Urbanexus Update - Issue #99
H. Pike Oliver compiles this weekly update of real estate and community development news focused primarily on the USA. The inclusion of an article does not imply endorsement. And please note that some links may lead to items that are behind a paywall.
The economy
Recession underway per UCLA Anderson Forecast
Economists at UCLA have concluded that the U.S. economy has entered a recession, ending the expansion that began in July 2009. The revised UCLA forecast, which incorporates data reflecting a rapidly changing U.S. economy, together with a review of the 1957–58 H2N2 influenza pandemic, is for the recession to continue through the end of September. This marks the first time in its 68-year history that the UCLA Anderson Forecast has published an updated forecast between its regularly scheduled quarterly releases.
The revised forecast came with an important caveat. If the pandemic is much worse than assumed, it will be too optimistic. If the pandemic abates quickly because of the extraordinary measures being put into place to address it, then the forecast will be too pessimistic and economic growth in the third and fourth quarters of the year will be higher. More information and resources, including forecast tables, videos and essays by the economists, are available at uclaforecast.com.
About 20% of Seattle region workers face job loss The region's economy is experiencing "an economic shock that will take many months and beyond to recover from," says the study by the Seattle-based research firm Community Attributes Inc.
Coronavirus resources for the real estate industry
As concerns about coronavirus mount and the stock market is impacted, REBusinessOnline has compiled commercial real estate industry reports to help readers find the information they need. The reports are organized by relevance and timeliness. Check back often for new resources as they become available.
Real estate finance and investment
Downward spiral in interest rates As interest rates continue their historic spiral downwards, the world's central banks are running out of conventional tools to settle markets.
Capital markets and the coronavirus
The economic impacts of the unprecedented measures being implemented to slow the spread of the Coronavirus are reverberating throughout commercial real estate (all product types and lenders). The reassuring news from the Capital Markets is, “this is not a credit crisis”. Unlike 2008, most lenders have liquidity. Much of this is due to the unprecedented and timely actions from both our government and the Federal Reserve in a coordinated response. The hotel and retail industries have been enormously impacted. Multifamily, office and industrial are not exempt as businesses and individual’s income and ability to pay rent is deteriorating.
Will disruption to give way to opportunity?
Equity markets around the word have swung wildly in recent weeks. Listed real estate stocks have not been immune to the sell-off as investors have struggled to assess the potential impact of the coronavirus on the sector’s demand drivers and net-operating-income outlook. The asset manager explains that the different real estate clusters carry different operational gearing and hence experience different reactions to the COVID-19 outbreak on their real estate fundamentals. Some clusters experience pressure like hotels and senior housing whereas others benefit like medical office buildings, laboratory office space, data centers and, to an extent, logistics.
Real estate finance
Refinancing for historic NYC building — rebusinessonline.com
JLL has arranged a $545 million loan for the refinancing of 711 Fifth Avenue, a 340,024-square-foot office building in Manhattan. Originally built in 1927, the 18-story building consists of 284,061 square feet of office space and 55,963 square feet of retail space. In its 93-year history, 711 Fifth Avenue has served as the both the corporate and regional headquarters of companies such as NBC, Columbia Pictures and Coca-Cola. The building is located near Central Park and the world-renowned 57th Street luxury residential corridor, also known as Billionaires’ Row.
Housing
Fannie Mae, Freddie Mac mortgage moratoria
The Federal House Finance Agency announced Wednesday it had told Fannie Mae and Freddie Mac to suspend all foreclosure actions and evictions for at least 60 days because of the coronavirus emergency. The suspension applies to homeowners who have a loan backed by Fannie or Freddie. Freddie Mac and Fannie Mae have also said they would provide forbearance options to borrowers who were affected by the pandemic. Forbearance allows mortgage payments to be suspended for up to 12 months because of economic hardship that was caused by the coronavirus outbreak.
Retail
Closure of retail centers amid COVID-19 outbreak
Simon Property Group and Unibail-Rodamco-Westfield (URW) have announced they will temporarily close their respective shopping centers across the United States amid the worldwide COVID-19 outbreak. Simon (NYSE: SPG) closed all of its U.S. properties on March 18. URW closed its properties on March 19.
Community development
Plans for 180 acres in New York City
Sunnyside Yard in the New York City Borough of Queens may soon host 12,000 homes on a 180-acre site over a working rail yard.
A century of bad urban planning? — www.theamericanconservative.com
Anthony Paletta reviews a book by Nir Buras entitled The Art of Classic Planning: Building Beautiful and Enduring Communities. According to Mr. Paletta, one planning tendency that Mr. Buras critiques is a tendency of planning experts to neglect buildings. Buras notes, for example, that one will never have a grand plaza without (at least some) great buildings around it.
Reflections on the architecture of gentrification in Texas The rules and systems that have produced gentrification aesthetics—financial ones as well as political ones—create a kind of socioeconomic standardization.
