ALBANY – When the Long John Silver restaurant on South Slappey Boulevard closed recently, many assumed that it was another victim of COVID-19. A little research proved that not to be the case, though. However, the search did shed some light on the impact the virus has had on rental properties in Albany.
A quick check of the tax records showed that the property in question was owned by Thomas J. Marshall Jr., who had no problem with discussing the issues related to the restaurant’s closure.
According to Marshall, the closure of the Long John Silver franchise was the result of a tenant who was overextended and not fulfilling the terms of both their rental agreement or the standards of the franchise for months before the virus hit the community.
“Where COVID has hurt me is when statements were made in March that people didn’t have to pay their rent,” Marshall said. “A general statement like that really hurt.”
He estimated that this misconception has resulted in a 30-35% reduction in his monthly rental income.
Marshall also pointed out that just because people are receiving stimulus checks, and in many cases increased unemployment benefits, does not guarantee that these funds will be used to pay their rent.
Burton Newcomb, a local real estate broker with a growing portfolio of rental property in Albany, said he is facing a similar challenge.
“We have to work with these tenants,” Newcomb said. “That’s our first choice; we don’t want to kick anyone out. It’s better to keep a long-term tenant paying less for a period of time than evict them. Communication is critical.”
COVID-19 has presented both landlords with an additional challenge or burden in that eviction of a non-paying tenant is not an option with the courts being closed. Also, eviction comes with a multitude of costs, including legal fees, property removal and repairs, all required before the property can be relisted for rent.
Years ago, when tenants were evicted, their personal belongings were considered to be the property of the landowner when they were evicted. Those belongings were often set out on the curb. Today the landowner does not own the property that is left behind but is responsible for the appropriate disposal of it.
“Now code enforcement is just as likely to show up during an eviction as the sheriff, who is required by law to be present,” Marshall said. “I’ve been dealing with this all my life. My mom, Francis Wellman, and I have had tenants that have rented for 30 to 40 years. A lot of folks have lost relatives. So when people are losing people like that, it’s unexpected. You aren’t prepared for that. You can’t even go to the funeral. They are not financially prepared to bury someone. We have folks that have asked for some time, and that’s what we’ve done.”
Marshall said in some ways, the closure of the Long John Silver establishment was a good thing for the franchise in that he will be bringing the property back to the franchise’s standards, and they will be reopening.
Unfortunately, both Marshall and Newcomb acknowledge that businesses that were run well before COVID-mandated closure will struggle and come back. Those that were not managed well may not survive. Some estimates indicate that 25% of these businesses will not reopen.