Desperate times call for desperate measures.
With 16 construction projects in progress, Pennrose, a Philadelphia-based apartment developer, is getting creative to get its deals over the finish line as COVID-19 has shut down many parts of daily life.
“For our deals that are under construction, we’re getting inspectors to do FaceTime,” says Mark H. Dambly, president of Pennrose. “I think there’s this incredible inertia that’s going on in the country, where folks are doing whatever they can to facilitate progress and efficiency.”
Dambly says Pennrose and land sellers are also getting creative. “I was on a call for three hours for a deal we’re moving towards closing in Cleveland,” he says. “We all did it on Skype. Just to hear the collaboration between the individuals on this call, who were just really focused on resolving issues and getting it done, was great.” Some hurdles aren’t so easy to overcome with video conferencing. Dambly says he had a property that was going to hit the market a couple of weeks ago, but he pulled it back. “The offering was all ready,” he says. “Nobody is doing tours. Also, folks are going to want to see how things shake out over some time.”
Right now, Pennrose isn’t selling anything. “We’re not big sellers anyway,” Dambly says.
In some ways, buying land makes closing deals more likely in this environment since it’s a lot easier to perform due diligence on a piece of dirt than an apartment property.
“We are continuing to move one deal towards closing,” Dambly says. “Our investors and lenders are still processing deals.”
Being in affordable housing is also helping Dambly close deals. “Most of the deals we’re closing are government-subsidized deals, so the rent is more predictable,” he says. “I think if we can count on anything, we’re going to be able to get the federal subsidies. So the deals we closed recently are all 100% subsidized deals. Folks are reasonably comfortable with the market and the revenue streams there.”
While the situation caused by coronavirus and stay-at-home orders isn’t ideal, Dambly sees some efficiencies coming out of it. “I think people are going to trim down,” he says. “I think that technology will become more prevalent and there will be opportunities here and I think. We’ll get through it, and things will shake out. But it will be different when we come out on the back end.”