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November 11, 2020

Amid The Wreckage, Some Retail Thrives, But Landlords Will Have To Work Harder To Get Those Tenants

[Digital Summit] Introducing Bisnow's Annual Student Housing Digital Summit: Lessons Learned From One Of The Most Turbulent Semesters To Date Nov. 12

The retail sector suffered tremendous reverses in 2020, but even in the midst of what some call a “retail apocalypse,” bright spots also appeared. Some tenants took advantage of the troubled market to sign favorable deals, launch new types of businesses or learn how to use the internet to sustain sales. That has kept many properties afloat, even as vacancy rates climb and rent collection remains below 2019 levels.

“The thing that’s obvious to everyone is that there are some retailers that are poised to do well in this era,” Baum Realty Group President Mike Demetriou said.

Amid The Wreckage, Some Retail Thrives, But Landlords Will Have To Work Harder To Get Those Tenants

The Chicago-based Baum brokered nearly two dozen retail leases across the metro region in Q3. The deals included ones for restaurants that utilize third-party delivery and other essential businesses such as cannabis dispensaries, animal hospitals, oil-change shops, physical therapy outlets and medical centers.     Businesses like that helped national retail sales…

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CMBS Loans Have Gone To Special Servicing This Year Faster Than Ever Before

The number of CMBS loans in the U.S. that have become delinquent and been transferred to special servicing this year is at the highest level since the aftermath of the Great Recession.

Most of those loans have been in the hardest-hit hotel and retail sectors, reflecting the almost-overnight disruption the coronavirus pandemic has caused to travel and shopping habits. Those segments are now at new peaks for delinquency. 

Across property types, loans are going to special servicing faster than during prior recessions, taking months instead of years and rocketing the overall market toward its previous peak at an unprecedented rate.

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CRE Exec's Sexual Assault Inspires National 'Carrie's Law' Campaign For Survivors

 

In May 2018, when Carrie Bobb arrived at the ICSC RECon conference in Las Vegas, she felt high-profile, even in a city filled with casinos and celebrities. A successful broker for CBRE in San Diego where she managed a $2B portfolio, Bobb, 39, was set to receive a national award for character, creativity and excellence in business at one of the largest events on the commercial real estate calendar; the ballroom where the event took place featured 20-foot-tall photos of her. The night after she was presented with the honor, she went out for a white-tablecloth dinner with a leading male executive at the firm. 

That night, Bobb alleges, she was drugged, sexually assaulted and raped by the executive (a toxicology report evaluated by a third party would later show she had date rape drugs in her system). Three days later, she filed a report with the Las Vegas Police.

But when she went to find justice via her company and potentially file a civil lawsuit, she found her options were curtailed by her employment contract. Due to a mandatory arbitration clause — a mechanism that sends cases to a private, non-public system of legal resolution that often favors the employer — she was legally barred from talking about the situation or case with anybody. She couldn’t even warn other co-workers they were working with an alleged predator. 

“Arbitration with sexual assault is a mechanism for companies,” she said. “If something bad happens, they can pull the lever and make the victim disappear. Your world is completely leveled, and you have to sit there and negotiate. And the process you go through is worse than the incident itself.” 

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Lessons From A City In A Second Lockdown: Why Recovery Will Be K-Shaped And Slow

MANCHESTER, UK — For Mecanica, a smart little bar in Manchester’s tech-dominated Northern Quarter, the second English lockdown meant a second, and perhaps, fatal closure.

The March to June lockdown wiped out the chances of success for the first bar on the mixed-use site, and the landlord took over to run Mecanica in-house, opening in September. For a month, it thrived. 

Then in late October, a month before the rest of the UK, Manchester entered a second lockdown, and now the bar is shuttered. Despite a continuing trade in home-delivery vacuum-pack martinis, it won’t be returning to life anytime soon. The same goes for the coworking suites upstairs branded as ClockWork.

Mecanica’s down-up-down 2020 reflects that of Manchester. The city in north west England — famous, among other things, for football, and its vigorous music and youth scene — was western Europe’s boomtown in the 12 months before the coronavirus pandemic emerged in March 2020. Manchester boasted more skyscraper development than any city in the Anglosphere except Toronto, as locals and overseas investors fought for a share of its city living scene.

Meanwhile the office market boomed on the back of a surge in tech investment and Far Eastern money. If anywhere could bounce back from the combined economic and social shock, surely it should be Manchester? 

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Origin Stories: W. Allen Morris' Early CRE Exposure Put Him On The 'Fast Track' To A Career In The Industry

 

This series delves into the myriad ways people enter the commercial real estate industry and what contributes to their success.

By 8, he was going on building inspections. By 18, he had a real estate license. He was 28 when he bought out his father to run the family business.

When W. Allen Morris took over from his father, the founder of Florida-based development and investment firm Allen Morris Co., as chairman and CEO, he had experienced a bit of every department within the company. 

Morris' love affair with commercial real estate wasn't always at the fore: At one point, he thought he had found his calling in the seminary. At the beginning of his career, he was disillusioned by the dishonesty he encountered in CRE.

But 40 years later, after being fast-tracked for a career in the industry he grew up in, he said he is glad for that initial impression because it spurred him to "build a team of honest, professional brokers."

Read the full story here.

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As Retail REIT Losses Deepen, Optimism Returns With Vaccine News, Spending Rebound

While the bottom lines of some of the largest publicly traded retail REITs continued to deteriorate in the third quarter, many executives say they are finally emerging from the worst of the coronavirus pandemic with renewed momentum.

But despite continued struggles within the retail real estate industry — with retailers emptying nearly 15M SF of storefronts and shop space across the U.S. in the third quarter, according to CBRE — landlords saw glimmers of hope that consumers were spending again and retail tenants were paying more in rent.

Read the full story here.

 
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Take The Bisnow Exit Poll: Is Biden The Right Choice For CRE?

Take The Bisnow Exit Poll: Is Biden The Right Choice For CRE?  

Though the election is not yet certified, much of the country and real estate is gearing up for Joe Biden to take the Oval Office in January. Sources have been telling Bisnow for months that Biden has gained support within commercial real estate, and professionals we have spoken to…

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