ZOOM: CANNABIS & COMMERCIAL REAL ESTATE & VIRTUAL HOLIDAY COCKTAILS
The New England Chapter held a Zoom program was held on Thursday, December 17, 2020 and the topic was What you need to know as a professional dealing with cannabis. Approximately 35 participants attended including the SIOR National President Mark Duclos. Other SIOR members from update New York and non-SIOR members
were welcomed. The event ran from 3:30pm to 4:30 pm and then a virtual cocktail discussion followed.
The seminar was presented by John Connors of Vantage Builders and Camilo Basto of ABG Commercial Realty and allowed members to ask questions. As leading authorities on the emerging cannabis industry in MA, Vantage Builders and Camilo brought insight and answered questions about how to navigate this new entry into commercial real estate. The presentation spoke about the difficulties of obtaining a license and the time required, anywhere from 6 to 24 months. John spoke as a contractor that he can feel a little nervous about being paid or paid on time as this field is still. Depositing rent checks in a FDIC bank or obtaining funds for tenant improvements is a challenge as cannabis is still federally illegal. Obtaining insurance is a challenge as well. The discussions brought some solutions as Century Bank, the new Bank of New England and Salem Five have been willing to lend in this environment with some caveats. Because of the short supply of lenders, the fees and interest rates can be at a premium.
Both Greg Klemmer and Rob Nahigian spoke about their experiences having completed cannabis transactions. Greg completed a lease on the North Shore and Rob spoke about his negotiations with NETA on 100,000 square feet in Franklin, MA. Camilo voiced his opinion that he’d like the Feds to stay out of the industry as it can drive up competition if it’s regulated and eliminate small owners. Camilo said power and cost are the two major factors that decide site and geographical locations. There were discussions about the fact that states want to attract the cannabis industry as it generates a great deal of sales and income tax revenues. Camilo also stated that it adds to job employment, wage taxes, trucking services, etc.
On the tenant improvements, Camilo said that almost always the tenant will conduct and pay for its own TI. The leases tend to be long-term and may include options to purchase. He also said that medicinal and recreational plants were basically the same type of plants but just had different branding tags. Because of the long-lead time to obtain permits and licensing, his experience is that these cannabis tenants will pay rent while they try to obtain licensing.
At the end of the program Greg Klemmer announced that he is planning a January 20, 2021 program with Dwyer Brown architects on the new parking to office concept that will be touchless using iphones. He may also plan another cannabis zoom program as a part two to today’s program. The event then ended at 4:30 pm.
A chapter holiday reception was held immediately after the event as a Post Seminar Holiday Cocktails starting as soon as the seminar ended. There were approximately 12 SIOR members and guests that attended. The casual discussions included more about the cannabis program, how brokers are working from home, touring protocols and then some tenants are not wearing masks unless asked. There were discussions about CV19 and some of the members had family or themselves that had contracted CV19 and how they survived. There were discussions about how members felt about taking the new CV19 vaccine and the majority were in favor of taking it while a couple of members questioned its safety and wanted to observe its effectiveness. There was also a discussion about going back to the office. Many of the members had heard that some firms would not go back to the office until the summer and some not until next September, 2021. There was a belief that there would be at least 25% less workers in offices and that many firms may not want as much office space or may move to the suburbs. Some felt that there could be a split location decision of having two operations; suburbs and cities.