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10 Must Reads for the CRE Industry Today (April 7, 2021)

Big corporate tenants are staying in city centers, but they are downsizing and looking for bargain rents, reports the Wall Street Journal. Curbed asks whether the Compass IPO is just another iteration of the WeWork story. These are among today’s must reads from around the commercial real estate industry.

  1. Local Alliances Put Some Cities on the Fast Track to Recovery “As vaccination rates increase and businesses start to reopen, cities across the country are cautiously moving forward with economic recovery plans to coax workers back into offices and revive real estate markets pummeled by the pandemic. Some midsize cities — like Austin, Texas; Boise, Idaho; and Portland, Ore. — may be poised to rebound faster than others because they have developed strong relationships with their local economic development groups.” (The New York Times)
  2. After COVID-19, Office Leases Largely Come with Bargain Rates “Big companies are making plans to stick with city-center office buildings, but they are cutting back on space and driving down rent prices for years to come, according to an analysis of U.S. office leasing trends prepared for The Wall Street Journal. The Journal’s leasing information comes from the data firm VTS, which tracks tens of thousands of negotiations across the U.S. between landlords and tenants. Landlord and tenant discussions in seven of the largest office markets offer an early glimpse into the evolving workplace strategies for hundreds of companies after a year of largely remote work.” (Wall Street Journal)
  3. American Dream’s Owner Defaulted. That Could Cost It Revenue from Other Malls “Triple Five Group defaulted last year on mortgage payments for American Dream after the mall closed for months during the pandemic and many retailers failed to make full rent payments. That default enables Triple Five’s lenders to seize their collateral: 49% of the revenue generated by the developer’s Mall of America in Bloomington, Minn., and West Edmonton Mall in Canada, two of the largest and more successful malls in North America.” (Wall Street Journal)
  4. Federal Low-Income Housing Grant Doubles in Size This Year “Thanks to a coronavirus pandemic-fueled mortgage boom, states will get nearly $700 million in federal grants from a special program for low-income housing, more than double the amount distributed last year. It’s a boost that the Department of Housing and Urban Development says should produce a tangible leap forward in government low-income housing plans across the country. The Housing Trust Fund, administered by the department, will disburse the money to state governments for the construction, maintenance and restoration of low-income housing.” (Associated Press)
  5. Bid to Open NYC Casino Emerges in State Budget Talks “A bid to open a new casino in Manhattan or another part of New York City has emerged in 11th hour talks between Gov. Andrew Cuomo and legislative leaders to finalize the overdue state budget, sources told The Post Monday night. Legislative sources said Cuomo was behind a proposal that included the creation of a “community advisory board” in New York City to weigh on a site for a casino in the Big Apple, potentially in Manhattan.” (New York Post)
  6. Consumers Spent $900 Billion More Online in 2020. Here’s Who Will Keep the Biggest Gains “Consumers across the globe spent $900 billion more at online retailers in 2020 compared with the prior two-year trend, according to a report released Tuesday by the Mastercard Economics Institute. Shoppers are heading back to restaurants and returning to stores to buy clothes and shoes in person. Yet they will continue to stock their fridges and hunt for good deals online — a sticky habit developed during the pandemic, according to the report.” (CNBC)
  7. What If Compass Is Basically Like Every Other Real Estate Brokerage? “Skeptical observers saw Compass more like a residential analogue to WeWork — a well-financed, stylish start-up with a business model that, when you squinted past the marketing, didn’t seem all that different from what came before and certainly didn’t merit such a lofty valuation. The IPO was an opportunity for disinterested investors to assess the shares and would provide clarity. And yet the market’s verdict, in the hours after Compass’s founders rang the opening bell, was a resounding We’re not sure.” (Curbed)
  8. New York: Plans to Erect Giant Penn15 Skyscraper Raise Eyebrows “Plans hang on New York budget negotiations as Cuomo accused of attempting to railroad the state into allowing the development.” (The Guardian)
  9. California Aims to Fully Reopen the Economy June 15 “Officials emphasize that California's widest reopening hinges on two factors: a sufficient vaccine supply and stable and low numbers of hospitalizations.” (Los Angeles Times)
  10. Dick’s Sporting Goods Unveils New Store Concept—Complete with Outdoor Track “The nation’s largest sporting goods retailer will debut a new concept, called Dick’s House of Sport, at Eastview Mall, in the Rochester suburb of Victor, New York, on April 9.  Described as a place to “connect and play,” the 100,000-sq.-ft. store offers customers a hands-on shopping experience and features a rock-climbing wall, a high-tech batting cage and a 17,000-sq.-ft. outdoor turf field and running track where Dick’s will host sports events.” (Chain Store Age)
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