COVID-19 Trends of the Week: 4/24/20

Borrowers bank on forbearance. How will office consumption change? Investors count on opportunities to arise. These are the trends that shaped real estate content this week.
President Trump is expected to sign the new $484 billion coronavirus relief bill. That will help more small businesses and some landlords get payroll loans. Even so, owners and operators are bracing for extended income interruptions and preparing for the “new normal” of property occupancy. Here are three trends that shaped the news this week.
 
1. As Rent Payments Stumble, Forbearance Requests Mount

 
More and more commercial real estate borrowers are reaching out to their loan servicers regarding forbearance. While landlords were pleasantly surprised with April commercial and residential rent collections, the forecast for May is cloudy and many fear they will not be able to pay their mortgages on time. Federal measures for tenants and landlords may help, but will they be enough to keep tenants and landlords solvent? Meanwhile, borrowers with loans in progress are finding lenders rewriting term sheets.

 
2. Office Property Dynamics Are In the Hot Seat
 
For weeks, there has been a lot of hand-wringing about the hotel and real estate markets. The focus of concern has now broadened to the office market. Questions arose about office property this week because there is talk about returning to work. That’s a positive development. But there are many short-term and long-term challenges besetting the property type. How will office building owners ensure tenant health? What impacts will the global—and mostly seamless—work-at-home experiment have on office demand in the long-term? What are the implications for office valuations now and in the future? On the bright side, corporations are expected to require more square feet per employee to ensure social distancing. 
 
Covid-19 and the Shift to Remote Work
Commercial Property Executive
 
AZBigMedia
 
 

The Office Market After COVID: Will It Be a Zero-Sum Game? 

National Real Estate Investorn

What Working From Home, Coronavirus Mean For Office Real Estate Market
New York Post

3. As Distressed Real Estate Seems Likely, Investors Play Offense, Too.

While investors worry about their own real estate portfolios, they are also preparing to capitalize on the likelihood that deals will fall apart and be repriced, investors will sell to preserve returns, new equity partners will be sought, and distressed debt will be up for sale. Investors are playing “two-thirds defense and one-third offense,” said Nadir Settles, managing director and head of New York office investments for Nuveen, this week during a webinar sponsored by Ariel Property Advisors.

Money (Literally) Pouring Into Distressed Real Estate Funds 
Seeking Alpha