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12 Must Reads for the CRE Industry Today (Nov. 4, 2020)

Big real estate investment funds are delaying investor redemption requests, reports the Wall Street Journal. Commercial real estate developers will find it hard to secure property insurance until the 2020 election is settled, according to GlobeSt.com. These are among today’s must reads from around the commercial real estate industry.

  1. CRE Projects Will Find It Hard to Get Insurance Until Election Is Settled “Several of the nation’s largest commercial property insurers have put moratoriums on new insurance policies and renewals due to potential election-related ‘civil unrest.’” (GlobeSt.com)
  2. Real Estate Slump Forcing Big Funds to Delay Investor Redemption Requests “Some of the most conservative real-estate funds are suffering from falling property values, putting their fund managers in a tough spot as investors look to cash out. These real-estate investment vehicles are known as “core” funds because they buy higher quality properties and limit their debt. The biggest core funds have raised billions of dollars from pensions and other institutional investors that seek steady, lower risk returns.” (Wall Street Journal)
  3. Single-Tenant REITs to Merge, Creating $5.8B Portfolio “Griffin Capital Essential Asset REIT (GCEAR) and Cole Office & Industrial REIT (CCIT II) agreed to merge, with GCEAR acquiring CCIT II for approximately $1.2 billion in a stock-for-stock transaction. The merger would combine similar portfolios of single-tenant, office and industrial properties to create a 31-million-square-foot portfolio valued at $5.8 billion. The agreement follows a proposal Phoenix-based CCIT II’s board received from El Segundo, CA-based GCEAR during a “go-shop” period as part of a merger agreement with CIM Real Estate Finance Trust (CMFT).” (Connect Commercial Real Estate)
  4. If Restaurants Go, What Happens to Cities? “By Aug. 31, over 32,000 restaurants and 6,400 bars and nightspots that had been open on March 1 were marked closed on Yelp. In New York City — perhaps the nation’s dining-out capital — a survey by the Hospitality Alliance found that 87 percent of restaurants were not able to pay all of their August rent. In September, the New York state comptroller estimated that one-third to one-half of the 24,000 restaurants in the city could close permanently over the next six months.” (The New York Times)
  5. Tired of Trump, Deutsche Bank Games Ways to Sever Ties with the President—Sources “In meetings in recent months, a Deutsche Bank management committee that oversees reputational and other risks for the lender in the Americas region has discussed ways in which it could rid the bank of these last vestiges of the relationship, two of the three bank officials said. The bank has over the years lent Trump more than $2 billion, one of the officials said.” (Reuters)
  6. CBL & Associates, PREIT Bankruptcies Show Coronavirus Toll “As the U.S. gears up for the holiday shopping season, a pair of bankruptcies involving the operators of nearly 130 retail properties highlights the ongoing financial toll of coronavirus-related disruption of the nation’s malls. CBL & Associates Properties Inc., one of the largest retail owners in the U.S., filed for Chapter 11 bankruptcy protection on Sunday, with a proposed restructuring that would slash debt by at least $1.5 billion.” (Commercial Property Executive)
  7. Lodging and Retail Reach Highest Delinquency Rates in CMBS History “During the great financial crisis, CMBS distress took a while to play out. CMBS delinquencies and special servicing rates didn’t reach their peak of 10.3% and 13.4% until mid-2012, according to Trepp.” (GlobeSt.com)
  8. MOB Portfolio Trades for $240M “The Sanders Trust and Harrison Street have sold an 11-property portfolio composed of medical office buildings and inpatient rehabilitation facilities. Lincoln Property Co.—through Lincoln Advisors—spent $240 million to acquire the assets on behalf of a public pension fund client. Located across Texas, Ohio, Maryland, Georgia, Mississippi and Iowa, the collection adds up to 474,100 square feet.” (Commercial Property Executive)
  9. Thor Equities Delinquent on $105M Loan Tied to Scribner Building “Joseph Sitt’s Thor Equities has missed two months of payments on a loan tied to the Charles Scribner’s Sons Building in Midtown, the latest in a series of setbacks for the prolific retail real estate investor. Thor is now 60 days delinquent on a $105 million loan tied to the property at 597 Fifth Avenue, according to Trepp, which provides data on CMBS loans.” (The Real Deal)
  10. KayoCloud Launches Virtual, Cloud-Based CRE Brokerage “After partnering with traditional firms over the past two years in stealth, New York-based KayoCloud is now offering its software and machine learning technology directly to individual brokers. The virtual commercial brokerage is launching with over 15 agents –– many of whom used the technology at their previous firms. KayoCloud claims that its brokers ‘benefit from increased efficiency and deal flow while having the convenience and flexibility to work anywhere, anytime.’” (finLedger)
  11. Netflix Landlord in Bushwick Snaps Up Property Across the Street “The investors who brought a Netflix soundstage to Brooklyn just picked up another property nearby — a sign that they could be eyeing an expansion for the popular production and streaming company. Joseph and Glenn Lostritto’s Steel Equities recently bought the large warehouse at 375 Johnson Avenue in Bushwick for $20 million, sources told The Real Deal.” (The Real Deal)
  12. Coronavirus Study in Germany Offers Hope for Concertgoers “Researchers in Germany may have some good news for frustrated concertgoers across the world whose activities have been constrained by the spread of the coronavirus. Analysis of an indoor concert staged by scientists in August suggests that the impact of such events on the spread of the coronavirus is ‘low to very low’ as long as organizers ensure adequate ventilation, strict hygiene protocols and limited capacity, according to the German researchers who conducted the study.” (The New York Times)
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