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Nine Must Reads for the CRE Industry Today (July 13, 2020)

Commercial real estate companies have been hiring infectious disease experts to help evaluate their properties, reports Fast Company. Small businesses may use new bankruptcy laws to get out of leases, according to the Wall Street Journal. These are among today’s must reads from around the commercial real estate industry.

  1. The hottest job in commercial real estate? Infectious disease expert “He says the big challenge facing office buildings going forward will be their HVAC systems – heating, ventilation and air conditioning. Scientists and public health officials are in wide agreement that the virus is transmissible through respiratory droplets – droplets that can slip through HVAC filters and spread widely throughout buildings, increasing the risk of infection.” (Fast Company)
  2. Burger Chain Turns Pioneer for New Small-Business Bankruptcy Law “Bankruptcy lawyers expect a surge in small-business failures in the coming months. The new law, they say, will make many business owners realize that filing for bankruptcy might be a better option than struggling for years to dig out of a financial hole, especially with the outlook so unpredictable.” (The Wall Street Journal)
  3. CRE Asks: What Happens To The Bottom Line When Unemployment Benefits Run Out? “As federal and state support for the pandemic-stricken economy wobbles, a mass of multifamily evictions looms, and much of the impact would be felt by demographics already under extreme economic stress, like communities of color.” (Bisnow)
  4. Forget Big Cities. Firms, Investors Set Sights on Smaller Markets “Residents increasingly are opting for secondary and tertiary markets over metropolises with companies and investors following suit. Smaller areas are boasting more big company relocations and a bigger chunk of commercial real estate deals, according to a Marcus & Millichap report. For example, Apple is working on an office in Austin while Amazon plans to open one in Nashville and Deloitte in Phoenix.” (GlobeSt.com)
  5. Sam Zell: U-Shaped Recovery Will Likely Begin In The Fall “’At best, and most likely, we're going to see a U-shaped recovery,’ Zell said. ‘We've basically improved somewhat, I think we're going to have kind of a slow period improving toward the end of the year, that's very different from a radical V-shaped, 'Oh, we were hurt and now we're better.'" (Bisnow)
  6. City of Los Angeles unveils new assistance program for at-risk renters “The Emergency Renters Assistance Program was created to offer rent relief for eligible renters in Los Angeles with up to $2,000 in subsidies per household for two months ($1,000 each month that will be paid directly to the landlords). If the landlords accept the funds, they are agreeing to: drop charge interest or late fees that the tenant owed, not evict the tenant for six months after whenever the city emergency order expires and not enact rent increases for a year after the order expires.” (Asian Journal)
  7. The Outsized Role Simon Property Group May Play in the ‘Retail Reset’ “For center owners and retail REITs that represents the sucking sound of cash flowing in the wrong direction. That, combined with the near-daily retail chapter 11 filings exemplifies an industry under extreme stress. Obsessive observers (like myself) also probably noticed an inordinate amount of news in recent weeks involving Simon Property Group.” (Forbes)
  8. ULI Americas Names New Chairman “ULI Americas has appointed Jonathan Brinsden as Chairman. He succeeds Jack Chandler, founder of Majesteka Investment Holdings and is slated to serve on a voluntary basis for two years. Brinsden is currently the chief executive officer of Midway.” (Commercial Property Executive)
  9. Brooks Brothers Is the Latest Apparel Company to File for Bankruptcy -- Is Macy's Next? “The rise of online shopping has taken a terrible toll on department stores, which depend on in-store customer traffic to move huge amounts of inventory and justify their rent. While brick-and-mortar heavyweights like Macy's and Nordstrom have generally been successful in building e-commerce channels to complement their traditional stores, they've still been left with heaps of income-eating real estate.” (The Motley Fool)
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