Today’s CRE Industry: Eight Must-Reads

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The Commercial Observer takes a look at the situation of commercial real estate in Manhattan, where the vacancy rate is almost 20%. According to The Wall Street Journal, home wealth in the United States has skewed more towards the wealthy during the last decade. These are some of the most important articles in the commercial real estate business today.

1. Has COVID-19 Made a Permanent Change in the Office? We’ll find out soon enough. “According to brokerage CBRE, approximately one out of every five square feet of Manhattan office space is available for lease, or was at the end of January.” There has never been a time when the number has been greater. Is there any reason to assume that figure will reduce much anytime soon, given all the discussion about hybrid work and people becoming less attached to their workplaces?” (Creative+++++++++++++++++++

2. Housing Wealth in the United States Has Become Even More Affluent Over the Last Decade “Over the last decade, the housing-value difference between families earning more than 200 percent of the median income in their region and other homeowners has increased dramatically. In 2010, high-income homeowners owned 28% of total housing wealth in the United States. By 2020, that percentage has risen to 42.6 percent.” (According to The Wall Street Journal)

3. Kohl’s has declared that it is no longer a department store. “Consumers were dumping conventional office clothing for denim and sneakers even before the epidemic struck, and Kohl’s had been growing its offering of athletic and casual brands in response.” During the epidemic, remote work accelerated this fashion trend. Kohl’s feels it has a chance to reposition itself as a market leader, and it wants to expand its fitness, athleisure, and denim offerings.” (Source: CNN Business)

4. Deals involving a Bay Area real estate enterprise have had both successes and losses. “Silicon Sage’s properties have been placed under receivership by a federal court. The court-appointed receiver is on a mission to find purchasers for the properties in order to salvage value from the collapsing and insolvent real estate enterprise. This allows investors to regain at least a portion of their losses.” (Source: The Mercury News)

5. Goodbye, Londongrad: Russian Oligarchs Put Pressure on the Property Market in the United Kingdom “The Russian government has enacted a slew of measures aimed against the Russian aristocracy. It has blocked all assets linked to various Russian billionaires who own villas in the city, and some politicians have demanded that the government take and sell those properties. It has ended a visa scheme that provided affluent foreigners with a fast track to citizenship and is enacting measures that make it more difficult for property purchasers to remain anonymous, a characteristic that had previously been a draw to London.” (According to The Wall Street Journal)

6. ‘Gone Are The Tchotchkes’: Covid Has Forever Changed The Office Desk “Desk designers say there’s been a split in the market, with larger, unassigned desks, adaptable, mobile desks that can accommodate people working in different positions in different locations, and desks in spaces designed for when they need to put their heads down and complete solo work,” according to manufacturers and dealers. (Bisnow)

7. According to Macy’s CFO, the American consumer is currently in good shape, but lower-income buyers may be forced to cut down shortly. “Macy’s predicts that lower-income households, who spend a larger share of their monthly wages on necessities like food, would be hit harder than others,” Mitchell added. As a consequence, the firm is already considering how to convey value to those clients differently than a luxury customer with higher spending power, according to Mitchell.” (CNBC)

8. Why do long-term SFR investors have a lower risk profile? “There is danger in SFR since it is now a hyper-mature sector.” We’re nearing the end of the current cycle, and with so much money chasing opportunity, some have turned SFR into a financial alchemy game. In a market where cap rates and prices are under tremendous upward pressure, many are betting on unsustainable rent increases.” (News from the Multi-Housing Sector)

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