The coronavirus pandemic should not be used as a reason for everybody to stop paying rent, the CEO of one of the nation’s largest real estate developers told CNBC on Monday.
“It’s a whole ecosystem. The people that can pay need to pay,” Related Companies’Jeff Blau said in a “Squawk Box” interview. “Landlords need to help out those that can’t, and then the banks need to help out those landlords that are hurt by people that couldn’t pay the rent.”
“That’s how this whole thing I think has to get resolved,” added Blau.
Blau’s firm has a portfolio value of more than $60 billion and is behind projects such as New York’s Hudson Yards. It also owns the largest private portfolio of affordable housing in the U.S., with properties in 24 states.
Blau said Related Companies’ has collected about 88% of its residential rents that were due April 1. About 95% of commercial rents were paid, but only 26% of retail tenants have done so, he said.
“Some people have lost their jobs, and it’s our obligation to work with them,” Blau said.
Referencing Hudson Yards in particular, Blau said, “we have a mix there of start-up companies and restaurants that have been really hurt by what’s happened and are struggling. They’re going to have a tough time paying their rent.”
Blau said Related Companies will work with them on a payment plan or “whatever needs to get done.”
“And hopefully our lenders and partners will work with us so we can accommodate them,” he said.
But Blau said the coronavirus pandemic hasn’t impacted everyone in the same way.
“Those companies that have capability, have liquidity, have a strong balance sheet, I think they need to pay the rent, and the same goes on the residential side,” he said.
Blau specifically mentioned Adidas‘ initial decision to say it would stop paying rent for stores that were forced to close because of the coronavirus. The company ultimately apologized after facing criticism and paid its April rents, according to Reuters.
“This is not an excuse for people to not pay rent,” Blau said.