|Rent Payments Collected by April 6th||82.9%||78.0%|
|Rent Payments Collected by May 6th||81.7%||80.2%|
|Rent Payments Collected by June 6th||91.6%||80.8%|
|Rent Payments Collected by July 6th||79.7%||77.4%|
|Current||Prior Week Change|
|10 Year Treasury||0.605%||-0.064%|
|Total US COVID-19 Cases||3,141k||+387k|
|Total US COVID-19 Tests||37,430k||+3,970k|
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What’s Happening Now
Lots of news from the housing market this week with mortgage activity taking the headlines. New mortgage applications were up 33% year over year last week and refinance applications were up 111% over 2019 representing 60% of the total volume. Record low rates are driving the activity and are helping buoy the housing market values where most could have predicted a decline due to the crisis.
The CEO of Marcus & Millichap called for an extended two-year exodus from urban cores, which would further put pressure on the suburban housing and office markets as we have discussed previously, and we have already seen start to occur if only for the short term.
I was speaking with a large developer in Stamford, CT last week who commented that all of the office leasing brokers in the area are getting overwhelmed with NYC based firms trying to find replacement offices for employees who are no longer willing to commute via public transit into the city. The catch? They’re only looking for 6-12 month leases.
What To Watch
It will be quite interesting to see how these temporary moves away from the CBDs will play out over the long term and how quickly that commuting flow will return once a vaccine is available. As we’ve talked about ad nauseam in this newsletter, all of this recovery is predicated on getting a footing under ourselves from the health side of this pandemic, which we are far from given the current trends.
We continue to seek the thoughts of expert real estate managers in trying to identify where the opportunity set lies coming through the other end of these times and looking to secondary markets seems to be what we hear more and more consistently. However, with secondary markets getting more attention, will that create pricing opportunities for the contrarian buyer to look in the primary markets? Talk about flipping things around.
Summer is here, the sun is shining, and we hope all of you readers are able to find some calm and peace during the continued challenging time we all find ourselves in. Take some time to connect with those around you (in a socially distanced way, of course) and stay safe out there!
-Adam Hooper, CEO
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Key Articles To Read This Week
“We are tremendously concerned what happens if those systems are not renewed,” says one insider about expanded unemployment benefits.
After banks closed lobbies, their drive-up lanes lined up with customers who prefer tellers over ATMs
Though there are many forces at play, an office environment will remain relevant and important in the long term.
Companies brought back office workers, only to send them home again. Others still can’t figure out how to get people up a 50-story skyscraper.
The company wouldn’t say Wednesday which locations would close, but it has been known to close underperforming stores.
The 202-year-old maker of business suits, and one of the last with U.S. factories, joins other apparel brands in bankruptcy court
Home prices gains continue to accelerate, so low mortgage rates are giving buyers much-needed help.
Commercial real estate demand has also picked up in the suburbs as some businesses follow workers into the city outskirts.
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