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10 Must Reads for the CRE Industry (Dec. 21, 2020)

Private equity firm Thoma Bravo has struck a deal to acquire property management software developer RealPage for $9.6 billion, reports the Wall Street Journal. Reactions from Marketwatch and The New York Times assess some of the new COVID-19 relief packages measures meant to help renters and whether the deal is big enough to provide the needed jolt to the U.S. economy going forward. These are among today’s must reads from around the commercial real estate industry.

  1. Thoma Bravo Agrees to Buy RealPage for $9.6 Billion “Private-equity firm Thoma Bravo LP has struck a deal to buy property-management-software provider RealPage Inc. for $9.6 billion, in one of the largest recent leveraged buyouts. Thoma Bravo is paying $88.75 per share for the company, a 31% premium to RealPage’s closing price Friday of $67.83, officials at the firms said.” (The Wall Street Journal)
  2. Congress will extend eviction moratorium, fund emergency rent assistance with new stimulus deal “Without assistance, many of these landlords could eventually face foreclosure, he added. The $25 billion in emergency rental assistance is a bandaid on a wider problem, said David Dworkin, president and CEO of the National Housing Conference. Dworkin noted that the bill is ‘a practical start for staving off the immediate threat of mass evictions across the country.’” (Marketwatch)
  3. It’s Finally Here. But Is It Enough? “Economists have warned that the bill would fall short of what was required to support the economic recovery. Democrats, who already accepted a sharp cut from the $2.2 trillion the House had approved earlier this year, called on President-elect Joe Biden to take more action when he assumes office next month: ‘It cannot be the final word on congressional relief,’ said Senator Chuck Schumer, the minority leader.” (The New York Times)
  4. Goldman Sachs, Netflix Ramp Up Covid-19 Testing for Workers “It is one of many back-to-work testing programs offered by pharmacies, labs and medical consultancies as employers try to bring workers safely back to offices, trading floors and movie sets. Alongside their social-distancing protocols and mask rules, employers are screening workers more regularly to catch those who don’t show symptoms yet but might carry the virus.” (The Wall Street Journal)
  5. Apple just temporarily closed all 53 stores in California and over a dozen in London “It’s not hard to guess why the stores are reclosing, particularly in California where COVID-19 saw its four deadliest days yet in a row last week as part of an ongoing surge, and in London where Prime Minister Boris Johnson has just put the city in emergency lockdown starting midnight. Apple confirmed the gist of it in a statement: ‘Due to current Covid-19 conditions in some of the communities we serve, we are temporarily closing stores in these areas,’ the company told Bloomberg.” (The Verge)
  6. Commercial/Multifamily Lending to Fall 34% in 2020 “To recap this year, MBA expects commercial and multifamily mortgage bankers to close $395 billion of loans backed by income-producing properties, a 34 percent decline from 2019’s record volume of $601 billion. Total multifamily lending alone, which includes some loans made by small and midsize banks not captured in the overall total, is forecast to fall 21 percent to $288 billion in 2020 from last year’s record total of $364 billion.” (Commercial Property Executive)
  7. Who Holds the $1.65 Trillion of Apartment Building Debt amid Eviction Bans and Plunging Occupancy Rates at High Rises? “The US government started barreling into multifamily debt during the Financial Crisis. Until then, government-backed multifamily debt was about on par with the holdings of banks and thrifts. Since then, the government’s share (blue line in the chart below) has shot up to nearly 50%.” (Wolf Street)
  8. Affiliated Development Launches $125 Million Impact Housing Fund “The fund’s overall investment objective is to generate a positive social and environmental impact as well as delivering attractive risk-adjusted returns for investors. The strategy is to capitalize the development of high-quality and green multifamily housing at attainable rents. Affiliated Development principals Jeff Burns and Nick Rojo will be the sole general partners and managers of the fund.” (Multifamily Executive)
  9. How Businesses Can Lead A Corporate Real Estate Revolution “For the past few months, we’ve been talking to leaders about what it takes to lead through the most complex and confounding problems, including the pandemic. Today we have a second conversation with corporate real estate veteran Chris Kane, author of Where is My Office? Reimagining the Workplace for the 21st Century.” (Forbes)
  10. Seattle Extends Eviction Moratorium Through Spring “Seattle Mayor Jenny A. Durkan signed a new Executive Order extending COVID-19 relief measures for residents and continuing the moratoriums on residential, nonprofit, and small business evictions in the City of Seattle through March 31, 2021. The City Council also unanimously passed the Mayor’s proposed extension temporarily suspending late fees on delinquent utility accounts.” (Connect Real Estate)
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