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Real Estate Roundup 5.20.20

Real Estate Roundup:

Student Housing

  • Recession proof, not pandemic proof: Many investors have long wagered that the student-housing sector was a safe bet even during tough economic periods. The pandemic is threatening that notion. An online fall semester could prove disastrous for them, and in some places it’s already shaping up that way… However, for schools that do open, off-campus housing may be better-suited for social distancing than traditional college dormitories because many feature private bathrooms and bedrooms for each student, and students don’t need to rely on communal dining halls. (WSJ)

Retail 

  • Lacoste USA has retained restructuring counsel at law firm Arent Fox and real estate advisory firm Keen-Summit Capital Partners to lead the restructuring of its leases with landlords across the country. The sporty designer label has at least 80 stores in the U.S., including 575 Madison Avenue, 541 Broadway and Westfield World Trade Center in Manhattan. (TRD)
  • After nearly 60 years of selling home décor and accessories, Pier 1 Imports is permanently closing its retail stores in the wake of the coronavirus pandemic, though it hopes to sell its intellectual property and e-commerce business. (WSJ)

Eerie silence of Times Square

Of all the shutdown scenes, there is perhaps no sight as strange as an empty Times Square. Due to its reliance on tourists and office workers, the city’s most crowded neighborhood is now among the most desolate. The number of people passing through has dropped to less than 35,000 a day, from 350,000 to 400,000. 

  • Worth Noting: Surprisingly, the cost of advertising in Times Square dropped just 26% in the shutdown. One reason? While there aren’t many people there, photos of the area—which has become symbolic of the lockdown’s impact—are appearing in the media more than ever, vastly amplifying billboard reach. (WSJ)

Tech 

  • When co-working company Knotel struck a deal with insurance startup Rhino, the two firms failed to disclose that their CEOs were related…. Knight RE — which backstopped surety bonds Rhino issued on two Knotel leases — said it was not informed that Knotel CEO Amol Sarva was the older brother of Rhino CEO Paraag Sarva. The reinsurance company has since told Rhino that no similar bonds could be issued “due to the appearance of impropriety.” (BI)
  • SoftBank now values WeWork at $2.9 billion as of March 31, down from $7.3 billion as of December 31, following its failed IPO. SoftBank has reportedly invested $18.5 billion in the company – a historically disastrous investment that will be studied in business schools for years to come. (DailyBeatNY)
  • CoStar announced it has commenced a public offering of $1.25 billion of its common stock. In a regulatory filing, the company said it would use some of the proceeds to fund new acquisitions and “to finance the growth of its business.” (PR)

Other news 

  • The world’s biggest real estate investors are sitting on piles of cash, preparing for once-in-a-lifetime opportunities created by the pandemic. With economies around the world sputtering, commercial real estate prices are expected to come down. How much they’ll fall is the key question. Private equity firms across the globe hold an estimated $328 billion in dry powder for real estate deployment. (Bloomberg)
  • Alex Sapir is trying to seize greater control of his real estate investment firm by buying out its outstanding shares and going private. The pandemic has hurt the company’s stock price on the Tel Aviv Stock Exchange and Sapir plans to take advantage. Sapir and business partner Gerard Guez already own 86.71 percent of the company. (TRD)
  • Charles Koch’s Koch Real Estate Investments has made a $200 million preferred-equity investment in Amherst’s single-family rental business. The deal had been in the works for over a year and closed earlier this month. At an 80-percent loan-to-value ratio, the Koch investment will boost Amherst’s home-buying capacity to $2 billion. (Bloomberg)

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