A survey of U.S. real estate investment trusts (REITs ) representing six different asset classes found that across the board, rent collection rates for the months of April and May displayed minimal variance. Washington, D.C.-based National Association of Real Estate Investment Trusts (NARIET), which provides research and data for these institutional firms, conducted the survey. The survey highlighted rent collection data for 43 REITs in the industrial, multifamily, office, healthcare and retail sectors, with separate data for two sub-categories of retail. The sample represents 63 percent of total equity market capitalization of all publicly traded REITs for those property sectors, based on the FTSE NAREIT All REITs Index.
The graph shows housing production across the United States since 1968. The largest drop was the huge collapse from 2006 to 2009 following the housing bubble prior to the Great Recession. After that, there was an eventual (but still historically low) recovery that lasted into Q1 2020 followed by the onset of the coronavirus related drop in production.
Just over a decade ago, a booming Phoenix area market experienced a confluence of trends — rampant overbuilding, followed by a national economic crisis that meant a spike in unemployment and a near halt in population growth. One of the biggest commercial real estate downturns in the region’s history soon followed. Ten years later, however, the picture is quite different.
Phoenix multifamily metrics were solid through the first quarter of 2020 and supported by some of the strongest employment and household growth in the nation. The economy today is much more diverse than it was 10 years ago during the last downturn. Workers can now choose among a variety of corporate, financial, education-based and tech employers while enjoying a lower cost of living than their peers in other metropolitan areas. The greater Phoenix metropolitan area of 2020 is grounded in a broader and more sustainable mix of favorable long-term market conditions.
After suffering the greatest performance declines in the history of the U.S. lodging industry during 2020, CBRE foresees demand for U.S. lodging accommodations returning to pre-crisis levels in the third quarter of 2022. But it will take longer for revenue to recover. A lag in ADR (average daily rate) growth will likely delay the recovery in RevPAR (revenue per available room) until 2023.
The short-term rental market is reeling from the coronavirus-driven tourism collapse. Can the industry’s dominant player stage a comeback after lockdowns lift?
At the beginning of May, the company was forced to lay off 25% of its staff, nearly 1,900 individuals. CEO Brian Chesky told employees that its 2020 revenue will be less than half of what the company earned in 2019.
Retail was already a sector in flux, and then the coronavirus hit. In many cities, the coronavirus is hastening the retail sector’s struggles, with casualties like J. Crew and Gold’s Gym likely among the first of many. But it is also accelerating some of its progress. New retail construction had already slowed in anticipation of the sector continuing to lose market share to e-commerce, he said. Out of 62 markets tracked ahead of this year, CBRE Econometric Advisors expected all but four to see positive net absorption as a result of limited new construction.
In 2015, Facebook employees were offered an unusual perk: a cash bonus of at least $10,000 if they moved within 10 miles of the company’s suburban Menlo Park, Calif., headquarters. The lure was typical at the time for the social media giant, which had just completed a new office building that placed thousands of employees in one giant room.
Five years—and a pandemic—later, Facebook is retreating from the idea that employees need to work close together to thrive. Facebook CEO Mark Zuckerberg said Thursday that it would begin allowing some employees to work from home permanently, with the expectation that around half of Facebook’s 48,000 employees will be working remotely in five to 10 years.
The move is likely to reverberate across the tech industry, whose identity for more than half a century has been tied to the notion that its success comes from having employees work in close proximity.
By the end of 2019, the commercial real estate market reports pegged downtown office vacancy rates at 10% on average. But Heather Jordan Garety points out that the actual use of office space has been declining in recent years. She suggests that a better measure of actual use of office space is Office Space Foot Traffic–the percentage of employees assigned to a building (or seats) compared to the number of employees that come to the office each day. This figure had declined to around 50%, or less by the end of 2019. This suggests that prior to the COVID-19 pandemic, there were “occupied buildings” with relatively few people working in them.
According to a new survey of homebuyers and sellers from Redfin, 1 in 4 newly-remote workers expect to continue to work remotely once shutdowns end, and over half of respondents would move if they never had to go into an office. The primary reason cited by people in New York, San Francisco, Boston and Seattle for wanting to leave: to live somewhere less expensive. New York had the largest share—40%—of people looking for relief from high costs, with San Francisco in close second at 36%.
Steve Felix interviewed Barry Ziering, Ph.D., who joined UK based M&G Investments in 2019 and leads the firm’s North American real estate branding and capital raising efforts. Prior to M&G, Barry led those same efforts for Guggenheim Real Estate (2014-2018) and Blackrock (2002-2014). He was also a voting member on those firms’ investment committees. Prior to joining BlackRock, he worked at Prudential Financial (PGIM) and Prudential Securities in a variety of roles including real estate merchant banking, strategy and research.
A growing number of cities are turning streets over to pedestrians and cyclists to reduce crowding and ease pollution, which appears to aggravate the impact of the virus. In the longer term, urban planning experts say the pandemic could lead to more fundamental changes to cities as they aim to become more resilient to future outbreaks. Go to the article for a round-up of what different cities are doing.