Everyone knows that déjà vu feeling—that strange sense of having experienced something before. But fewer may know vuja dé, coined by the comedian George Carlin to describe that strange feeling that somehow … this has never happened before. Many Florida commercial real estate players are currently experiencing both déjà vu and vuja dé. Economic activity has substantially declined. Tourism quickly evaporated. Restaurants and hotels shuttered. Borrowers demanding grace periods and modifications. But layered over all this is the pandemic, Covid-19, halting Chinese construction supplies and investors' willingness to part with their funds. Yes, this should remind you of 2007 again. But no, this is something totally different.

If you are a commercial real estate veteran who survived the troubled 2007 downturn, you know it is time to stop stockpiling toilet paper and instead take stock of your financial position now.

Borrowers, here are things you should be doing now:

• Determine your liquidity. Government-ordered lockdowns to stem the pandemic are putting massive strains on liquidity. Borrowers should assess their needs. When deciding whether to draw down on current credit line availability, a borrower should carefully assess their loan documentation to understand whether there are any restrictions imposed by its lender that would trigger a potential breach of financial covenants.
• Know what's coming. Review your loan documents for critical due dates like payment dates, maturity dates and financial reporting.
• Ask for help from your lender. The FDIC issued a financial instruction letter on March 13 specifically encouraging "financial institutions to take prudent steps to assist customers and communities" affected by COVID-19. The Letter also advises banks that prudent efforts to modify the terms of existing loans for affected customers "will not be subject to examiner criticism." The FDIC also assures banks that it will work to reduce the burden when scheduling examinations, including offering an off-site review. So, your lender may already be inclined to deal.
• Take inventory. Borrowers should take inventory of their assets, encumbered or otherwise, to determine the value and availability of their collateral.
• Get data in order. Prepare financial projections and cash flow projections on low, likely, and high cases in anticipation of receiving a request for updated financials from your lender and be prepared to deliver.
• Be very careful what you agree to now. If your lender requires you to sign a pre-negotiation letter or a forbearance agreement, contact counsel before doing so to help you review the terms. These documents often contain required admissions and releases that can significantly impact your rights.

Lenders consider the following to avoid many of the pitfalls that the lending industry faced in the last recession relating to the speedy collection of its loan payments and foreclosure of assets serving as collateral:

• Dust off your forms. Now is the time to take a hard look at your pre-negotiation forms to ensure that a pre-negotiation letter is in place, with adequate protections such as non-waiver of rights language.
• Prepare your files. Events from the last recession taught lenders that orderly files demonstrating a clear chain of ownership and containing critical documents—e.g., an original promissory note, correct legal descriptions, proper execution of documents by authorized representatives of the borrowing entity—play important roles in a lender's ability to effectively enforce its rights.
• Reassess the terms of your standard forbearance agreements. Forbearance agreements do not need to be complicated or long, but a lender should ensure that its form agreement includes a borrower's acknowledgment of default, a clear agreement as to the amount of debt owed, releases, a waiver of the U.S. Bankruptcy Code's "automatic stay" provision, and even stronger remedies like the right to obtain a judgment ex parte in the event a borrower fails to comply with the forbearance terms.
• Demand your reports. Given the systemic nature of this crisis, borrowers will demand, and lenders will likely grant, payment grace periods or other extensions. Indeed, some lenders may risk significant reputational damage if they do not accede to these requests now. But lenders would be prudent, in turn, to demand that their borrowers immediately comply with all financial and other reporting requirements under their loan agreements. In the weeks ahead, this information will be critical for lenders to determine how each borrower's individual situation should be managed.
• Demand Notification. Lenders should also consider demanding that their borrowers notify them of any business interruption claims filed or whether they are applying for or stand to receive government aid during this crisis.

This all sounds familiar, but it's still uncharted territory. But at least one thing is for sure: Florida commercial real estate players should remember how bad things can get and act immediately to prepare for the challenges ahead.