Dear Blue Heron Partners,
First and foremost, we are reaching out to let you know that we are thinking of you, your families, your friends, and your community, and we hope that you are faring as well as possible in this unsettling environment. Given the unprecedented events due to COVID-19, we would like to provide an update on steps Blue Heron is taking and share our insights:
Health and Safety: Being well-informed and taking precautionary measures to ensure the health and safety of our team, our extended team, including property managers and third-party consultants, our residents and tenants, and the community at large, is of the utmost importance. To that end, we are working to ensure that necessary steps are being taken across all our properties. We are grateful to be working with some of the best apartment property managers in the industry who manage communities across the country and can draw from a broad set of best practices. All have been quick to respond with action plans to ensure both the safety of residents/staff and the continuity of business operations. Initiatives include following CDC guidance regarding social distancing to help reduce community spread of the virus. Specific steps being taken include closing non-essential community amenities, cancelling resident events, gatherings, fitness, business, and entertainment centers, and implementing protocols to ensure the safety of leasing, management, and maintenance staff, as well as residents and tenants. Internally, we have implemented a work-from-home policy and will be conducting all meetings as video and audio-conferences. External meetings will also be remote, unless it is absolutely necessary to be on-site. We are available by email or mobile phone, so please do not hesitate to reach out. Our individual emails can be found on our website, www.blueheronassetmanagement.com.
Risk Management: The importance of good governance and hyper-focused asset management is magnified during times like these. We have been and will continue to be in contact with our lending, insurance, property management, construction, and other third-party business partners to ensure that all groups have a plan in place for mitigating current risks while supporting Blue Heron’s business plan for each asset and the funds we manage. It is during times like these that our prudent use of leverage, conservative cash management and maintenance of operating reserves will serve our funds well.
Investment Strategy: We will continue to balance being patient with being opportunistic in seeking to find investments with compelling risk-adjusted returns. While the full impact of this pandemic on real estate as a whole, within our region, and within our properties are all difficult to project, we remain optimistic in the long-term about our investment focus and strategy. Multifamily, as a property type, with its highly diversified tenant base, tends to provide more stable, predictable cash flow than other property types with higher tenant concentrations, and historically, during recessionary periods, multifamily has shown good resiliency. At the same time, we will prepare for the downside scenario, and our ongoing actions involve stress-testing assets and fund portfolios in consideration of potential direct and indirect consequences of elevated levels of unemployment and its potential to impact occupancy levels and rental rates. Despite the recent volatility in the public markets, we maintain high conviction of the underlying fundamentals of multifamily/mixed-use and the positive demographic trends of Blue Heron’s target markets. Though the current environment presents many challenges, we believe that it is during times like these that good opportunities can be uncovered. As a team, we are well-positioned and stand ready to navigate these choppy waters.
On behalf of our entire team, as much as ever, it is in these trying times that we are grateful for you, our partners. We will continue to communicate updates as necessary, as we gather more information and as plans evolve. Thank you for your support, and we hope that you and yours stay healthy and safe.
