Coronavirus changing deal fundamentals

[Christopher Brown]

I am in my 180-day period for a 1031 exchange with $2mm in escrow and two properties under contract: a stabilizing self storage deal in a small but growing market and a NNN deal with three QSR (two credit quality national) tenants in Tampa. I had intended to close on the NNN deal and to syndicate the storage deal, but that was two weeks ago...

I have NO idea how to move forward with either property and my 180 days is up first week of May. Financing for NNN QSR is basically frozen - my really attractive CMBS debt got pulled, though the local bank says they think they'd still fund it - and the possibility of rent abatements or the spaces going dark in the next six months certainly seems like it could be a possibility. And while I have the reserves to float a longer lease up for the storage deal, the prospects for much longer stabilization period and slower growth in population/rents in that market suddenly make the deal seem less attractive.

Because my 1031 cost basis is so low, I'd pay basically 45% in cap gains if I don't close on either deal. But paying the taxes and having $1mm cash on the sideline all of a sudden seems almost like an upside!  Wonder how others with deals in play are evaluating the huge unknowns that all of a sudden are in play?