20192020Rent Payments Collected by April 20th93.3%89.2%Rent Payments Collected by May 20th93.0%90.8%Rent Payments Collected by June 20th92.2%92.2%*Data brought to you by NHMC Rent Payment Tracker
CurrentPrior Week Change10 Year Treasury0.646%-0.048%DOW25,745.60-334.50S&P 5003,083.76-31.58Unemployment Rate13.3%---Total US COVID-19 Cases2,430k+238kTotal US COVID-19 Tests28,570k+3,170k*Metrics as of 11am EST on Friday, June 26
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What's Happening Now
The transitions continue. This week we learned that Texas, and as of late yesterday, Arizona, are putting the brakes on their reopening plans due to major spikes in COVID-19 infections. Locally, here in Portland, we are seeing the same spikes and murmurs of the same conversation. As predicted in earlier newsletters, the impacts to both confidence and economies could be massive if we are required to roll back the openings or go into a rolling shutdown.
In the real estate world, we’re seeing more signs of the transition from traditional retail to Amazon owned commerce. Amazon’s real estate arm has been on a massive expansion tear, furthering their footprints and dominance in the logistics space, adding over 4 million square feet of industrial space announced in the last weeks. Recent rumors have also suggested they are taking a more serious look at acquiring struggling retailers, including the likes of J.C. Penney and Macys. It’s long been joked that Amazon will one day take over the world, maybe that’s not too farfetched after all!
Multifamily rent collections remain strong through the first weeks of June, with the rate virtually unchanged on a year over year basis. This tracks with the conversations we are having in the market and is providing a tailwind to increased transaction activity we’re seeing on our marketplace.
What To Watch
Based on all the data, COVID-19 is here to stay. We’re definitely not out of the weeds and we wouldn’t be surprised if we see rolling shutdowns and stay at home orders. We don’t know what the overall economic impact will be, but most importantly, what the health and psychological impacts will be.
I was talking with a business development Director of a Fortune 500 company with over 10,000 employees yesterday and they’ve slashed their travel budget companywide to zero for the remainder of 2020. We discussed the challenges that presents for closing deals and growing their business in an entirely remote world – a major transition to say the least.
Businesses and industries that can adapt to these new methods of communicating and doing business are going to be the winners. Keep an eye on how industries are transforming to this new digital first environment, and who those key players leading the transitions are. There you will find the winners as we start to get a footing underneath whatever the new normal may be.
We’ll continue to do our best to stay on top of all of these changes. Let us know what you’d like us to explore - if you’ve read this far along in my ramblings, send me a note and tell me what you want to hear in these newsletters! Stay safe out there, wash those hands and keep pulling for us to get through this together!
-Adam Hooper, CEO
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Mark Raffman and Ben Hittman from Goodwin Law joined us on the podcast to discuss how 5G will be impact real estate.
Dr. Peter Linneman, Principal of Linneman Associates and Founding Chairman of Wharton’s Real Estate Department, joined us on the podcast to discuss the current state of the market.
From touchless technology to the return of private offices, the issues associated with this pandemic pose an entirely new set of challenges, says TREC CEO Linda McMahon.
As New York warily enters Phase II of its post COVID-peak recovery, one of the few areas of the commercial real estate industry that seems safe from the many uncertainties is the life science sector.
A buyer from New York City saw a home via virtual tour, then three hours later offered the full asking price, in cash, one realtor said.
The housing market is recovering and so is the luxury or high-end of the market, according to at least one new report.
While it is important that multifamily appraisers do not jump to conclusions and make long-term predictions, we must understand the different ways in which COVID-19 is currently impacting the commercial real estate market.
Amazon has even been suggested as a primary suitor for struggling retailers Macy's and J.C. Penney
Netflix has acquired the Egyptian Theatre, a historic property that was originally built in 1922 in Hollywood.
*If you like this post, be sure to enroll in our free six week course on the fundamentals of commercial real estate investing — RealCrowd University.*