On the June 18 monthly CEO call, Caliber executives Tom Bade and George Pace covered the gamut—from the company’s hotel and hospitality interests to the federal Paycheck Protection Program, multi-family construction and management, regional real estate trends, even some good-spirited ribbing about respective football allegiances.
Bade, Caliber’s Senior Vice President of Business Development, and Pace, head of sales, filled in for CEO Chris Loeffler, who usually leads the discussion. The duo explained that Caliber’s portfolio, management team and regional distinctions are each well-suited to weathering the COVID-19 pandemic storm.
CFO Jade Leung and the financial team were “very quick” to see the challenges ahead for Caliber’s hotel properties, Bade says. “We started the application process in February right when the pandemic hit and basically were at the front of the line for a couple different relief programs,” he says.
Because of Caliber’s decisive action, the company was able to secure a $750,000 grant from the federal Economic Injury and Disaster Program and a whopping $3.7 million in Paycheck Protection Program funding, which kept hotels operable, employees working and is eligible for repayment forgiveness.
“We were protecting our investors, protecting our properties (and staffs),” Bade says. “It was very appropriate for us to go after this and we did go after it swiftly.”
Pace and Bade also note that Caliber’s emphasis on business hotels close to Sky Harbor International also helped during the first few months of the outbreak since those five properties are not dependent on leisure travelers like many of Arizona’s grand resorts as the “occupancy trend line is heading in the right direction,” Bade says.
Another business-centric property, the new Doubletree Hilton currently under construction adjacent to the Tucson Convention Center, proceeds on schedule and is expected to open in early 2021, Bade says.
Management of multi-family properties and those under development were also hot topics, and an area where Caliber investors find solace.
“Metropolitan areas like Seattle, San Francisco and New York have seen about a 7 percent drop in their actual rental rates, which is huge,” Pace says, referring to the affects from the recent coronavirus outbreak and subsequent layoffs. “(Those markets) are also seeing occupancy rates drop. So if you’re an apartment owner, you’re maybe not really that happy right now.”
The opposite is happening in Caliber markets like Phoenix, Tucson, Utah, Colorado, Nevada and Texas, Pace says: “As an example, our Treehouse Apartments in Tucson are currently at 93 percent leased and we have pretty much nobody in default at our GC Square Apartments in Phoenix. Our Eclipse Townhomes in Scottsdale are 95 percent occupied.”
“So when you look at the apartment market in Phoenix or Tucson, we’re actually seeing rents increase during this time, and we’re seeing very few incidents where occupants are not paying their rent,” Pace continues. “This is a prime example of (COVID-19) affecting different areas in different ways.”
In Colorado, at Caliber’s highly anticipated Johnstown project north of Denver, the buzz surrounds “horizontal multi-family.”
“People are at a point now where they may not want someone to live above them or below them,” Bade says. “Instead of tenants going into the high rise apartment buildings, they’re now building
communities that are all one story with very small lots, one little common association. Horizontal multi-family, we think, is going to be a very strong direction to go.”
Other Company News
The duo also reported updates on:
- Caliber’s behavioral health rehabilitation project in Phoenix, which is expected to be completed in August.
- A second behavioral health medical center, located in Meridian, Idaho, which is still in the planning stage.
- Caliber’s public offering, which recently topped $2.4 million in new investment.
- Refinements of the frontage road and accessibility to the Johnstown project being made by the Colorado Department of Transportation, which will benefit both commercial-retail customers and residents.
- The release of the company K-1 Annual Report
Bade and Pace look forward to continued monthly CEO calls as Caliber continues its march toward being publicly traded, and to the full-time return of professional sports, as Bade playfully chided: “George is a (Chicago) Bears fan. So for those of you who are (Green Bay) Packers fans or anything else out there, try not to hold that against him.”
Investors – and sports fans everywhere—look forward to Caliber’s next update in July.