For commercial property owners, the rent collection issues areonly beginning. Lawyer Mark Leverette expectscommercial tenants will have payment issues through the end of theyear, at least. If a second wave of the pandemic hits, it could belonger.

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"Considering the impact that we have experienced in the economyso far, it is expected that most acute and evident rent issues willaffect most business for the remainder of the year," Leverette ofBPM LLP, tells GlobeSt.com. "If there isa second wave of the virus, including another quarantine lockdown,the problem could extent through 2021. The "Wildcard" is the effectof an economic downturn, and that will be an industry-by-industryanalysis suited for a well-versed economist."

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Future rent collection trends will largely depend on the comfortof consumers. If consumers return to shops immediately, rentcollection problems will also recovery quickly. "Much of theability to rebound will be micro economy based and related to thereturning foot traffic," says Leverette. "All property types andthe related tenant business forecasts will require insightfulfinancial analysis and an overlay of an economic forecast."

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Government rent relief initiatives have focused on apartmentrenters rather than commercial renters. "Government relief programsto help tenants and landlords deal with eviction issues appear tobe fairly one-sided at this time, as the tenants are receivingsignificantly more protections," says Leverette. "Most of theseprograms have automatic provisions to allow for payment deferralsfrom tenants; however, compliance documentation needs to beprovided and/or tracked.  Programs are different based onyour specific jurisdiction."

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Eviction moratoriums for commercial tenants have been the onlyprotection for commercial tenants, but simultaneously, thesemoratoriums place a burden on the landlord and simply rack up rentbills for the tenants. Markets throughout the State of Californiahave implemented commercial eviction moratoriums, and at the statelevel, there was some legislation aimed at helping tenants,although it continued to place the burden on landlords. "Althoughrecently failing to be approved, SB 939 would have instituted astate-wide moratorium on the eviction of commercial tenants whohave been adversely affected by the COVID-19 pandemic, and providedstrict timelines on renegotiations to protect tenants."

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Throughout the process, most legal experts have encouragedlandlords to negotiate terms with tenants to defer or forgive rentpayments as possible. "It should be noted that landlords are alwaysincentivized to sit at the table to renegotiate the best outcomefor the parties, as both parties stand to lose if the tenant movesout," adds Leverette. This law was widely opposed by many groups,but there is still a likelihood that a similar law may be broughtback to our legislature."

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.