Features

General Contractor Survey: 27 Percent of Firms Report Layoffs Since Coronavirus Outbreak

by Alex Tostado April 7, 2020

More than a quarter of general contracting firms in the U.S. have reported layoffs due to the nationwide coronavirus (COVID-19) outbreak, a recent study by the Associated General Contractors of America (AGC) found. The survey was conducted from March 30 to April 2 for AGC members. Of the 1,296 respondents, 27 percent said they have had to lay off, furlough or fire employees. The survey was released April 3, the same day the Bureau of Labor Statistics (BLS) released its March job report, in which it reported the U.S. economy lost 701,000 jobs. The BLS found that the construction industry lost 29,000 jobs from February to March. AGC chief economist Ken Simonson notes that the BLS numbers are through March 12, when the COVID-19 outbreak was still in its relative infancy in the U.S. Indeed, AGC’s April 3 survey reflects the fast-spreading response to COVID-19, with 55 percent of firms reporting a delay or stoppage on worksites, a drastic jump from the survey released March 27, when 39 percent of firms reported a delay or stoppage. The survey released March 20 saw a 28 percent slowdown. The most common source of delay or disruption, cited by 35 percent of respondents, …

April 7, 2020

Wide-Ranging Financial Fallout Expected as Seniors Housing Industry Confronts Pandemic, Says Economist

by Alex Patton April 3, 2020

Great uncertainties cloud the immediate outlook for the U.S. economy and the seniors housing industry in the wake of the COVID-19 pandemic. But one thing is certain: Unlike other industries that have been forced to shut down, senior living communities are open and continue to serve residents. With that framework in mind, a March 26 webinar sponsored by the National Investment Center for Seniors Housing & Care (NIC) addressed the ongoing financial implications of the COVID-19 pandemic for operators, developers and capital providers. The webinar is the first in a series of NIC-hosted webinars to address industry challenges related to the pandemic. Webinar participants included Beth Mace, NIC chief economist; Jim Costello, senior vice president, Real Capital Analytics; Kurt Read, principal, RSF Partners; Matthew Ruark, senior vice president, head of commercial and healthcare mortgage production, KeyBank Real Estate Capital; and Kevin McMeen, president, real estate, MidCap Financial Services. Early impact The immediate financial repercussions of the pandemic include a stall in transactions, a rise in lender caution, confusion over valuations, and a search for clarity on how the disease will impact occupancies going forward. The most startling data point was noted by Mace at the outset. Weekly jobless claims March …

April 3, 2020

Content Partner Features Industrial Lee & Associates Northeast Feature Archive Retail Western Feature Archive

Free Returns: How Reverse Logistics Impacts Industrial Real Estate

by Sarah Daniels April 2, 2020

The industrial sector has been the preferred asset class of commercial real estate in recent years. “The rate of return for industrial real estate has been higher than that of any other class for nearly half a decade,” says Jeff Rinkov, CEO of Lee & Associates. These rates of return are the result of permanent changes in consumer behavior and preferences — and recent events are driving more rapid changes in consumers’ e-commerce shopping. Though it remains to be seen how the economic impact of the coronavirus will influence various sectors of real estate, the pandemic has meant a sudden uptick in reliance upon industrial real estate as consumers turn to online shopping in the face of in-store shortages and shelter-at-home orders or social distancing practices. As brick-and-mortar stores close temporarily, retail companies and logistics professionals grapple with the increased volume of both online orders and e-commerce returns. What do facilities for e-commerce look like as customer expectations for e-commerce grow? How do companies process returns in an efficient and cost-effective manner, a critical element of success for e-commerce companies? Consumers increasingly prefer to shop online instead of going to brick and mortar stores. E-commerce sales accounted for more than …

April 2, 2020

Content Partner Features Lument Multifamily North Carolina RED Capital Group Southeast

