something just to give people lift for a little bit. But yeah, if you're a business owner, head over to SBA.gov. There's a number of things you can do to just keep your salaried employees afloat during this time. There's emergency funding in place. And obviously they know the situation. And so they are trying to get these approvals done in a matter of days or at least one to two weeks, not months, because they know everybody needs it. So ideally we'd have Natalia here to answer this because it directly affects her, but since she's not, what can you tell us about how this will affect the construction industry? So you were telling me earlier that she was getting a lot of questions from her employees about whether their projects would continue on. What does this mean for the construction industry and how can they move forward in this time? Twofold. So if you're a construction company, really two options, I think that we've seen happening. One, if you're in the office, you're working from home. And so if you're just in office staff, like accountants, engineers, some people that just sit behind the desk, but indoors, those people are working from home. For all like the tradespeople, because they're outside, technically on a job site, the rules are kind of nebulous. They're kind of up in the air. People don't know what to do. And so they're kind of using the rule of thumb all as long as there's 50 people or less. Or if it's now the rules, 10 people are less. And so I think they're just practicing social distancing. But it's weird because the office is obviously working from home. And so they're kind of in the situation where they want to keep working because that's how they make money. But at the same time, the government actually hasn't given any warning around construction sites. And so people are just going, they're continuing to show up to work. The one thing that is interesting is if you're, if you have drawings or you're, you're building is with the plan checkers or the planners at your city hall, a lot of the plan checkers are doing everything over the phone. And so they're checking your drawings from a conference call. And then it's your job to drop off the drawings. See, after you call, you call, you make the required changes, you drop the drawings off, they take them, they stamp them, they put them back in a pickup drop off area, and then you pick them up. And so I think city hall, obviously planners, they're doing the best they can to try to make sure they're not slowing down every construction project. But again, the situation is like minute to minute, hour by hour, but that's the state of it right now. So if you're in construction, you're probably good for now. Hopefully they don't slow it down. So just a quick recap, rates are super low, which is great if you're looking to invest in real estate. If you are an owner or a landlord, you have to disclose anyone who you know who might have the disease to all of your tenants, continue to monitor to use the CDC, go to Hopkins education. And if you are a landlord with tenants, maybe now is a good time to reach out to them and offer deferred payment plans in the short term, if they are experiencing hardship. Yeah, I think it's a weird time. And so I think having that conversation, if you're a tenant, ask your landlord, if you're a landlord, try to think of creative strategies to potentially help your tenants because as you guys know, we're kind of in this together. You don't want your tenant running out of cash and being stressed out that's going to help or not help, it's going to hurt them and eventually they'll fail. And if you're a landlord, you're really reliant on that cash, on that tenant doing well. And so there's a symbiotic relationship there. And so I think if we can really approach it that way during this time, it's a big win. Another thing that can help the economy is just investing in these assets. So if you've been on the fence for a while, now is the time, rates are super low, and we'll continue to drop as the year progresses. And if you're a small business, go to sba.org, try to find any sort of cash infusion to keep your crews, your employees, your staff involved in whatever way you can. Even donations, like even if you're donating your products, your food, even beer, whatever it is that you're creating, if you can donate that to a useful cause, I think that's important. Absolutely. All right. Be safe out there, guys. Take care of each other. We'll get through this together. The star of the store front team consists of Diego Torres Palma, Natalia Cappellini, Megan Conrad, Haley Nielsen, and me, Nick Conrad. We've got more episodes that we're going to be putting out in the near future, so if you aren't already, consider subscribing. This is a very supportive and helpful community of entrepreneurs, and we'd love for you to be a part of it. We'd also love to hear how you're all coping with this epidemic. So reach out to us on all the social media platforms at star of the store front, and you can always go back and listen to any of the interviews we've done. They're available wherever you get your podcasts and on our website, startupdestorefront.com. Thank you for listening. We'll see you next time.