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Real Estate Roundup 5.13.20

JLL’s NYC HQ (Credit: JLL)

Real Estate Roundup:

Senior Housing

  • The deadly virus outbreaks at senior communities throughout the country is expected to be front of mind for seniors and their families when deciding whether to move out of their homes. Industry executives have acknowledged that the senior-housing sector has suffered a major image problem… There’s also been some talk about whether telemedicine may be a threat as thousands of patients have started using telemedicine for doctors’ appointments and other health services. (WSJ)

Hospitality

  • CMBS loans on the following Manhattan hotels recently entered special servicing; the $115 million loan at the Mark Hotel at Alexico Group’s 25 East 77th Street, and an $108.8 million loan backed by Ashford Hospitality Trust’s Embassy Suites at 60 West 37th Street. May loan payments were not made in both cases. (CO)
  • An entity tied to Ashkenazy Acquisition Corporation filed a motion to force The Surrey Hotel at 20 East 76th Street into bankruptcy to try and save its nearly $45 million loan on the property. The parties are tangling over a dispute stemming from a potential ground lease termination at the hotel owned by Denihan Hospitality Group. The ground lease is held by Surrey Realty Associates LLC. (CO)

Tech

  • WeWork CEO Sandeep Mathrani told CNBC that the co-working company has paid its rent in over 80% of its locations in April and May. He noted that they have collected over 70% of rent from its tenants in April. (DailyBeatNY)
  • WeWork’s move to skip rent payments and renegotiate hundreds of its leases is rippling into the commercial mortgage market, sending the price of bonds backed by the company’s payments tumbling… When rating one WeWork-backed deal, S&P Global warned about the “sustainability of the co-working business model in an economic downturn, during which tenants may rapidly cancel their memberships as employment dynamics shift.” (FT)
  • A corporate-housing startup backed by Airbnb has raised money at roughly half the valuation it commanded five months ago, as the coronavirus pandemic ravages the lodging industry. Zeus is far from alone as far as revamped valuations go. (Bloomberg)

Home-rental market

Share prices of the largest home-rental companies, such as Invitation Homes and American Homes 4 Rent, have outpaced the broader stock market since the S&P 500 bottomed in late March. Invitation is up 57% since then and American Homes has gained 36%, compared with the S&P 500’s 31% climb. Rental executives say some recent move-ins chose to rent instead of buy given the economic uncertainty. Others have leased houses to get out of apartment buildings, given the contamination risks associated with close living.

  • Be Smart: Rent collections and tenant retention have proven far better than commercial property, such as office towers and shopping centers, and even apartments, which tend to have smaller household sizes and incomes than rental houses. (WSJ)

Other news

  • TPG Real Estate Finance Trust has sold off nearly $1 billion worth of commercial real estate debt to fight off margin calls. The non-bank mortgage lender made the disclosure during its first quarter earnings call, saying liquidity constraints raise substantial doubt about its ability to continue “as a going concern.” (TRD)

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