According to the Daily Business Review, commercial real estate lending has halted as lenders and borrowers re-focus on existing debt with defaults and forbearance on the horizon.
Because of the uncertainty caused by COVID-19 in industries ranging from hospitality to commercial real estate, banks and alternative lenders alike are wary of issuing new debt.
Bowman Brown, Chairman of Shutts & Bowen’s Executive Committee and Chair of the firm’s Financial Services practice group, described how banks will be very careful with extending new credit to existing clients, including industrial and retail clients.
“It’s clear that the economy in Florida is going to be impacted negatively because Florida is so focused on tourism and entertainment,” he said. “They are going to be very concerned about the health of their borrowers, so I don’t think they are going to want to lend aggressively to anybody.”
The article also states that experts expect he coronavirus economic cliff to be more severe than the Great Recession and September 11.
“The economy is going to be heavily impacted,” added Bowman. “I think there will be unfortunately a high unemployment rate. That will impact consumer spending and that will flow through to retail.”
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About Bowman Brown
Bowman Brown is Chairman of the Executive Committee and the Financial Services Practice Group of Shutts & Bowen LLP. Bowman has served as Chairman of The Florida Bank Banking Law & Credit Regulation Committee and as General Counsel and member of the Executive Committee of the Florida International Bankers Association, Inc. Bowman has served two three-year terms as a member of the Association of the Bar of the City of New York Banking Law Committee and as a Trustee of the Pan American Development Foundation, a Washington, D.C.-based affiliate of the Organization of the American States.