CED’s Coronavirus Update

The COVID-19 pandemic has affected the U.S. and global economies on an unprecedented scale. On March 13, 2020, President Trump declared a national emergency in response to the COVID-19 outbreak. He first issued voluntary shut-down orders on March 16 and held them in place through April. The White House recommended all restaurants, bars, and other indoor and outdoor venues where people congregate close in states with evidence of community transmission. Before this pandemic, the United States had never issued an order which essentially shut down the U.S. economy.

Governor Gavin Newsom of California declared a state of emergency on March 8 and issued a stay-at-home executive order on March 19. Continental East Developed was deemed an essential business and continued operations. CED cares deeply about the health and safety of our residents and employees. The company responded by arranging for a majority of employees to work from home. The remaining worked at the office under strict CDC guidelines. All employees returned to the office in May under mandatory conditions and modifications. Work stations are at least six feet apart, and employees are

required to wear face masks. Employees test for fevers each day and we encourage them to follow proper hygiene practices recommended by the CDC and other health authorities.

Riverside County recently entered Stage 2 of its reopening plan. The California Department of Public Health approved the county’s request to reopen more businesses, including retail stores, shopping malls, dine-in restaurants, and non-primary schools, as part of the governor’s Accelerated Phase Two plan. Operational modifications are required for businesses to reopen safely. Additional sectors of the economy are looking forward to reopening in the coming days and weeks.

Industries that are suffering the greatest from the pandemic, which includes commercial aerospace, travel, and insurance, may experience a slower recovery. Within the travel sector, the decline in immediate demand is estimated to be five-to-six-times higher than what followed after the September 11 terror attacks- though domestic travel may recover faster. The crisis has also magnified existing challenges and vulnerabilities in the aerospace and automotive industries, which will affect their recovery rates.

Small businesses are also particularly threatened by the pandemic. More than 100,000 small businesses nationwide have permanently closed, and analysts warn this is only the beginning of the worst wave of small-business bankruptcies and closures since the Great Depression. Despite Congress approving a historic $700 billion to provide relief, “many small business owners say Congress’ financial rescue isn’t designed well to help very small business, known as micro firms, that have large overhead costs such as rent” (quoted from the Washington Post). According to a poll conducted in late April by economists who have been tracking small-business closures, 34 percent of small businesses said they are either paying reduced rent or delaying their payments.

To date, as a result of the U.S. Department of The Treasury Paycheck Protection Funding program; Continental East Development, our real estate investments and Renaissance Villages communities remain financially stable. Should the Coronavirus continue to impact the economy and our related businesses we are currently evaluating potential strategies which may be necessary for purposes of maintaining future orderly business operations.