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How our firm faced the COVID Challenge

Covid Challenges

How our firm faced the COVID Challenge

“…We decided we would not be led by market conditions. We would lead through market conditions…”

What do you do when the government shuts down virtually all of your tenants at your centers across all states? Read how our team responded to the crisis and saw amazing results.

Over the years, I’ve been teased by my peers for my tendency to think of and underwrite some of the most dire scenarios. So much so, that a client once jokingly gifted me an ice pick since I liked to “poke holes in all of his deals”. However, if you had described this years’ events to anyone in our industry, we all would have laughed at the absurdity of such a far-fetched doomsday scenario. No one put total global shutdown in their spreadsheets, not even me.

In the first week of March, it was reported that the citizens, quarantined on a local military base after returning from China, had been released into our city. One of those released later tested positive, but not until after visiting our local mall. I joked with our property management team that day “At least we don’t manage that mall! Can you imagine getting the call you suddenly have to shut down your property by orders of the CDC?”. The team laughed. Some of us even showed support to the mall by eating lunch when it reopened to express solidarity with the retail industry.

My comments to the team seem ironic now. Just two weeks later, not just one, but all of our centers were almost entirely shut down by the government in all states. Tenants, investors, vendors, and lenders and even other property management firms, called in wanting to know what our plan of action was. For almost two weeks, my phone showed I averaged 5 hours on phone calls each day. Some of our property managers spent even more time on the phone.

While our property managers, which each average 20 years experience, have seen a few things, this was unprecedented and clients wanted to know what they needed to do. It is our mission as a company to always be proactive, even in uncertain times, so we quickly developed a plan on how to gain control in an uncontrollable environment.

We decided we would not be led by market conditions. We would lead through market conditions.

How we went about that is what I want to share with you. Not to boast, although I am immensely proud of our team, but because it provides us with a framework for what works when the next unimaginable event occurs.


In the midst of a confusing landscape without good visibility, the first thing we needed was to obtain accurate information in a timely manner and distribute it to those looking to us for leadership. Our clients needed a clear map to navigate the environment. Rapidly changing government regulations, rumors and suggestions on protocol were everywhere wasting valuable time and resources. E-mail would not suffice as the information was changing by the hour. Much of the information available was incorrect or outdated. In the evening of Tuesday, March 17th, We decided on a website as the most effective means to accomplish this. Our team began assembling and vetting and confirming the accuracy of multiple resources and information sites and assembling them in one central location. It contained links to apps for assisting retailers and restaurants with delivery of products and services, steps on how to integrate carry out into a point of sale system, employment laws, and resources and updates on government programs. We opted not to brand the website as a Foresite project because we felt the information was valuable and needed to be shared by everyone, including our competitors. Our investment sales, leasing, and property management teams worked together around the clock and just three days later it was ready. By March 20th was live and shared with all of our tenants and the brokerage community.

In addition to this, our team members began organizing and virtually meeting with peer groups of industry professionals each week to share changes, and gain market knowledge on collections, shut downs, tax deadlines, lender relief, etc. that we could then share with our property owners to ensure they were getting the info and services they needed.


We live in an environment with unlimited forms of communication, however it became clear that the most valuable information was coming from the tenants themselves. How do you establish a delivery system with your point of sale system? Can I do home visits? How do I offer delivery? How can I meet payroll? The small business community inspired us with their innovation and tenacity as they answered these questions for themselves and others. Rather than act as an intermediary between these business owners, we decided to put them all together in one room, virtually. We created a private Facebook group for owners of retail businesses which allowed them to share ideas and solutions with each other. In this group, our tenants connected and innovated and problem solved while fighting to keep their businesses together. Seeing these conversations reminded our team of what we were fighting for and gave us a sense of purpose.


We received multiple requests for rent relief and at the same time, landlords were looking for relief from their obligations so they could assist the tenants. We were in the middle. Our property management team had to create systems and steps to stay on top of the hundreds of calls and emails. We began tracking requests in a central system documenting the request, the amount, and what actions the tenant was taking to continue generating revenue. This proved valuable to quickly present to the landlords and lenders who were also calling asking for updates. Around this time we received notice regarding the availability of the PPP program so we notified all of the tenants of our expectation that they should first seek relief in the form of this program and we would accept their applications for PPP as the same application for rent relief requests in order to limit paperwork. It also encouraged the tenants to indeed seek this program which was intended for rent.


Each business, each tenant, each landlord and lender had different sets of obligations and commitments making it a challenge to create a simple formula for relief. The team had to use the information we had gathered to ensure the tenants were doing everything they could on their end while working towards solutions with lenders and owners. While some landlords had a great deal of flexibility and could be quite generous, most could not. For most landlords, we recommended they not commit to long term lease modifications and rather focused on weekly or 30 day plans to be renewed as needed. We prepared the properties and services for reduced expenses to offset the anticipated lower income and security concerns while most tenants shut their doors.


We could continue to address the problems as they arose but the challenges continued to grow the longer the shut down continued. In addition, our tenants faced backlash at each solution they came up with. Was the take out safe enough? Why can’t stylists visit a customer at home? Who is considered an essential business? Through calls and emails with state and federal representatives as well as local municipalities, we made sure that our tenants were being heard and that legislators understood the implications of the decision they were making. In addition, we felt that the community in their state of fear and concern for the virus, was unaware of the long term implications of a shutdown. We contracted with a marketing agency to create an advertising campaign explaining to consumers the important role that small businesses play in funding education, police, healthcare, and other emergency services. View and share How Small Businesses Support Essential Services here.


We are in mid June at the time of writing this, and the long term implications of shutting down our entire industry for three months are still to be determined. However we are seeing signs of life. Tenants are reporting an uptick in sales as opening restrictions are relaxed, some are even enjoying the fruits of some pent up demand. As for our team and our clients’ properties? No late mortgages, no late payables, and rent collections for May were equal to those in March (Pre-Covid). We even saw leases signed during the shut down and while it is still early, none of our tenants have had to permanently shut their doors. In the end, that is what we were all fighting for. View and share Foresite’s Tenant Tribute here.

While I believe our team did an amazing job working through these challenges even while balancing a new work from home reality and managing homeschooling for their children, the credit goes to those our industry serves, the small businesses owners. These brave entrepreneurs have taught us all a lesson in innovation and tenacity these past few months and we look forward to working with them in the years to come.

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About the Author
Bethany Babcock founded Foresite Commercial Real Estate in 2014 after more than a decade in commercial real estate. She has worked in leasing, management and investment sales and brings her experiences from each of those disciplines to better serve her clients. She was named one of San Antonio's 40 under 40 in 2018 by the San Antonio Business Journal.

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