Commercial Lenders Turn to Evaluation Providers as Property Values Decline During the Covid-19 Pandemic
By Gary Kasper, President at New Vista Solutions
Commercial real estate has been hit hard by the coronavirus-related economic shutdown, and commercial property owners are feeling the pain in their pocketbook. Retail centers and hotels have taken the brunt so far, but the effects of this pandemic can be felt throughout the commercial real estate sector as property values decline. Recovery is inevitable, but the timing is uncertain.
In April, NAIOP, the Commercial Real Estate Development Association (formerly known as the National Association of Industrial and Office Properties), predicted the pandemic would have a significant short-term impact on the commercial real estate industry but could lead to long-term growth, especially in the industrial and warehouse sector.
In a recent webinar, Dr. Timothy Savage of New York University, a research economist for NAIOP, offered his thoughts regarding the demand for commercial property in a post-pandemic economy. "Commercial Real Estate was faced with technological disruption before this crisis," Savage said. "This crisis is more of a natural disaster than a financial crisis; the significance of which is that on the other side of it, the fundamentals will be the same, they have just been moved further along the continuum."
Savage went on to say he believes retail brick and mortar property will decrease in demand and market value, especially small and independently owned business space. The hospitality sector will bounce back quickly as consumers begin to travel again, and demand for office space will most likely move toward less square footage and short-term leases as a result of more employees working from home.
As businesses began to close over the past few months and the flow of rental income became inconsistent, many landlords fell behind on mortgage payments. Commercial lenders and portfolio managers are facing a new reality and must pay close attention to the value of current assets and new loan collateral.
Commercial valuation providers have noticed a significant uptick in order volume as commercial lenders and mortgage servicers seek reliable and cost-effective appraisal information.
New Vista Solutions recently introduced an expanded suite of commercial settlement products that includes evaluation alternatives for all commercial lenders. They include basic exterior inspections, market-based interior and exterior evaluations and agricultural land evaluations. Income-based interior and exterior evaluations are also available.
For more information about New Vista’s suite of commercial settlement solutions, watch this video on the NVS YouTube channel: https://www.youtube.com/watch?v=KeqgcXKDTOI
The NVS sales team can be reached at 866-721-9295 or at firstname.lastname@example.org.