Wine & Beer in Colorado grocery stores, Big changes to CO liquor laws on ballot and impact on real estate
Colorado is an odd state, prior to a few years ago, you were unable to…
Wow, what a crazy time we are in. Less than a month ago, I was at Copper Mountain when the Governor announced the closure of all ski resorts. Shortly thereafter, kids were running around the house with schools closed and most businesses were shuttered or working remotely & the economy was upside down. Does the pandemic feel familiar with another recent crisis? What does this mean for Colorado real estate? The ferocity of the economic shut down from the Coronavirus in Colorado is unprecedented.
Short Term impacts:
The ferocity of the economic shut down from the Coronavirus in Colorado is unprecedented, but it is important to note that there will be both short- and long-term impacts from the pandemic. In the short term, everyone that owns property will be impacted negatively. Real estate like the rest of the economy is intertwined so a hiccup along the line ripples through like a wave in the ocean. Currently there is a cash flow issue for most of the economy. Businesses are closed, employees are laid off or furloughed and cash is tight. Commercial tenants are not able to pay as they have no income from operations, their employees are unable to pay their rent, visitors are not coming to hotels, etc… Nobody can escape the pain in real estate, not even the medical sector.
With the Coronavirus, one would expect medical to be thriving, but just the opposite is occurring. Other than hospitals, many offices have been shuttered from dental offices, surgery centers, optometrists, etc… Long and short the next 90 days are tough for everyone in the economy including all property owners.
Long term impacts of the Coronavirus on Colorado Real estate:
Fortunately, the short-term issues should resolve with the economy opening back open to some extent in the next 60 days or so as the virus wanes. The real question is how will the pandemic rapidly change the Colorado real estate landscape in the future. To highlight the changes, I’m going to discuss some key property groups.
It is important to remember that the sky is not falling. Colorado is a diverse and strong state economically and will remain a desirable place to live and work. This will allow many of the properties that might be “losers” initially from the virus to be repurposed and turned into winners with some creative thinking.
Mark Twain fortuitously stated that “history does not repeat, but rhymes”. When the pandemic first hit, the rhyme that came to mind was 2008 when the markets cratered leading us into the deepest recession in recent memory. Fortunately, today’s economy is much more stable before the pandemic than in 2007 with endless credit. This will make the recent crisis considerably less destructive than the last one. The coronavirus pandemic will initially feel familiar and rhyme, but will not repeat the 2008 debacle.
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Written by Glen Weinberg, COO/ VP Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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