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11 Must Reads for the CRE Industry Today (July 27, 2020)

Senate Republicans have yet to put forward their proposal for further coronavirus relief as extended unemployment benefits and eviction moratoriums come to an end. A pair of columns from Forbes examines what bills are being discussed and what the impacts could be if no measures are passed. A piece from the Wall Street Journal looks at how some companies have begun to see the limitations of the work-from-home model. These are among today’s must reads from around the commercial real estate industry.

  1. As The Eviction Moratorium Ends, Here Are The Bills In Congress For More Rent Relief “The Senate coronavirus stimulus bill, whose introduction to the public was postponed earlier this week, does not include any relief for renters, although this may change in later negotiations with the House. A narrower stop on evictions, mandated through Fannie Mae and Freddie Mac to cover only buildings with mortgages the two enterprises secure, remains in place through the end of August.” (Forbes)
  2. America’s Next Housing Crisis: How The Pandemic Is Pushing Renters To The Brink “As government support fades, the country faces the prospect of a significant housing dislocation that will exact its heaviest toll on income-constrained renters and the small investor-operators who support the workforce and affordable housing markets. Already by mid-July, the Census Bureau Household Pulse Survey showed just over 20% of renters had missed or deferred last month’s rent. For Black households, that statistic is over 30%.” (Forbes)
  3. Retail REITs Continue Their Rent Collections Surge “Buoyed by continuing retail re-openings nationally, rent collections for free standing and shopping mall-focused REITs trended upwards in July after gains in June. The trend was highlighted in the fourth monthly survey of REIT rents across six property sectors by the National Association of Real Estate Investment Trusts (Nareit).” (GlobeSt.com)
  4. Federal Reserve Agency CMBS Purchases Improved Market Functions “Market functioning drives the pace of agency CMBS purchases. A range of metrics used to assess market functioning indicate that overall agency CMBS conditions have improved significantly since March. During the height of market stress, the Desk purchases of agency CMBS were relatively large, but as market functioning recovered Desk purchases declined.” (Econointersect.com)
  5. Companies Start to Think Remote Work Isn’t So Great After All “Now, as the work-from-home experiment stretches on, some cracks are starting to emerge. Projects take longer. Training is tougher. Hiring and integrating new employees, more complicated. Some employers say their workers appear less connected and bosses fear that younger professionals aren’t developing at the same rate as they would in offices, sitting next to colleagues and absorbing how they do their jobs.” (Wall Street Journal)
  6. The Virus Turns Midtown Into a Ghost Town, Causing an Economic Crisis “Midtown Manhattan, the muscular power center of New York City for a century, faces an economic catastrophe, a cascade of loss upon loss that threatens to alter the very identity of the city’s corporate base. The coronavirus’s toll of lost professions, lost professionals and untold billions of lost income and tax revenue may take years to understand and resolve.” (The New York Times)
  7. Unlocking the Value of College Real Estate “The physical campus is the heart of the institution, but it is also real property, with real value. Administrators may be able to turn to creative real estate ownership structures, common in the commercial real estate world, to create an infusion of cash for the institution without selling a cherished piece of the campus to an unknown developer to turn into an office park.” (Inside Higher Education)
  8. The coronavirus exposes the perils of profit in seniors’ housing “In seniors housing, REITs are clear about prioritizing share value, growth and monthly investor distributions. But there are no objectives to deliver better care, dignified environments or good workplaces, which should be paramount in the operation of seniors housing.” (The Conversation)
  9. The Gap, Real Estate Owners Deadlocked in $66M Row Over Closed Stores' Rent “The Gap and the other companies argue that not only should they not have to pay rent for that three-month span and the indefinite and ongoing period during which stores are closed, but that they should be refunded rent payments made in March, as Simon announced March 18 it would be closing stores that same day.” (Law.com)
  10. Blackstone, Prologis Bet Big On Industrial, Still A Pandemic Darling “Industrial real estate is responding to demand with full pipelines. Currently about 330M SF of industrial space is under construction, up from 248M SF a year ago, according to Avison Young. About a third, or 30.6%, of that total is pre-leased.” (Bisnow)
  11. Brookfield Asset Management gears up for $500-$700 million REIT offering “’The process for monetizing Indian assets through REIT listing by roping in investment bankers has already started. The proposed REIT is expected to be listed by March end,’ said one of the persons mentioned above. At $700 million, this would be India’s largest REIT issue so far. (The Economic Times)
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