b'Odell MurryMAI Financial Services, Inc.Can Private Money Fuel the Recovery Once Again?As the Pandemic Retrenches, Private Money Steps Upncomparingthe2020COVID-19during late fall and early winter.Since thenlenders to once again Save the Day, as the Pandemic to the Great Recession ofrent prices have already begun to climbprivate lending industry did so admirably 2007, there are some major differences,again, but it is still too soon to tell if thatin 2007 and 2008.but some similarities.During the Greatrally will be sustainable without continued Recession of 2007 institutional lendersgovernment intervention. Collapse of Employmentwere quick to batten down the hatches, the The unemployment figures have been dire, money stopped flowing, and the resultingIt can be said that the federal governmentas whole sectors of the service economy hasty retreat of institutional lenders allowedcertainly has intervened more quicklywere paused or diminished because of private lenders to get involved to keepin this case than in the Great Recession.COVID-19 lock-down policies.In April the gears of the real estate sector of theThe Federal Reserve swiftly dropped the2020, the U.S. unemployment rate peaked economy from locking up completely.AsFederal funds rate to near-zero, resumedat 14.7%, and it has only scaled down to traditional lenders backed away, privateprograms to purchase massive amounts6.4% in January 2021.As we all know, those lenders seized the moment and steppedof securities, backstopped money marketnumbers likely are worse among people of in to fill the void. mutual funds, and vastly expandedcolor and women, who economists say are the scope of its repurchase agreementbearing the brunt of this economic disaster. Todays economic indicators and the moodoperations.Congress approved a $1.8 may feel reminiscent of the lead-up to thetrillion package on March 27, 2020, whichEven a short-term interruption in employ-Great Recession of 2007.Like with thatincluded $500 billion in direct payments toment can have disastrous consequences economic disaster, the stock market hasAmericans, $208 billion in loans to majoron credit scores for some potential home-remained stubbornly strong throughoutindustries, and $300 billion in Small Businessbuyers, as bills become past due.If federal the COVID-19 pandemic, despite concernsAdministration loans.Nine months later,recovery programs fail to keep pace with of a record number of people out of work.a $2.3 trillion spending package, whicheconomic need, the credit picture for many The lock-down has hampered much ofincluded a second round of stimulus, washome-buyers, at least with institutional regular economic activity, but at the samesigned into law.lenders, may grow even murkier.time, it has led to record levels of personal savings.At the start of 2021, there areThe question is, what happens if the marketsReshaping of the Real Estate Sectorsome 10 million Americans behind on theirperceive that government funding dries up,We are likely to see a dramatic reshaping rent and mortgages, and it appears thator that the funding provided simply isntof the real estate outlook, and it may have government programs are the only thingenough to stave off calamity?Institutionalreal ramifications for institutional and preventing a massive crisis in the housinglenders do not manage upheaval the wayprivate lenders.Office, retail, vacation, and market, but that crisis showed signs ofthat private lenders can.As a result, thehospitality real estate all saw a significant bubbling up to the surface as indicated byopportunity for private lenders may be falling rental prices in pricey coastal metroshere again.It may then be up to privatecontinued on page 12Spring 2021 Page 11'