Raleigh’s Potent Economic, Demographic Growth Rewards Multifamily Investors

by Sarah Daniels April 1, 2020

Raleigh checks all the boxes: a youthful, highly educated population, top research universities, a thriving large cap research and tech sector, plus clement weather. It’s Austin with more first-rate college basketball teams and less traffic. Despite its conspicuous lack of entry barriers, multifamily investors and developers have placed enormous bets on Raleigh’s continuing success. Since 2017, apartment properties valued at nearly $8 billion have exchanged hands and over 15,000 market-rate apartment units worth more than $2.5 billion were delivered — a commitment of capital the equivalent of roughly $11,000 for every working Triangle resident. Competition promises to be no less taxing this year. Supply in 2020 will approach 8,000 units, easily the largest vintage in market history and an increase of 40 percent from last year. Few players have regrets. The metro apartment and labor markets continue to perform at full throttle, and investment returns remain among the highest in the country. There were, however, moments of doubt. Recent preliminary Bureau of Labor Statistics payroll employment and hourly wage data for the nine-month period that ended in June 2019 recorded uncharacteristically soft results. Initial reports suggested that metro payroll job formation had limped along at a 1 percent annual pace …

April 1, 2020

Features

Despite Pandemic Damaging Economy, Real Estate Industry Leaders Remain Optimistic

by Alex Patton March 31, 2020

The rapid outbreak and spread of COVID-19 took many businesses, communities and governments by surprise. While the immediate health of employees is the chief concern, leaders in commercial real estate have started to address the impact of the virus on transactions in the coming year. Many full-service commercial real estate firms have established coronavirus resource pages on their websites, which include market research related to the virus. Some industry leaders distributed personal statements to their clients and partners that they will continue to offer their services through the health crisis and economic interruption. Rich Handler and Brian Friedman, CEO and President of Jefferies Financial Group respectively, expressed optimism and stressed that all companies and individuals should prioritize health, safety and emotional well-being of employees. Jefferies Financial Group jointly owns Berkadia together with Berkshire Hathaway. Handler and Friedman also noted that a large and non-partisan intervention from the federal government will be required to repair the economy, such as the $2 trillion stimulus package recently passed by both houses of Congress. The Jefferies leaders also noted that businesses should not forget the lessons learned from this interruption. “The one thing we can assure each of you is that we will not …

March 31, 2020

Features Hospitality

CBRE Predicts 60 Percent Drop in Hotel RevPAR in Second Quarter Due to Pandemic

by Jeff Shaw March 26, 2020

LOS ANGELES — As the impact of the COVID-19 pandemic continues to develop, CBRE Hotels Research has released a revised Viewpoint Hotel 2020 Outlook. The firm now expects gross domestic product (GDP) growth for the United States to slow to 0.4 percent in 2020, down from its previous estimate of 1.9 percent. CBRE expects a sharp drop in economic activity in the second quarter, stabilization as early as third-quarter 2020 and a recovery underway by the fourth quarter. “Governments throughout the world are implementing monetary and fiscal stimulus to try to prevent a more long-term global recession,” says Jamie Lane, senior managing economist with CBRE. “Our current expectations are that this stimulus, as well as pent-up demand, will lead to a substantial rebound in economic activity in 2021.” Decline in lodging demand The lodging sector’s two main challenges are a contraction in overall economic activity and the need for social distancing that encourages staying at home in small groups and not traveling. As seen in other countries, these monetary and social restrictions will cause a severe decline in the lodging demand in the United States. CBRE’s updated forecast shows a 37 percent decline in revenue per available room (RevPAR) for the …

March 26, 2020

Features Multifamily Student Housing Video Webinar

COVID-19 Webinar Recap: Student Housing Owners, Operators Talk Best Practices, Industry Impact

by Jeff Shaw March 26, 2020

The coronavirus (COVID-19) is having a widespread impact on the off-campus student housing industry. Many off-campus owners and operators are grappling with a growing number of universities canceling in-person classes, and in some instances, ordering students to vacate their campuses and residence halls altogether. On Wednesday, March 25, Student Housing Business (SHB) held a complimentary webinar on the impact of COVID-19 on the off-campus student housing industry. The webinar had nearly 2,000 attendees. During the panel discussion, six owners and operators weighed in on best practices and operations advice for employees at both the corporate- and property-level, as well as the potential impact of the pandemic on turn — the student housing industry’s intense summer period when units are cleaned, refurbished and rehabbed — and leasing for fall 2020. Randy Shearin, editor of SHB, led the discussion. Speakers included Casey Petersen, COO of Peak Campus; Chris Richards, executive director of real estate operations at Greystar; Adam Byrley, COO of The Preiss Co.; Grant Collard, CEO of Redstone Residential; Alex O’Brien, COO of Cardinal Group; and Miles Orth, EVP and COO of Campus Apartments. Click here to listen to the full webinar: COVID-19 and the Impact on Student Housing Residents, Employees, Operations, …

