GRAND RAPIDS — The owners of the iconic Waters Building admit they’ve been “fortunate” in avoiding most adverse effects stemming from the COVID-19 pandemic.
Ahead of the state-mandated stay-at-home order and social distancing measures, the Waters Building was 94 percent occupied and current on all of its leases, “and essentially is so today,” said co-owner Bill Mast, who’s also president of Grand Rapids-based contractor Visser Brothers Inc.
Mast and co-owner Mark Finkelstein, principal of Grand Rapids-based Edmark Development Co., have been working on a case-by-case basis with affected clients, namely the building’s two foodservice tenants. Even the Homewood Suites by Hilton hotel in the building has remained open, albeit at “significantly” decreased occupancy during the pandemic.
“By and large, office tenants in the building and apartments are not largely affected,” Mast said. “With our rent roll, so far, we’ve been fortunate enough to be largely unaffected.”
Finkelstein said 42 of the building’s 44 apartment units are occupied, and most of the office tenants, which are mainly professional service firms, “continue to work from home so they’re still making money.”
“Because of that, they’re paying the rent,” Finkelstein said. “We’re fortunate that we’ve got the type of tenants that we do that are able to do that.”
Despite weathering the current conditions relatively unscathed, Mast said it’s been “very encouraging” how lender Mercantile Bank of Grand Rapids has stepped up to help, in part thanks to some easing in federal regulations on the banking industry in the middle of the crisis.
“Our loan gives us a little ability to offer some of that grace forward to our tenants in the meantime without missing a payment or changing the nature of the loan,” Mast said, noting landlords are “sandwiched in the middle between tenants and lenders.”
The building owners also have adjusted to the new environment by limiting entry from three locations to just the main door on Ottawa Avenue, as well as stepping up cleaning and disinfecting of door handles and other commonly touched surfaces, including common area bathrooms.
Looking forward, the ownership team expects some lasting disruptions from the pandemic, particularly in people’s willingness to visit restaurants and other crowded venues. As well, some professions increasingly might switch to a work-from-home model, which could affect properties such as the Waters Building to some extent.
“People need socialization. They need to see people face to face,” Finkelstein said. “It’s one thing to Zoom somebody, but it’s another thing to be in front of people. It may take two years, but it’s going to go back to the way it was.”
Mast likens the current situation to penguins crowding toward the edge of an iceberg because they’re nervous to jump in over fears of a sea lion might eat them. But once they see a member of the group go in and not get eaten, they’re more apt to dive in and go hunt for prey of their own. He expects the country will monitor carefully what happens in the cities and states that ease restrictions and decide for themselves how to react.
Regardless of how long the process takes, Mast notes the Waters Building, which was built in 1898, has weathered many crises in its history.
“The building’s been here longer than anyone currently walking around and it’ll be here after we’re all gone,” he said.
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