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10 Must Reads for the CRE Industry Today (April 8, 2020)

Private equity investors are planning to take advantage of distressed asset sales, reports the Wall Street Journal. Airbnb has raised $1 billion in new funding, according to The New York Times. These are among today’s must reads from around the commercial real estate industry.

  1. Real Estate Investors Eye Potential Bonanza in Distressed Sales “A growing number of property investors are preparing for what they believe could be a once-in-a generation opportunity to buy distressed real-estate assets at bargain prices. Investment firms like Blackstone Group Inc., Brookfield Asset Management and Starwood Capital Group are sitting on billions of dollars in cash and capital commitments they have raised from pensions, sovereign-wealth funds and other big institutions in recent years. Many of these firms are eyeing hotels, retail properties, mortgage-backed securities and other assets that have come under stress in recent weeks.” (Wall Street Journal, subscription required)
  2. WeWork Sues Soft Bank Over Withdrawal of $3 Billion Tender Offer “Work’s special committee is suing SoftBank after SoftBank withdrew its $3 billion tender offer, the company announced Tuesday. WeWork is claiming that SoftBank breached its obligations under their agreement. WeWork alleges SoftBank breached its fiduciary duty to WeWork’s minority shareholders by failing to follow through with the offer. SoftBank said last week its decision to withdraw came from its own fiduciary duty to shareholders. SoftBank declined to comment on the lawsuit.” (CNBC)
  3. Airbnb Raises $1 Billion to Stockpile Cash in a Pandemic “Airbnb said on Monday that it had raised $1 billion in new funding as it grapples with devastation from the coronavirus pandemic, and as some technology start-ups take extra measures to stockpile cash during the outbreak. The private equity giant Silver Lake and the investment firm Sixth Street Partners led the investment, which was a mixture of equity and debt.” (The New York Times)
  4. Construction Halts Grow, Straining Both Housing and Financing Markets “As the coronavirus pandemic is tightening its grip on the country’s economy, which has now reportedly tumbled into a recession, the construction industry is now facing intensifying headwinds that are rippling through the housing market as well as the financial sector. As of Monday, according to Built Technologies, which provides lenders with real-time data on their construction portfolios, over $4 billion worth of construction loans – out of a total of $17.6 billion the company surveils – cover residential and commercial properties in locations where building has halted.” (Forbes)
  5. Investors Saw Office Buildings as Safe. Not During This Pandemic “When the coronavirus started spreading in the U.S., office owners with long-term, stable leases hoped their buildings would become a haven for skittish investors. But nearly a month into the pandemic, the opposite has happened. Investors are dumping shares of major office real-estate investment trusts. Sales of skyscrapers are unraveling, and office tenants across the country are negotiating to lower their rent bills.” (Wall Street Journal, subscription required)
  6. What Will Tomorrow’s Workplace Bring? More Elbow Room, for Starters “Returning workers can expect stepped-up cleaning and a reinforcement of social distancing. Hand sanitizer stands will probably be positioned in lobbies. Maintenance staff will swab door handles. There may be limits on the number of people allowed in an elevator. Workplaces may have significant changes in the long run, including new seating arrangements and the addition of building materials that discourage the spread of germs. New technology could provide access to rooms and elevators without employees having to touch a handle or press a button.” (The New York Times)
  7. Commercial Landlords Offer Rent Deferrals as Coronavirus Shutters Stores “Major commercial landlords in Canada are offering rent deferrals to tenants as the COVID-19 pandemic has forced many businesses to close their stores. RioCan, Choice Properties, and CT real estate investments trusts all said Monday that they were working with tenants who need support because of the financial challenges brought on by the outbreak.” (Global News)
  8. A Coronavirus Pandemic Fuels a Battle Over Business Interruption “With federal social distancing guidelines now extended through April 30, property owners nationwide are reexamining their policies with the hopes that insurance policies can provide a source of economic relief amid the escalating coronavirus pandemic. Whether or not insurance will be available depends on policy language and what actions the courts and the government take in the coming months.” (Commercial Property Executive)
  9. Tanger Outlets Announces Management Succession Plan “Tanger Factory Outlet Centers, Inc. announced today that Stephen Yalof, a successful and proven retail real estate executive, will join the Company as President and Chief Operating Officer effective April 10, 2020. The Company's Board of Directors also intends to extend Steven B. Tanger's contract through the end of 2023.” (PR Newswire)
  10. Prologis Says Inventory Will Increase Due to Coronavirus Woes “This week, Prologis Inc. hosted a business update webcast and conference call during which senior management discussed the firm’s current view of the logistics market and share company-wide efforts to help communities and customers affected by the COVID-19 pandemic. ‘We are usually the first company to report our quarterly results but we thought it would be important to give you an even earlier view into our operational metrics in this fast-changing environment,’ said Hamid Moghadam, CEO of Prologis.” (GlobeSt.com)
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