March 26, 2020

Features Hospitality Industrial Multifamily Office Restaurant Retail

COVID-19 and Commercial Real Estate: What We Know, What We Don’t

by Jeff Shaw March 23, 2020

The coronavirus pandemic (COVID-19) has not only impacted the physical health of humans around the world, but the health of the U.S. economy as well. While the stock market rallied over 11 percent on Tuesday, its biggest jump in nearly 90 years, on news that a federal stimulus bill to rescue the economy from the coronavirus was imminent, the Dow Jones Industrial Average was still down 31 percent from its most recent high at the closing bell. Meanwhile, economists say weekly jobless claims — new filings for unemployment insurance — could hit 2 million or 3 million. The Labor Department will release the latest figures on Thursday morning. Before the coronavirus hit, weekly jobless claims hovered around 215,000. Though no one knows the true fallout yet — because we’re still in the thick of it. “The impact of the crisis on the commercial real estate market has been dramatic so far, and we are only in the beginning,” says Alex Zikakis, president and founder of Capstone Advisors, a real estate investment, development and asset management company in Carlsbad, Calif. “Many small businesses, especially in retail, are facing extreme pressure as people social distance and only shop for absolute necessities. I …

March 23, 2020

Charlotte Rent and Occupancy, RED Capital

Content Partner Features Lument Multifamily North Carolina RED Capital Group Southeast

Charlotte Surges into the First Rank of U.S. Growth Markets

by Sarah Daniels March 20, 2020

Charlotte is America’s second-largest commercial banking center, home to one of the country’s biggest financial institutions, Bank of America; soon the headquarters site of another when BB&T and SunTrust merge; and host to more employees of Wells Fargo than call its San Francisco base home. It would be hard to exaggerate the economic benefits the local market secures from this status. One growing but not widely appreciated benefit is the Queen City’s emergence as one of the world’s hotbeds of innovation in fintech, the space in which digital technology and financial services intersect. With support from local financial services giants, well-funded fintech incubators (like Queen City Fintech, hired by IBM to build and run their Hyper Protect accelerators) and a burgeoning start-up community, Charlotte has hatched a small army of successful fintech firms capitalized with more than $2 billion to date. Lately, entrepreneurs in other disciplines have come to appreciate Charlotte’s virtues. Nascent disruptors in the healthcare and electric power sectors are setting down roots in the city, attracted by its low operating and living costs, quality of life, deep well of talent and uniquely collaborative style. The injection of start-up energy into Charlotte’s thriving Fortune 500 business foundation catalyzed …

March 20, 2020

Features Student Housing

The Coronavirus Outbreak: A Guide to The Impact on Student Housing

by Katie Sloan March 19, 2020

The impact of the coronavirus (COVID-19) is being felt across every sector of the U.S. economy as the virus continues to spread worldwide. The student housing industry is not exempt, as the number of colleges and universities canceling in-person classes continues to grow, with some requesting that students vacate residence halls immediately for the remainder of the spring semester. The number of confirmed cases in the U.S. has climbed to 10,442 and the death toll has risen to 150 as of March 19, according to The New York Times coronavirus case map. President Trump declared a national emergency on March 13, which gave him authority to use $50 billion allocated by congress for disaster relief to address the coronavirus crisis. The Trump administration broadened the government’s response to the pandemic on Wednesday, spelling out the first details of a $1 trillion economic package that requests an infusion of $500 billion for direct payments to taxpayers and $500 billion in loans for businesses from Congress, according to reports by The New York Times. President Trump also invoked a seldom-used wartime law that allows the government to press American industry into service to ramp up production of medical supplies. University and College Closures Universities are taking …

March 19, 2020

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