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5 at 5: Your Daily Digest for Real Estate Investing, 08/05/2020


Aug 05, 2020 by Marc Rapport

CMBS delinquency rates fall, CRE deal activity rises, WeWork goes corporate, a HOPE Act for small businesses, and some tips to lure tenants.

In Today's News

CMBS Delinquency Rate Falls in July

Trepp reports that the 30-day-plus delinquency rate on securitized commercial mortgages fell by 0.72% in July as borrowers caught up with payments because retail stores and restaurants were able to reopen and re-establish their businesses.

Why it matters: This commentary from Nareit notes that borrowers most in need of debt service relief were probably in the May and June numbers, lending some optimism in the commercial real estate (CRE) space for the months ahead. We shall see.

CRE Deal Activity on the Increase, but Extended Pandemic Effects Expected

The NAIOP, the Commercial Real Estate Development Association, said today that its fourth monthly survey measuring COVID-19's impact on the CRE industry shows deal activity improving across most major sectors.

Why it matters: Many respondents expect the pandemic's effects to impact their businesses for another 12 to 18 months. And industry matters. Office and retail showed the least activity. Industrial the most. That's a recurring theme in many reports lately.

WeWork Sheds Youthful Image As It Lures Big Corporations

The Wall Street Journal takes a look at how the biggest co-working space provider has shifted gears, with companies of more than 500 employees now making up more than half of WeWork's U.S. core revenue for the first time.

Why it matters: Shared office spaces have sprung up everywhere, like Starbucks, with what seemed like one on every corner in some urban centers, but their gig worker clientele has been hard hit by the pandemic. WeWork could be showing a path forward to those able to secure larger clients to take up some of its newly vacant space.

Today on Millionacres

HOPE Act Would Extend Relief to Small Businesses With CMBS Loans

Advocates for countless small businesses across the country are hoping for help in the form of the Helping Open Properties Endeavor (HOPE) Act of 2020, a bill to provide relief to troubled businesses that hold commercial mortgage-backed securities (CMBS) loans.

Why it matters: Advocates for this bipartisan bill just introduced in the House say it could help save several thousand hotels alone from going into foreclosure. The HOPE Act would offer similar relief to CMBS borrowers that residential loans backed by the government-sponsored enterprises (GSEs) have been receiving.

4 Specials You Can Run to Get New Tenants in the Door

Millionacres' Aly Yale shares some tips on how to encourage new tenants to fill your empty units. They can work for apartments as well as small retail spaces.

Why it matters: Vacancies are expensive. You're stuck paying the mortgage, bills, and utilities without income to pay for all of that. Spending a little upfront can pay off in the long run.

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