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

Percentage rents are outlasting the worst of the COVID-19 pandemic for retailers, reports The Wall Street Journal. New York is following California in lifting almost all pandemic restrictions as partial vaccination reaches 70 percent. These are among today’s must reads from around the commercial real estate industry.

  1. COVID-19 Rent Breaks for Retailers Are Becoming the New Norm “During the worst of the pandemic, many landlords offered deals where ailing retailers paid a percentage of their monthly sales in rent—rather than a fixed amount—to help them survive. Now, this once temporary way of charging tenants looks poised to outlast Covid-19. More shopping-center owners are signing new leases where rent is tied directly to a portion of sales, at least for a period. These percentage-rent leases are especially attractive to newer retailers, offering some flexibility so that they aren’t saddled with large losses as they are starting out.” (The Wall Street Journal)
  2. The Bid-Ask Gap Ignores Pandemic Upheaval “To hear the listing team describe it, 1372 South California Blvd., in downtown Walnut Creek, CA, is the perfect investment property. It is a 25,520-square-foot two-tenant retail property anchored by a strong performing Trader Joe’s and Pet Food Express backed by CVS credit. Sansome Pacific Properties was the seller, represented by Putnam Daily, Lindsey Snider, and Michael Maffia with Preserve West Capital.” (
  3. A Second Life for North Carolina’s Shuttered Factories “Less than a decade ago, the economic malaise in Rocky Mount, N.C., was tangible. Rocky Mount Mills, a big cotton mill that had given the town its identity, had shut down in 1996, costing the area hundreds of jobs. Downtown was deserted. Nobody was hiring. Now, the mill is a bustling complex with restaurants and breweries. It has a small hotel composed of tiny houses on wheels, a wide lawn where concerts regularly take place and a Wiffle ball field.” (The New York Times)
  4. San Jose Real Estate Deal Shows City’s Mall Area Are ‘Premium’ Sites “A newly revamped building in San Jose near Westfield Valley Fair and Santana Row has been bought at a price that reflects what one expert says is the ‘very high premium’ nature of this area. Local real estate investors Brandenburg Properties and SDS NexGen Partners, acting through affiliates, have teamed up to buy a retail and office building at 2910 Stevens Creek Boulevard. Brandenburg and SDX NexGen paid slightly under $17.6 million for the two-story building, according to documents filed on June 14 with the Santa Clara County Recorder’s Office.” (East Bay Times)
  5. NY Lifting Most COVID Restrictions Now That 70% of Adults Are Partially Vaccinated “Under the new policy, all capacity restrictions, social distancing, cleaning and disinfection requirements, health screenings, and contact tracing requirements will now be lifted throughout the state for commercial settings. These include retail, food services, offices, gyms and fitness centers, amusement and family entertainment, hair salons, barbershops and personal care services.” (Gothamist)
  6. Returning to the Office Will Be Hard “The May 2021 update of our survey (Taneja et al. 2021) of 2,500 working-age employees reveals what we have been hearing from dozens of firms. Firms and organisations are increasingly reporting major challenges persuading employees to come back to the office, driven in part by the surging labour market. We see that more than 70% of UK employees want to work from home 2+ days a week, with similar figures in the U.S.” (
  7. People Are Returning to Restaurants, Stores and Hotels. But Not Yet the Office. “Office towers and nearby businesses in central business districts are missing out on the strong economic recovery, largely because the rise in vaccinations and easing of mask restrictions haven’t propelled most employees back to work. Fewer than three out of 10 white-collar employees were working at the office on average in 10 major U.S. cities, including New York, Los Angeles, San Francisco and Washington, D.C., according to Kastle Systems.” (The Wall Street Journal)
  8. REBNY’s First-Ever Diversity Department Feels its Way Along Post-Pandemic “Commercial real estate’s lack of diversity has been one of the industry’s most glaring problems. The real estate industry’s ranks are filled by a largely white and more than 60 percent male population. And, despite an increased push to increase diversity and inclusion in the industry, progress has been slow.” (Commercial Observer)
  9. 27% of U.S. Shopping Centers Are Found in California, Texas and Florida “There are 115,049 shopping centers in the United States and 27% of them can be found in its three most populous states: California, Texas, and Florida. California has the most with 15,285, followed by Texas’s 12,834 and Florida’s 10,843, according to CoStar data presented in the International Council of Shopping Center’s annual State Statistics report.” (Chain Store Age)
  10. Jera Asset Management, Invesco Real Estate Form JV “Invesco Real Estate and Jera Asset Management have formed a strategic joint venture, Mercury Trust, to focus on the current strong industrial markets. Mercury Trust was seeded with almost $500 million of assets across the country that have been acquired or are under contract to be acquired. Invesco, on behalf of an institutional client, made ‘a significant equity commitment for investment in future acquisitions’ through the trust.” (Commercial Property Executive)
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