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11 Must Reads for the CRE Industry Today (June 24, 2020)

Over 100 Congress members have asked the Federal Reserve and the Trump administration to help businesses struggling with commercial real estate debt, reports the Wall Street Journal. Slightly more than 92 percent of apartment households made either a full or partial rent payment in June month-to-date, according to NMHC. These are among today’s must reads from around the commercial real estate industry.

  1. Lawmakers Ask Fed to Help Businesses Struggling to Make Mortgage Payments “More than 100 members of Congress are calling on the Trump administration and the Federal Reserve to help struggling businesses pause debt payments in a key real-estate financing market. Many of the hotels, shopping malls and office buildings that borrow money in the roughly $550 billion market for commercial-mortgage-backed securities said they have been unable to negotiate debt reprieves during the coronavirus pandemic. Some are worried they could lose their properties to foreclosure, The Wall Street Journal reported this month.” (Wall Street Journal, subscription required)
  2. ICSC Applauds Congressional Letter to Treasury and Federal Reserve Requesting Assistance for CMBS Borrowers “’Due to unexpected loss of revenue and rent, many shopping center owners are facing the challenge of paying debt obligations with impaired cash flow. Without federal liquidity assistance we are looking at un-necessary damage to financial markets, increased unemployment and irreparable harm to communities across the country,’” said ICSC President and CEO, Tom McGee.” (BusinessWire)
  3. Public Real Estate Companies Are the New Way to Buy Distress “Despite tumbling real-estate values during the coronavirus pandemic, it has been hard for buyers to find buildings for sale as most owners hold out. That has sent some scurrying to acquire shares in public real-estate companies and bonds. A handful of big investment firms, including Blackstone Group Inc., Starwood Capital Group and Oaktree Capital Management, have been buying securities backed by real estate, according to public filings or people familiar with the matter.” (Wall Street Journal, subscription required)
  4. NMHC Rent Payment Tracker Finds 92.2 Percent of Apartment Households Paid Rent as of June 20 “The National Multifamily Housing Council (NMHC)’s Rent Payment Tracker found 92.2 percent of apartment households made a full or partial rent payment by June 20 in its survey of 11.4 million units of professionally managed apartment units across the country. This is unchanged from the share who paid rent through June 20, 2019 and compares to 90.8 percent that had paid by May 20, 2020. These data encompass a wide variety of market-rate rental properties across the United States, which can vary by size, type and average rental price.” (NMHC)
  5. Proposed Regulations for Section 1031 Exchanges “Due to a 2017 change to I.R.C. section 1031, some taxpayers will now owe tax with respect to exchanged personal property. In their Real Estate Financing Column, Ezra Dyckman and Aaron Gaynor discuss how new proposed regulations and other parts of the 2017 changes to the tax law mitigate the consequences to exchanging taxpayers.” (Law.com)
  6. A Multibillion-Dollar Opportunity: Virus-Proofing the New Office “To protect employees and reduce liability for virus outbreaks at work, companies are racing to comply with public health guidelines on issues like employee screening and social distancing. In the United States, the market for contact-tracing technologies for employers could soon be worth $4 billion annually, according to estimates from International Data Corporation, a market research firm. But the preventive tools and pandemic workplace rules are so new — as is the emerging science on the virus — that it is too soon to tell how well, or if, they work.” (The New York Times)
  7. “Change Is Happening:” Inside Real Estate Tech’s Race to Add Diversity to Their Boards “After WeWork’s botched IPO, real estate startups have learned to add women to their boards.” (The Real Deal)
  8. Don of a New Era: Don Peebles’ Push for Inclusivity in CRE “Peebles spoke about his recent projects, economic hurdles for minorities in the U.S. and what the CRE sector can do to be more inclusive.” (Commercial Observer)
  9. Neiman Marcus in Talks with Facebook about Leasing Hudson Yards Space “Luxury department store Neiman Marcus opened its first Big Apple location last year — and it’s already up for grabs thanks to the coronavirus.Developer Related Companies is in talks with social media giant Facebook to take over the three floors Neiman Marcus now occupies at Hudson Yards, according to a WWD report.” (New York Post)
  10. Industry Leader William Millichap Dies at 76 “William A. Millichap, co-chairman of Marcus & Millichap, has died after a year-long battle with cancer at the age of 76, the real estate brokerage announced. George M. Marcus remains as chairman of the NYSE-listed firm, which is led by President and CEO Hessam Nadji. Millichap joined the company—then called G.M. Marcus Co.—shortly after its founding in 1971 and helped build it into a brokerage powerhouse that employs more than 2,000 investment sales and financing professionals today.” (Commercial Property Executive)
  11. How Physical Spaces May Adapt to a Post-COVID World “How will social and public behaviors be impacted? How will physical spaces have to adapt? Can we look to technology to provide any transitional assistance until a new normal is achieved? And how will spaces that have traditionally been communal, high-touch, very tactile settings – think retail and high-end luxury experiences – be forced to morph as the world adjusts to new norms?” (Forbes)
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