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11 Must Reads for the CRE Industry Today (June 25, 2021)

A large percentage of restaurants won’t be able to pay their June rent, reports Restaurant Dive. A Forbes Real Estate Council article argues that higher inflation will drive more money into property investments. These are among today’s must reads from around the commercial real estate industry.

  1. Biden Appoints New FHFA Director “The White House didn't waste any time after a Supreme Court ruling allowed it to do so, removing Mark Calabria as Director of the Federal Housing Finance Agency (FHFA) late Wednesday. Earlier that day the Court had released their 7-2 ruling that the inability to remove the agency director during a five year term except for cause was a violation of the Constitution's separation of powers.” (Mortgage News Daily)
  2. Top U.S. Officials Consulted with BlackRock as Markets Melted Down “While some conversations were previously disclosed, the newly released emails, together with public calendar records, show the extent to which economic policymakers worked with a private company as they were drawing up a response to the financial meltdown and how intertwined BlackRock has become with the federal government.” (The New York Times)
  3. 39% of Restaurants Can’t Afford June Rent, Report Finds “This data marks an improvement from May's report, which showed that 49% of restaurant owners could not cover rent and a big jump from December, in which 61% couldn't pay rent. However, the number of businesses unable to pay rent in June increased in New York, Virginia, Arizona, North Carolina and Florida.” (Restaurant Dive)
  4. NYC Office Tenants Turn Away from Short-Term Renewals “In the depth of the pandemic last year, a majority of New York City office tenants facing lease expirations didn’t want to commit to a long-term deal. Instead, they opted for shorter extensions. The number of short-term renewals — defined as a deal shorter than five years — was up 46 percent in 2020 compared to the year before, according to a CBRE market report.” (The Real Deal)
  5. Why Inflation Concerns Will Drive Money Into Property Investment “No one has a crystal ball for how bad inflation will be over the next five to 10 years. Still, when thinking about how to invest, it’s safe to assume that in a best-case scenario we’ll see modest inflation over the next decade, and in a worst-case scenario we’ll see significant inflation that effectively diminishes people’s savings. Given this reality, the question for people with money to invest becomes: Where’s the best place to put your money with moderate to significant inflation on the horizon?” (Forbes Real Estate Council)
  6. Rent Guidelines Board Adopts Partial Rent Freeze “Rents will be frozen for the first six months of a new one-year lease then go up by 1.5% for the remainder of the year, while rents for two-year leases will increase by 2.5% from the start.” (Crain’s New York Business)
  7. Darden Restaurants CEO Says Speculation Is Driving Up Real Estate Prices “Darden Restaurants isn’t seeing many deals on real estate right now despite the high number of permanent restaurant closures from the pandemic. ‘There’s tremendous speculation in the real estate market driving prices,’ CEO Gene Lee told analysts on Thursday during the company’s quarterly earnings call.” (CNBC)
  8. Many People Don’t Want to Work Unless it’s From Home “If you’re one of the approximately 50 percent of Americans who worked remotely during the pandemic, you’re probably wondering if remote work is in the cards after the pandemic is over. The vast majority of people say they’d like to work remotely at least part of the time, but that desire is running up against the reality of there being fewer remote jobs than there are people who say they want them. Only about 10 percent of jobs on popular hiring platforms include remote work.” (Recode)
  9. Residential Building Near Miami Beach Partially Collapses “A search-and-rescue effort involving firefighters, police officers and search dogs was underway on Thursday after a high-rise residential building just north of Miami Beach partially collapsed. At least one person was killed, the police said. Florida’s governor said officials were bracing for ‘bad news.’” (The New York Times)
  10. Architect Richard Meier Retires “Following a series of high-profile departures from his firm and allegations of misconduct, architect Richard Meier has retired. George Miller, the former managing partner of Pei Cobb Freed & Partners, will join the firm as chief operating officer and partner, and Dukho Yeon, a 30-year veteran of Richard Meier & Partners, was also named partner and is taking over as lead designer.” (The Real Deal)
  11. Get an Early Look Inside Apple’s Newest Store That’s Opening in an Iconic Theater After a Meticulous 3-Year Renovation Effort “Apple offered an early look at its newest retail store location at the historic Tower Theater in downtown Los Angeles before it opens to the public on Thursday. The project was first announced almost three years ago, and the renovation involved manually removing layers of paint and delicately restoring architectural features that are nearly a century old.” (Insider)
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