Q&A: Weathering the Pandemic with JPMorgan Chase’s Greg Newman
As the COVID-19 vaccine rollout continues across the U.S., the state of California recently announced plans to fully reopen its economy by June 15. We caught up with Greg Newman, Area Sales Manager for the California region at JPMorgan Chase, to discuss the reopening plan and how the firm has conducted its business since the onset of the COVID-19 pandemic.
Q. After a long year, California has implemented a plan to fully reopen by June 15. What does this mean for multifamily lending and how is it different from the last year?
A. The pandemic has impacted a lot of business owners across the spectrum. Those business owners and their employees are our customers—whether they are California landlords with a term loan, or tenants who may be customers of JPMorgan Chase with a credit card or checking account. So, we are mindful of both of those situations.
In the beginning of the pandemic, I think most of us can reflect and say we didn’t fully know what we were facing. It was not a normal financial crisis or an economic crisis. This was an impact felt across the world and there was no rulebook for how it was going to play out. It was a very nervous time for landlords and tenants alike.
We completely went into a data management role where we were calling landlords every single day across the country and fortunately rents held up very well. The vast majority of tenants in workforce housing were paying affordable rent and they had good relationships with their landlords, who were flexible with the tenants. Where we saw the most impact in California was multifamily units with higher rent, through decreased occupancy and rent levels—which I think is still true today. But, because we are in the workforce housing space, our term loans support buildings whose rents are pretty low based on the area median income.
Q. Eviction moratoriums have been in place for over 12 months and deeply impact property owners who cannot collect rent and have no recourse when tenants haven’t paid. How has JPMorgan Chase been working with borrowers and what is the approach?
A. Early on, it was the intake of all the information. You had cities, counties, states and the federal government all coming up with different solutions or ideas as to what they could do. Also, there was a lot of information from various sources being sent around and continuously updated, so that all stakeholders could get their arms around what was coming around the bend.
In talking to the borrowers and landlords we work with, they were trying to keep tenants in buildings. We saw landlords having tenants pay what they could or helping them if they couldn’t make rent for a short period of time. We worked with our borrowers to make sure they had the support they needed from their lender. It was encouraging to see that we were all doing what we can to treat each other with dignity and compassion.
Q. The Work from Home/Work from Anywhere climate has led to a tenant flight from more expensive urban cores and into secondary and tertiary markets. Is investment following and how is lending adjusting?
A. I think that all markets saw some elements of that over the past year. If you look at Silicon Valley, it is very easy for technology companies to make that pivot. And at JPMorgan Chase, we had to make that pivot too. I’m at home in my dining room and I’ve been here for a year. I miss the energy of people working together and the combustion of ideas and problem solving that can happen a lot quicker in an office setting. But I’ve been pleasantly surprised at the adjustment that all companies, large and small, have made.
We’re fortunate to have technology that’s gotten us through this pandemic. If this happened 20 years ago, the outcome would have been completely different. Looking forward, we’ll see some various effects as a result, such as a hybrid model of working in the office and staying home. There’s only so much time you can sit at your dining room table.
As we slowly go back to the office, companies are being cognizant of the adjustments needed. I don’t think they are going to flip a switch and have everyone back to the office at once and there will be a varying degree of flexible work options. The longer-term effects are still unknown at this time.
Q. How has the competitive lending landscape changed (i.e., non-bank lenders entering the space), and how is JPMorgan Chase remaining competitive? How can the firm offer deeper services and support?
A. At the beginning of the pandemic, we were very focused on taking care of our customers. We were tracking rents, collections, vacancy, occupancy and seeing where it would settle.
Regionally, indicators across San Diego, Orange County, most of Los Angeles and other markets around the country remain very encouraging, other than small adjustments in rents and price. Although they have had to make some adjustments, it continues to be a largely healthy market.
The important part is that our customers were working together through this. This was a real impact across all spectrums of humanity. The impact was global and everyone has felt the uncertainty of not knowing what all the trickle down effects would be. Today it is a much brighter picture.