This weekly selection of real estate and community development articles is distributed by H. Pike Oliver. Inclusion of articles does not imply endorsement. Some links lead to items that are behind a paywall.
The US economy is on track to suffer a heavy blow from the coronavirus crisis in the second quarter, according to several GDP nowcasts compiled by CapitalSpectator.com. A hint of the macro loss was previewed in the Q1 data, which reflected 4.8% decline. But new estimates for Q2 point to a far bigger contraction unfolding in this quarter. The median Q2 nowcast is an extraordinarily steep 31.6% decline. A loss of that magnitude would be the biggest quarterly decline by far in the post-World War II era.
Irvine, Calif.-based Ten-X was launched in 2009 with the goal of providing a digital platform to complete commercial real estate transactions during the Great Recession. Since its founding, nearly $24 billion worth of commercial real estate transactions have been completed on the site. Companies such as Fannie Mae, Bank of America, JP Morgan Chase, Blackstone, Starwood, BlackRock, Capital One, MetLife, LNR, UBS and PNC have used the website to complete transactions.
Washington, D.C.-based CoStar Group operates commercial real estate transaction sites CoStar.com and LoopNet.com, which combined to have 10 million visitors in April. After the acquisition, CoStar Group plans to integrate the Ten-X platform into both LoopNet and CoStar.
J.C. Penney filed for Ch.11 bankruptcy May 15. Shareholders are not going to get any recovery under the terms of the Restructuring Support Agreement (RSA.) Given the extreme uncertainties of the current economy and that only 70% of the first lien creditors currently support the RSA, it is possible that they might fail to meet either one of these conditions resulting in the closure of all 1,100 stores.
As many as 150,000 to 200,000 restaurants nationwide may never fully reopen again after the COVID-19 pandemic subsides, according to estimates from the National Restaurant Association. This represents 15 to 20 percent of all U.S. restaurants.
Though the metro Atlanta area’s restaurants have been allowed to reopen their dining rooms for a full two weeks following Georgia Gov. Brian Kemp’s directives in late April, early indications are that a large swath of operators are choosing to keep them closed and focus on takeout, delivery and catering.
Other restaurateurs are making the hard choice to close their eateries permanently. As a result, there will be a wave of second-generation restaurant space that will need to be absorbed before new restaurants are built en masse.
Federal Realty is rolling out new dedicated pickup spaces at 65 properties in the coming weeks, with plans to expand to its full, 104-property portfolio. The program, branded as The Pick-Up, allows customers to place an order and select a dedicated curbside space to receive their food without any person-to-person contact. Each property will have multiple Pick-Up areas in front of various retailers, and each area will feature about three dedicated spaces. Clothing stores and other soft goods retailers will also participate in the program, allowing customers to order products and pick them up without entering the store.
Two creditors slashed their combined valuation of the debt by more than a third in regulatory filings. The moves lend credence to a report that Sur La Table, owned by the private equity firm Investcorp, is headed for a bankruptcy reorganization or sale.
Even after the crisis eases, companies may let workers stay home. That would affect an entire ecosystem, from transit to restaurants to shops. Not to mention the tax base, especially in places like New York City.
ZDNet’s Larry Dignan moderated a panel on the new normal for work – as part of CNET’s Now What series – with executives from Stanley, Black and Decker, eXp Realty, and Facebook’s Workplace. It looks like “traditional” companies are having a better than anticipated experience with remote work.
Coronavirus introduces a new challenge to the primacy/tyranny of the open office. In the short term, architects, designers, property managers and public health professionals saythat pretty much every aspect of this kind of workspace will have to change, to get fewer people inside it at a time. But don’t mourn — or celebrate — its death yet: A pivot to walls is probably still a long way away.
When employees file back into American workplaces, many will find the office transformed: single-person elevators, closed cafeterias and desks separated by plastic. And many of these changes won’t go away until the virus does.
Even though weekly net new orders have improved in recent weeks, PulteGroup (NYSE:PHM) is cutting costs through layoffs, furloughs, and other measures as order rates for the month of April are still down about 50% year over year.
Despite continuing concerns about how the pandemic will be resolved, along with concerns about job losses and other economic impacts, sales rebounded in mid-April. This is providing master-planned community developers reason for optimism for the balance of May and June as stay-at-home orders begin to lift and States begin re-opening. There is evidence of “flight” from area density neighborhoods and regions to lower density planned communities.
The National Multi Housing Council’s Rent Payment tracker currently indicates that 80% of Apartment households paid rent as of May 6th, only a 1.5% decrease over May 2019 numbers. A sign that despite the high levels of unemployment, renters who can pay are stepping up and doing so.
Council President M. Lorena González, who sponsored the ordinance, emphasized it’s not an extension of the mayor’s moratorium and does not prohibit landlords from taking steps to evict people. Instead, tenants are shielded if they can show their failure to pay rent is related to the pandemic. But few landlords will start the eviction process knowing a tenant could plead Covid-related distress.