The week in global real estate - 26 May 2020

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A weekly update of the biggest real estate news from around the globe.

Institutional investors / REITs

  • NAREIT announced the level of rent collected by United States’ REITs was about the same in May as it was in April. Industrial REITs received 96%, apartment REITs 95% and office REITs 92%. Retail REITs have been the hardest hit, collecting 70% for freestanding properties and 48% for shopping centres. More info here.
  • Moody's is reporting $32B of commercial property loans in the United States were in special servicing during May. Special servicing is when borrowers seek relief on loans bundled into mortgage-backed securities. More info here.
  • Student accommodation investors in the United States may be impacted by more colleges running online classes. More info here.
  • Goldman Sachs has launched a $2.75B fund targeting cash-deprived secondary investors who require funds to continue through the coronavirus crisis. More info here.

Office

  • Microsoft’s CEO has warned against permanent work from home. He warned in an interview that permanent working from home could negatively impact social interactions and mental health. More info here.
  • Citigroup is considering suburban offices to accommodate employees who are too nervous to commute into downtown Manhattan. More info here.
  • Facebook is considering a long-term move towards more work from home. The move might take 5 to 10 years to implement. More info here.
  • Facebook is planning remote work hubs in Dallas, Denver and Atlanta. More info here.
  • Mastercard is allowing staff to work from home until a COVID-19 vaccine becomes available. They expect their offices will be operating at 30% capacity for the foreseeable future which may create opportunities to consolidate their footprint. More info here.
  • Shopify is moving the vast majority of its employees to permanent remote work. More info here.
  • Twitter’s CEO will allow staff to continue working from home permanently. He said the past few months had proven their work from home model, so employees with suitable roles are welcome to either work from home or Twitter’s offices. More info here.
  • Uber is cutting 3,000 more jobs, less than two weeks after an initial round of layoffs. They are also planning to shut or consolidate 45 offices around the world. More info here.
  • The Wall Street Journal has speculated that the popularity of shared coworking offices might reduce in the aftermath of the coronavirus. More info here.
  • Building owners in the United States are reviewing continuous disinfection technology to assist with office hygiene. More info here.
  • Singaporean lobby group Fair Tenancy Framework Industry Committee has proposed setting up the Fair Tenancy Committee to provide more equitable sharing of information between tenant and landlords, such as rental and performance data. More info here.
  • Amazon has created a homeless shelter inside one of its headquarters buildings in Seattle. More info here.

Retail

  • Victoria’s Secret is planning to close 250 of their 1070 stores in the United States. More info here.
  • Department store owner JCPenny is planning to create a REIT with its real estate assets as part of its bankruptcy restructuring. More info here.
  • The Mall of America has missed two months of mortgage payments on its $1.4B mortgage. More info here.
  • Wesfarmers is closing 75 Target stores in Australia and converting 92 into Kmart stores as part of a massive restructure. More info here.

Sustainability

  • Start-up urban farming firms are proposing use of underground spaces in cities for farming. Examples include using underground car parks to grow mushrooms and endives. More info here.
  • The Trump administration has ended a two-year rent holiday for solar window projects on federal land. Operators are also facing retrospective rent bills. More info here.

Related Experts

Chris Farhi

Director | Strategic Advisory

Auckland CBD

Chris is a Director within the Strategic Advisory team. The team helps you with your big property decisions and complex transactions.

Chris' advisory work focuses on:

  • Decision making processes (eg property strategy, business cases, feasibilities, etc)
  • Tenant representation for large lease transactions (office,  industrial and specialist-use)
  • Multi-site networks (eg consolidation strategies, optimisation, etc)

Chris’ background in brief:

  • Property strategy advisor for some of New Zealand’s most successful private sector, public sector and non-for-profit organisations.
  • Tenant representative (tenant-paid lease negotiator) for organisations ranging from small-to-medium enterprises through to major listed companies and government agencies.
  • Specialist skills in commercial leasing, financial analysis and market research.
  • Part-time lecturer at the University of Auckland Business School and commercial leasing trainer for the Royal Institution of Chartered Surveyors.

Chris’ qualifications include Honours degrees in both Civil Engineering and Property from the University of Auckland, and a Master of Philosophy from the University of Cambridge, UK. He is a Chartered Member of the Royal Institution of Chartered Surveyors.

Outside of work, Chris is a combat engineer in the NZ Army Reserve and a keen baker.

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