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10 Must Reads for the CRE Industry Today (July 7, 2020)

Commercial property sales in New York City took a deep dive in the second quarter, reports the Wall Street Journal. As department stores disappear, regional malls could follow, according to the New York Times. These are among today’s must reads from around the commercial real estate industry.

  1. Coronavirus Triggers Steep Drop in New York City Commercial Property Sales “The volume of commercial property sales in New York City cratered in the second quarter because of the new coronavirus pandemic, a trend that will likely accelerate in the last half of the year with painful consequences for city tax collections. Investors purchased only 170 properties valued at $3.6 billion between April 1 and the end of June, the lowest number of transactions for a three-month period since the second quarter of 2009, according to B6 Real Estate Advisors. There were 523 deals valued at $7.6 billion in the second quarter of 2019, said the firm, which specializes in New York commercial property sales.” (Wall Street Journal, subscription required)
  2. With Department Stores Disappearing, Malls Could Be Next "The standard American mall — with its vast parking lots, escalators and air conditioning, and an atmosphere heavy on perfume samples and the scent of Mrs. Fields cookies — was built around department stores. But the pandemic has been devastating for the retail industry and many of those stores are disappearing at a rapid clip." (The New York Times)
  3. The Bank Drive-Through Makes a Covid Comeback “Long before ATMs and online banking, drive-through lanes were a popular customer convenience by the 1950s. The digital age threatened survival of the mechanical systems, built on 19th-century technology, but Covid-19 has started to reverse their declining fortunes. Banks are reopening decommissioned and unused lanes. Some are installing new ones.” (Wall Street Journal, subscription required)
  4. Campaign Donations from Real Estate Lobby Drop Dramatically as Democrats Decline Them “The 2018 loss of the State Senate by Republicans, the latest campaign finance filings, and a growing list of Democratic candidates pledging to refuse donations with ties to real estate interests suggest the once-formidable Real Estate Board of New York, or REBNY, is in something of a political no man’s land.” (Gotham Gazette)
  5. Borrowers Need Property Tax Relief Too. Here’s How It Could Be Done “Unpaid real estate taxes, in almost all jurisdictions, are a first priority lien on the property. As noted, failure to pay real estate taxes in a timely fashion may put an owner in default and in breach of agreements for loans or with suppliers or creditors. This can set off a chain reaction of defaults that could make recovery after the current crisis subsides impossible.” (National Mortgage News)
  6. How Job Losses Impact Manufactured Home Production “Manufactured housing community operators have been reporting rent collections above 90 percent for MHCs and mobile home parks for April and May, an encouraging sign for the segment’s resilience during these turbulent economic times. With demand for affordable housing remaining on the rise—especially in states that took the hardest hit during the pandemic—the segment is expected to maintain a strong outlook in the coming years and to remain essential for boosting the supply of affordable housing.” (Commercial Property Executive)
  7. Centene Plans $1B Regional HQ in Charlotte “Centene Corp. has selected Charlotte, N.C., for the location of its new 1 million-square-foot East Coast headquarters. The St. Louis-based health-care administration company, which conducted a comprehensive evaluation process in its search for a regional home, will invest $1 billion in the development of a campus that will generate 6,000 new jobs.” (Commercial Property Executive)
  8. The ’Obvious Buyer’ for CNN Center Has $5B of Motivation Across the Street “With family connections to the Atlanta Hawks owners and ownership of 40 acres next door, some say CIM Group is the obvious developer to pursue CNN Center.” (Bisnow)
  9. Pritzker Signs Tax Law Deeming Some of Chicago’s Most Valuable Property ‘Blighted’ “Hidden away inside the 23 pages of Senate Bill 2052 is an extension for the Near North tax increment financing district until 2033. The district so far captured $331 million in property tax increases from other taxing districts, mainly Chicago Public Schools, and put the money towards economic development of the district. The district was formerly the city’s notorious Cabrini-Green public housing development, sitting on some of Chicago’s most valuable land just blocks from the Magnificent Mile and a few ‘L’ stops from the Loop.” (Illinois Policy)
  10. Harvard Will Allow Some Students on Campus This Fall So Long as They Take Coronavirus Tests Every Three Days “Harvard previously announced that all teaching would occur online. Today it also said tuition will not be discounted from $49,653, although students enrolled remotely won’t pay housing fees. The semester will begin as scheduled on Sept. 2 and all students living on campus will be expected to leave by Thanksgiving. Students will have to undergo Covid-19 testing upon arrival and every three days afterwards.” (CNBC)
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