New office developments that offer outdoor spaces, bike amenities and germicidal tech may have a competitive edge in the effort to win over wary tenants.
More than seven months into a nationwide experiment in working from home, office developers and designers are grappling with a familiar challenge: creating welcoming environments for companies and workers. That perennial task has been intensified by a host of new issues, including heightened safety protocols, liability risks and a lingering unease about returning to the office.
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A decline in office utilization if it lasts beyond the pandemic could pose risks for loans backed by office assets, because it is likely to impact office rents, occupancy rates and market values, according to a recent report from Moody’s Investors Service. The report notes that the impact would be greatest in urban markets with the highest average rents. That, in turn, would heighten risk to office-backed CMBS loans—the largest segment of the CMBS market. It would be a particular problem for loans with aggressive underwriting that are maturing in four to seven years, according to Moody’s.
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Price discovery in the private real estate market is always a challenge when there is a sudden change in the market as we have now with COVID-19. As happened during past recessions, the number of transactions activity declines to the point where it is a challenge for appraisers to find “comparable sales” to value the property. Capital flows to the commercial real estate sector as tracked by Real Capital Analytics are below levels in 2018.
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The demand for office space is going to shrink even after the coronavirus pandemic recedes, according to a new survey of more than 400 finance and accounting executives by LeaseQuery, but will likely rebound from its current minimal footprint.
Some 31% of the respondents said they have reduced their real estate footprint in response to the pandemic, while 18% say they reduced their real estate leases. Looking ahead to next year, roughly as many say they will have a smaller real estate footprint (22%) as those who say they will have a larger one (21%). Most of the respondents, some 57%, say that there will not be a change in their real estate footprint in 2021.
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Figuring out how to value properties amid unprecedented circumstances has been a challenge that's vexed commercial real estate pros throughout 2020. New data, new technology and new property types are all changing the game for the experts who estimate the value of real estate properties.
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One of the country’s most prominent baby boomers in the business world has aged very well.
Born 60 years ago in the U.S. with a handful of companies, the REIT structure is now a dominant force not only in American commercial real estate, but also now a vehicle that is employed globally.
The U.S. alone boasts 222 publicly-traded REITs, and IRS records show that about 1,100 listed and non-listed REITs pay taxes. And REITs now operate in 39 countries overall. Today, the market cap of the FTSE Nareit All REITs Index, the broadest index for equity and mortgage REITs in the U.S., stands at $1.1 trillion.
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WeWork burned through $517M during the third quarter of 2020 as the company struggles against coronavirus pandemic-inspired headwinds that have dealt the coworking business model a body blow.
The company's cash reserves, plus commitments from major investor SoftBank, now stand at about $3.6B, down from about $4.1B at the beginning of the third quarter, the Financial Times reports, citing an email from CEO Sandeep Mathrani to WeWork employees.
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NORTH LAS VEGAS, NEV. — Newport Beach, Calif.-based CapRock Partners has started construction on CapRock Tropical Logistics, a two-building logistics complex in North Las Vegas.
Located at 5802 and 5902 E. Tropical Parkway, CapRock Tropical Logistics is situated on an 83-acre site that CapRock assembled through the acquisition of 24 parcels from 13 owners in first-quarter 2020.
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Lenders granting forbearance periods to struggling borrowers continued to bring the CMBS delinquency rate down in October, according to Trepp LLC. The firm estimated the overall CMBS delinquency rate in the U.S. market averaged 8.28 percent—64 basis down compared to September. While high, that was still below the peak reached in July 2012 at 10.34 percent.
Loans that were 30+ days delinquent averaged 1 percent of the total U.S. CMBS universe, those that were 60+ days delinquent were at 0.78 percent and loans that were 90+ days delinquent averaged 3.72 percent.
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Far more office tenants reduced their office space usage than leased space nationwide in Q3, resulting in massive negative net absorption for the quarter. The drop followed a similar slump in the second quarter. Different companies calculate the total differently, but they all point downward in a big way.
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