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12 Must Reads for the CRE Industry Today (May 12, 2021)

AAA anticipates a 60 percent uptick in Memorial Day travel this year compared to 2020, reports The Associated Press. Macy’s plans to spend more than $230 million on improving the Herald Square area and it plans to bring in a new skyscraper above its flagship store, according to The Gothamist. These are among today’s must reads from around the commercial real estate industry.

  1. Michigan Is Lifting its Work from Home Mandate After Reaching a 55% Vaccination Rate “Michigan is ending its work-from-home rule after reaching a 55% vaccination rate on Monday. The 55% rate was considered a milestone by Gov. Gretchen Whitmer, the Associated Press reported. Last month she said that when 55% of the state's population aged 16 or above was vaccination, in-person work would be allowed in all industries.” (The Associated Press)
  2. Analysis: CRE Survey Respondents Expect More Office Defaults “In Bloomberg Law’s 2021 Commercial Real Estate Bankruptcy Survey, we asked attorneys which commercial real estate (CRE) property types would see the most defaults in 2021. So far this year, data on delinquent CRE loans show some similarities—and one key difference—when compared with the attorneys’ predictions.” (Bloomberg Law)
  3. L Brands to Spin Off Victoria’s Secret “L Brands Inc. LB -4.56% said it is spinning off Victoria’s Secret to its existing shareholders, a coda in the company’s review process for the lingerie brand after longtime company leader Leslie Wexner stepped aside as chief executive last year. The move, which the company had signaled, will result in the lingerie chain and the faster growing Bath & Body Works operating as two publicly traded companies. It comes after the company’s board evaluated the possibility of either a spinoff or sale of Victoria’s Secret.” (The Wall Street Journal)
  4. AAA Sees a Huge Jump in Travel Over Memorial Day Weekend “AAA officials say travel will increase because more Americans have been vaccinated against COVID-19 — about one-third of U.S. adults — and consumer confidence is growing. The auto club and insurance company said Tuesday it expects more than 37 million people to travel at least 50 miles from home during the holiday weekend, up 60% from last year, which was the lowest since AAA began keeping records in 2000.” (The Associated Press)
  5. Pandemic-Driven Retail Real Estate Owners Should Seek Property Tax Reductions “Retail real estate has been one of the hardest hit markets by the COVID-19 pandemic. State shutdown orders and health guidelines, a shift in retailers’ needs, and tenant bankruptcies have created the perfect storm for declined retail space demand. Landlords have also had to endure government-mandated rent deferrals and holidays geared at assisting tenants.” (The National Law Review)
  6. Commercial Real Estate Sees a Lot in Andrew Yang—and That’s the Problem “During the same week that Andrew Yang released his first television ad, two new polls showed that his early lead in New York’s Democratic mayoral primary had dwindled. In the 30-second spot, Yang pumps his fist on a strip of Chinatown, strolls along the Coney Island boardwalk, shimmies with a Brooklyn drumline, and meets Mets fans outside CitiField in a lively montage that encapsulates his campaign.” (Commercial Observer)
  7. New York Travel Is Down. Plenty of Hotels Are Opening Anyway. “New hotels in New York City are starting to open with the summer travel season fast approaching, testing a market that has been recovering but still faces serious challenges from Covid-19. Data firm STR is projecting that 78 hotels with more than 13,000 rooms combined will open in 2021, the largest year for deliveries in recent memory. While many suffered construction delays during the pandemic and might hold back on their openings, dozens of others are still on track to open this year or early next year.” (The Wall Street Journal)
  8. Hundreds of Colleges Say Vaccines Will Be Mandatory for Fall 2021 “Across the country, a growing number of other colleges and universities have also said vaccinations will be mandatory for the fall of 2021, including California State University and the University of California, which impacts more than 1 million people.” (CNBC)
  9. One Prediction of Returning to Work Post-COVID: ‘Unpredictable and Potentially Chaotic’ “Among the findings: Some 27% of companies haven’t yet committed to a specific arrangement, but hybrid arrangements that mix in-office and remote work are the clear frontrunner so far (63%). Just 6% of companies plan to be fully remote, and 4% plan to return to the office full-time. Seven in 10 respondents said they expected employees to work in the office two or three days a week on average, according to the survey, which was conducted March 11 to April 28.” (MarketWatch)
  10. Barnes & Noble Owner Buys Stationary Retailer Paper Source Out of Bankruptcy “Elliott Investment Management, the owner of Barnes & Noble, said Tuesday it will acquire gift and stationery retailer Paper Source. The acquisition will provide Paper Source with the funding it needs to emerge from Chapter 11 bankruptcy. Barnes & Noble CEO James Daunt will oversee both companies. While the two businesses plan to operate independently, it hinted at possible partnerships in the future.” (CNBC)
  11. Macy’s Will Spend $235 Million to Improve Herald Square, and Bring New Skyscraper to Area “Two years after announcing plans to build a skyscraper atop its landmark flagship location in Herald Square, Macy's on Monday shared new renderings of their plans. The retailer also revealed that it will invest $235 million in the surrounding neighborhood—including new subway entrances and more pedestrian space.” (The Gothamist)
  12. Second Life for Shipping Containers: Selling Bao Buns and Baked Goods “Shipping containers have been heralded as a trend in residential design, where they are used for modular homes, but they’re also winning over commercial planners who have used them to liven up the bars, cafes and restaurants within developments anchored by food halls. When used in industrial areas or port cities, the containers give the projects a sense of community, critical in a pandemic when retailers and restaurants are shutting their doors.” (The New York Times)
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