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12 Must Reads for the CRE Industry Today (Nov. 18, 2020)

The PPP funds were not enough to save hundreds of companies from going out of business, reports the Wall Street Journal. Central banks might be looking at yield curve control, according to Reuters. These are among today’s must reads from around the commercial real estate industry.

  1. Negative Rate Risk, QE Overload May Push Central Banks Towards Yield Caps “Central banks are delving further into their tool kits to help economies recover from the coronavirus - cue yield curve control, a form of pinning down borrowing costs that more countries might need to embrace in the months and years ahead. Because government bond yields are used as reference rates for business and consumer lending, controlling them can influence the price of credit in the broader economy.” (Reuters)
  2. Hundreds of Companies That Got Stimulus Aid Have Failed “Many of the companies say the funds from the Paycheck Protection Program weren’t enough to keep them going as the coronavirus and lack of additional stimulus payments weighed on their businesses.” (Wall Street Journal)
  3. Airbnb Reveals Falling Revenue, with Traffic Hit by Pandemic “Airbnb, the home rental service that disrupted the travel industry and was itself disrupted by the coronavirus, took a major step toward one of the year’s largest initial public offerings when it revealed declining revenue and growing losses in a prospectus on Monday. The offering, which could value Airbnb at more than $30 billion and raise as much as $3 billion, will test investors’ appetite for hospitality-related stocks in a year when the industry has been battered and its future is uncertain.” (The New York Times)
  4. J.C. Penney Shareholders Ask Federal Court to Stop Sale to Simon, Brookfield “J.C. Penney’s shareholders, which include many of the retailer’s retirees, aren’t giving up on their view that there’s another way out of bankruptcy.” (Dallas Morning News)
  5. Possible Biden Appointee Roger Ferguson to Retire as CEO of TIAA Finance Firm “Teachers Insurance and Annuity Association of America said Tuesday that Roger Ferguson, the money manager’s long-serving chief executive, will retire in March. Mr. Ferguson, one of Wall Street’s most-prominent Black executives, ran TIAA for a dozen years, leading the firm through the 2008-09 financial crisis and broadening its reach through multibillion-dollar acquisitions. A former vice chairman of the U.S. Federal Reserve, Mr. Ferguson has emerged as a top contender for a cabinet role in the Biden administration, The Wall Street Journal reported.” (Wall Street Journal)
  6. Homebuilder Confidence in November Shatters Record High, as Buyers Keep Fleeing for the Suburbs “In November, builder confidence in the construction market for single-family homes soared to its third record high in as many months. Overall builder sentiment hit 90 on the monthly National Association of Home Builders’ Wells Fargo Housing Market Index. Anything above 50 is considered positive. Last November, the index stood at 71. At the start of the coronavirus pandemic, in April, builder confidence plummeted to 30. Buyer demand has been incredibly and unexpectedly strong since then.” (CNBC)
  7. As Occupancy Dwindles, College Dorms Go Beyond Students “Yeshiva University was in trouble, and Pebb Capital saw an opportunity. The financial woes for Yeshiva, the oldest Jewish university in the United States, started in the early naughts, and by 2015, its endowment had shrunk by $90 million. To free up cash, the school began selling pieces of its real estate, including the Alabama, a student housing property in Manhattan that served students at Yeshiva’s Cardozo Law School.” (The New York Times)
  8. Retailers Tap Mall Owner Simon to Help Make Returning Online Purchases Easier “Mall owner Simon Property Group is working with the returns technology platform Navar to accept customers’ returns from brands like Levi’s and Gap at the concierge desks at some of its malls. The rollout of the service comes as more people shop online, and in the midst of the holiday season, which tends to boose returns. There will be roughly $280 billion worth of returns from this holiday season, according to Salesforce estimates.” (CNBC)
  9. TIAA, Healthcare Realty Form Joint Venture “Healthcare Realty Trust Inc. and TIAA have entered in a joint venture agreement to invest in medical office assets. The former owns a 50 percent interest in the partnership and will act as managing partner, handling the day-to-day operations and leasing of the properties. In addition, Healthcare Realty will fund its pro-rata share of future investments.” (Commercial Property Executive)
  10. Michigan Restaurant Association Files Federal Lawsuit to Block State Order Closing Dining Establishments and Bars “The Michigan Restaurant & Lodging Association (MRLA) in Lansing, along with plaintiffs Heirloom Hospitality Group in Birmingham and H.I.H. Inc., d/b/a Suburban Inns, in Hudsonville, today filed a federal lawsuit against Robert Gordon in his official capacity as director of the Michigan Department of Health and Human Services. The complaint seeks an emergency preliminary injunction to resume on-premise indoor food and beverage consumption.” (D Business)
  11. Prop. 15 Defeat Linked to Greater Property Tax Fears, Opponents Say “Opponents say voter fears of a full repeal of Prop. 13 helped their campaign defeat the partial repeal Prop. 15 would have ushered in.” (Bisnow)
  12. Billionaire Developer Ben Ashkenazi with Feud with Investor Over Reputation, Cash “Billionaire real estate developer Ben Ashkenazy claims the family behind the bankrupt retailer Century 21 has diverted money for his own personal use.” (The Real Deal)
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