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16 Must Reads for the CRE Industry Today (Jan. 27, 2021)

The apartment sector is starting to feel the impact from missed rent payments, reports the Wall Street Journal. Ghost kitchens are starting to pair up with hotel operators, according to The New York Times. These are among today’s must reads from around the commercial real estate industry.

  1. Rent Collection Is Down, and Apartment Owners Feel the Squeeze “The apartment business has weathered the Covid-19 pandemic better than most of the real-estate sector. That is starting to change. Owners of multifamily buildings are falling behind on loan payments. Banks view a greater number of rental loans as high risk, and fewer lenders are available to help struggling developers with financing. Eviction protections, lower rent collections and unprecedented declines in the asking rent in some urban markets are also taking their toll on apartment owners.” (Wall Street Journal)
  2. White House Signals It Could Agree to More Narrowly Targeted Stimulus Checks “Brian Deese, President Joe Biden’s top economic advisor, suggested the administration could be open to tweaking eligibility for future stimulus checks. As written, the president’s plan calls for a $400 weekly unemployment supplement, a $15 minimum wage and $1,400 stimulus checks. Deese’s comments on Tuesday came as the president’s $1.9 trillion plan faces critiques by a bipartisan group of lawmakers hoping to reduce its price tag. Biden himself on Monday said he would consider curbing eligibility for the checks if it could help secure Republican support in Congress.” (CNBC)
  3. Averting an Eviction Crisis “In this brief, the authors summarize the size and impact of the wave of evictions that will follow the March expiration of the moratorium. They argue that while the steps that policymakers have taken to date have been helpful, they are not nearly enough given the scale and cost of the problem.” (Urban Institute)
  4. U.S. Equity REITs Pull in $104B in Capital Offerings in 2020 “U.S. equity real estate investment trusts raised a total of $104.01 billion in 2020 through capital offerings, an increase of 2.0% from $101.94 billion collected in 2019. Majority of the capital raised in 2020 came from senior debt offerings at $78.80 billion, while $22.74 billion and $2.47 billion were collected through common equity and preferred equity offerings, respectively.” (S&P Global Market Intelligence)
  5. What Comes After the Mall Apocalypse—A Suburban Restaurant Renaissance, Of Course “The November bankruptcy filing of CBL Properties, the large mall and shopping center REIT, echoes a dreary sentiment for malls, shopping centers and retailers since Covid came on the scene in March. The burgeoning trend toward e-commerce, accelerated by the pandemic, crushed brick-and -ortar traffic in 2020. With 107 properties spanning approximately 67-million square feet across 26 states, CBL’s bankruptcy filing is a telling tale.” (Restaurant Finance Monitor)
  6. Larry Fink’s New Climate Goal “The BlackRock chief’s annual letter to C.E.O.s is going out this morning and Andrew has a copy, which he writes about in his latest column. Mr. Fink’s letter has driven the conversation inside corporate America’s boardrooms for years — such as his proclamation that companies must have a purpose beyond profit, which preceded the Business Roundtable’s statement on stakeholder capitalism, and his call for corporate climate disclosures, which was followed by a raft of climate pledges by companies.” (The New York Times)
  7. Last-Mile Delivery Problems Hampering Pace of COVID Vaccine Rollout, Distributors Say “The race to provide safe and effective coronavirus vaccinations has been curtailed by logistical problems associated with last-mile delivery, according to executives at two companies helping to distribute inoculations. The mass rollout of vaccines is thought to be the biggest logistical challenge the world has ever seen, with everyone from policymakers to manufacturers grappling with questions over cost, transportation, distribution and equitable access.” (CNBC)
  8. Controversial NYC Hotel Amendment Gets its First Public Hearing “New York’s Department of City Planning held its first public hearing last Friday on the contentious, citywide hotel text amendment, which would require developers to undergo a lengthy special permit process in order to build a hotel anywhere in the five boroughs. The proposal, which is widely seen as a political favor from Mayor Bill de Blasio to the New York Hotel & Motel Trades Council, would force hotel builders to go through a public review process — similar to the city’s nine-month rezoning process — and get approval from the City Council in order to build a hotel.” (Commercial Observer)
  9. Lonely Millennials Who Fled Cities During COVID-19 Turn to Co-Living “Young professionals who fled big cities for small towns during the pandemic are providing an unexpected boost to a type of real estate geared toward communal living. Many of those who left were seeking fresh air, more space and distance from infection clusters, but they also found the prospect of being isolated in the country daunting. So they have been looking for companionship at remote co-living spaces, where tenants rent furnished rooms in big, shared homes.” (Wall Street Journal)
  10. Ghost Kitchens Find a Home in Empty Hotels “The conceit isn’t entirely new: Butler Hospitality, founded in 2016, was one of the first companies to streamline in-room dining by funneling food and beverage service for multiple hotels through a single neighborhood kitchen. Analysts now estimate that fewer than 5 percent of hotels in the United States are operating ghost kitchens from within their properties, but the number is expected to grow.” (The New York Times)
  11. JV Kicks Off $100M MOB Fund “Chestnut Funds and Anchor Health Properties have launched Chestnut Healthcare Fund II, a new investment vehicle centered on the acquisition of medical office buildings and other related health-care real estate assets across the U.S. The $100 million real estate private equity investment fund will seek core and core-plus assets over the next 48 months.” (Commercial Property Executive)
  12. What Last Year’s Biggest Real Estate Lawsuits Mean for 2021 “The pandemic put dramatic litigation in the spotlight last year, and the worst is yet to come, legal experts say.” (The Real Deal)
  13. Amazon Inks Major Office Lease in Boston “Amazon has signed a full-building lease for 630,000 square feet of space within Boston’s 33-acre Seaport project. WS Development is currently developing the 17-story tower and expects construction to be completed in 2024. The building will house more than 3,000 new corporate and technology employees. The project will be located at 1 Boston Wharf Road and will include working space, innovation labs and mixed-use common areas.” (Commercial Property Executive)
  14. Bloomingdale’s Sets ‘Bloomie’s’ Small Store Concept “Bloomingdale’s is launching a small-store concept to help drive expansion, WWD has learned. The new format will be called “Bloomie’s,” long a commonly used nickname for the retailer. The first Bloomie’s — a 22,000-square-foot setting at the Mosaic District two-million-square-foot lifestyle center in Fairfax, Va., near Washington, D.C. — is under construction and is expected to open in fall 2021. The Mosaic District has dining, retail, fitness, beauty, entertainment and residential components. It’s run by Edens, a retail real estate owner, operator and developer.” (Women’s Wear Daily)
  15. Five Key Real Estate Proposals in Cuomo’s Budget “Gov. Andrew Cuomo’s $193 billion budget proposes several provisions that could benefit real estate, but the next two months will determine if any of them survive the legislative gauntlet. New York needs to close a $15 billion deficit, and the pressure is on to raise taxes on the wealthy. Cuomo has been reluctant to do that, however, but allows it would be necessary without ample federal aid.” (The Real Deal)
  16. Google to Use Some Offices as COVID-19 Vaccination Sites “Google plans to turn some of its offices into COVID-19 vaccine clinics as part of its efforts to help people get their shots. The tech titan is working with health-care provider One Medical — which counts Google as one of its biggest investors and customers — to set up vaccination sites at Google buildings, parking lots and open spaces, CEO Sundar Pichai said Monday.” (New York Post)
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