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10 Must Reads for the CRE Industry Today (July 16, 2021)

The movement of white collar professionals back to major gateway cities is upending predictions from earlier in the pandemic, according to multiple publications. CEO preferences are what’s driving the way companies are returning to the office in many cases, reports Reuters. These are among today’s must reads from around the commercial real estate industry.

  1. Tech Workers Swore Off the Bay Area. Now They Are Coming Back. “Bumper-to-bumper traffic has returned to the region’s bridges and freeways. Tech commuter buses are reappearing on the roads. Rents are spiking, especially in San Francisco neighborhoods where tech employees often live. And on Monday, Twitter reopened its office, becoming one of the first big tech companies to welcome more than skeleton crews of employees back to the workplace.” (The New York Times)
  2. Co-Working Spaces Are Back. And There Are Many, Many Options “It would be easy to assume that the pandemic had dealt a final blow to co-working spaces. Instead, they are doing just fine, taking advantage of pent-up remote workers and a very confused commercial real estate sector. The Wing and WeWork, both of which endured recent public relations disasters — the former with charges of casual racism and the latter imploding after being significantly overvalued — are reorganizing, with memberships on the upswing.” (The New York Times)
  3. M.B.A. Programs from Stanford to Columbia and NYU Pass on Hybrid Learning “Several high-profile M.B.A. programs have decided not to offer hybrid learning this fall. Columbia University, Boston University, Stanford University, New York University and University of California, Berkeley, among others, are recalling virtually all business-school students to campus this fall for in-person classes. The hope, deans say, is to restore the traditional two-year M.B.A. experience to its pre-pandemic norms, with the in-person networking, socializing and overseas trips that students say make the expensive management degrees worthwhile.” (The Wall Street Journal)
  4. Life Companies’ Expanding Role in Multifamily Finance “With continued low interest rates, it has been a solid year for multifamily acquisition, development, refinancing and renovation, mostly funded by Fannie Mae and Freddie Mac. First-quarter 2021 multifamily mortgage debt grew by almost $30 billion, to $1.7 trillion, from fourth-quarter 2020, according to the Mortgage Bankers Association, and government-sponsored enterprises accounted for 80 percent of that increase.” (Multi-Housing News)
  5. New York’s Retail Rents Set Another Record Low, But Restaurants Are Starting to Sign Leases Again “Industry tracker Datassential found that more than a 10th of U.S. restaurants — or roughly 80,000 locations out of about 779,000 eateries — have closed permanently since March 2020. Other businesses view the carnage as an opportunity to enter the market for the first time. Mezeh Mediterranean Grill, an Annapolis, Maryland-based chain serving Greek-inspired dishes, just signed its first lease in Manhattan. La Casa Del Mofongo, a Latin restaurant and nightclub, signed a 10-year deal on a 15,000-square-foot space close to Herald Square, CBRE said.” (CNBC)
  6. Back to the Big Apple: Residents Start Flocking Back to NYC and LA “Residents have started flocking back to New York City and other urban areas, tempering fears that the coronavirus pandemic and increased work from home heralded the death of large cities, according to new data from TaskRabbit. The Big Apple was ranked first for most move-ins in 2021 by TaskRabbit, an online platform for home repairs, moving and delivery services.” (Commercial Observer)
  7. Return to the U.S. Office? Ask the CEO “The questions of if, when and how often white-collar employees should again work in the office have been vexing corporate America ever since COVID-19 vaccinations became available. Once safety hurdles were cleared, CEOs began to craft policies based on culture and business needs. Now even companies in the same sector often take different approaches, underscoring how the personal preferences of their bosses are informing these key decisions.” (Reuters)
  8. Office Landlords ‘Can’t Go Through the Motions,’ Must Engage Tenants in Return Push “Tenant expectations are high for the properties they are returning to. Landlords need to meet those expectations to fill offices again, Bisnow panelists said.” (Bisnow)
  9. Washington, D.C. Landlord Campaigned Against Racial Bias “The U.S. State Department had an embarrassing problem in 1961: Newly independent African countries were sending diplomats to Washington, D.C., and landlords were refusing to rent apartments to those Black envoys. The department summoned several dozen landlords in July 1961 and asked them to provide housing for the diplomats. It was pitched as a matter of national security: America needed to make friends with emerging nations. Among the few landlords who immediately volunteered to open up their buildings was Norman Bernstein, the son of Jewish immigrants from Lithuania.” (The Wall Street Journal)
  10. Five Black Women Start Real Estate Syndicate Based in DeKalb County “During the throes of the coronavirus pandemic, Georgia State Representative Dar’Shun Kendrick had an idea to help people raise capital, with the hopes of generating Black wealth. Kendrick, an attorney by trade, is an expert in raising capital. After much thought, Kendrick had a call with a dozen individuals. After the call, four remaining Black women were interested in her idea. What resulted was the formation of Dollar Empowered Community, LLC (D.E.C.), a real estate syndicate with five principals each residing in DeKalb County.” (The Atlanta Voice)
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