Greetings from quarantine fellow CRE monkeys. Work at a small to mid-sized regional developer and suspect that if this thing goes on for another 6-8 weeks, I will probably be let go as I don't think my company will be able to cover overhead for more than 2 months with construction (dev fees) stopping. Hear of anyone being let go yet? Worried yourself?
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One of our sponsors had to cut everyones salary by 20% and lay off a few people. They mostly develop workforce housing. So freezing building and worried about renters not paying rent.
Heard a very similar story from a big hotel brand. Permanent salary cuts across the board - larger for higher ups.
A buddy at Topgolf says nearly everyone in corporate is furloughed or just getting half-pay with a skeleton crew.
He is/was on the development team
I know a couple firms that are currently in a wait and see phase. Another two weeks of this, and layoffs will begin. My firm has already floated everyone has to either take a pay cut next week or some people will be laid off.
What kind of firm do you work for?
Never been gladder to be in restructuring. I suspect there will be significant lay-offs in IB if this goes on much longer, as COVID has caused the brakes to be slammed on virtually all current M&A processes. 95% of my bank is pencils down on everything right now.
I've heard of two sponsors that have fired folks on the construction side already.
My job is good, but unfortunately many of my friends working not finance jobs have been let go. Anyone I know who is a server or anything with food or hotels has been let go, I have heard a few smaller companies with 50 people or less have let go of nearly everyone. Started to hear about bigger companies about to do it now
That really sucks, sorry to hear that. But this too shall pass, and there will be opportunities in the future.
Is this a thing? The idea that developers are living essentially paycheck to paycheck? Especially if you're beyond the startup phase...
It is sadly. One of the issues is that we just significantly scaled up in the second half of 2019 so we have a ton of fixed overhead that would've been covered by increased future development (not going to happen anymore). At first us juniors were excited because we thought this was going to be an awesome opportunistic period, but tone from up on high has changed so drastically over the past 24 hrs.
Ah, got it. Generally I would think that size developer you're working for would be the best positioned; large enough to have accumulated some cash reserves, not so large that the overhead will burn through it too quickly. Guess having recent plans for expansion hurts.
Best of luck! Maybe with a bit of good fortune you land somewhere that is well-placed to take advantage of what is certain to be a pretty roiled market over the next year or so
To date, my firm’s messaging has been “people are going to need apartments when this is over and we’re going to build them.” Two VPs left voluntarily for other ventures though (what a weird time to make that move...) so the company’s salary overhead number just got cut by probably $300,000-$400,000 from only that, helping things a bit.
I’ve personally seen mixed messages from two large firms I was interviewing with or being recruited to prior to all of this. One suspending hiring indefinitely, while the other is moving forward and is switching to video interviews.
It’s still probably too early to make predictions on either.
Working for one of the large brokerages and they've told us they are not doing any layoffs at this point in time. There is a hiring freeze on support staff, although those that have signed offers to start in the future are still being brought on at a later date. Will update if this changes.
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