COVID-19 Trends of the Week: Sept. 7-11

School's open for student housing. The ups and downs of CMBS. The country's biggest office market is mostly empty.

The U.S. Senate failed to pass a slimmed-down version of the latest coronavirus relief bill. Included in the bill were additional unemployment benefits of $300 (they had been $600 until July 31), another round of Paycheck Protection Program loans, and liability protections against COVID 19-related lawsuits. Noteworthy omissions include stimulus checks and support for states facing budget shortfalls.

  1. Student housing operators forge ahead despite higher ed’s haphazard start.
Student apartment in Lincoln, Neb. Photo by Trinitas Ventures/CC

Universities across the country are confronting a spike in COVID-19 cases and mulling whether or not to move to online learning or close campuses. Student housing properties remain open regardless, and many are fully rented for the year. But higher education’s precarious condition has impacted vacancies and rent growth for some operators, while raising the sector’s overall risk profile.

Walker & Dunlop, CBRE on Student Housing Investment
Multi-Housing News

Campus Outbreaks Have Muddied the Picture for Student Housing
National Real Estate Investor

Land Near University of Tampa Could Become Student Housing
Tampa Bay Times

2. Here’s the good news/bad news on CMBS.

CMBS delinquencies inched downward in August for the second month in a row. They had hit a record high in June. Meanwhile, the bulk of the troubled loans remain in the lodging and retail sectors. But while the overall delinquency rate is improving, the percentage of loans being handled by special servicers continued to increase. Loans receiving forbearance are considered current, but they are still under the care of a special servicer.

CMBS Delinquency Rate Declines Again, Trepp Finds
Commercial Property Executive

Lodging and Retail Lead Property Types in Delinquencies
Commercial Observer

3. All eyes are on New York City as vast amount of office space sits empty.

The country’s biggest office market is under a microscope these days as the nation wonders when and how companies will return to high-rise workplaces. A study showed that only 8 percent of New York City employees had returned to their offices by mid-August (real estate companies are contributing a high percentage of those workers) and the majority of the leasing activity is short-term arrangements and subleases. That situation is not expected to get markedly better until there is a vaccine. In the meantime, brokers and owners are trying to address tenant concerns.

New York Office Glut Signals Market Downturn as COVID Bites
Reuters

Manhattan’s Office Buildings Are Empty. But for How Long?
New York Times

Are Offices Dead? Not Yet, But Real Estate Power Brokers Are Betting on a New Strategy
Fast Company