A report from Market Watch. "The coronavirus pandemic has turned the $4.4 trillion U.S. commercial real estate finance market upside down. Moody’s analysts warned that property-level 'cash-flow stress, particularly across hotels and retail properties,' will trigger more defaults. In the first two weeks of the U.S. coronavirus outbreak, more than 2,600 borrowers with CMBS loans sought potential debt relief, according to Fitch Ratings, which tracked 47% of the relief requests to hotel assets and 30% to retail properties."

"How bad could things get? After commercial property spent years soaring to new heights, values slipped 1.3% in March, according to Green Street’s Commercial Property Price Index, and the real estate tracker’s Peter Rothemund sees potential for the hardest-hit sectors to tumble 30%."

From Bisnow. "Pending commercial real estate transactions are falling through more often as buyers change price expectations amid the coronavirus pandemic and economic slowdown. In another sign of market weakness and illiquidity, the number of buyers dwindled. The sharp drop comes as financing for many property types, from student housing to fully leased office buildings, becomes less available and buyers become more uncertain of likely revenues, especially in the short-term."

"Investors and brokers say many in capital markets are effectively on the sidelines, at least until a more firm timeline for reopening arises. 'A rising number of busted deals shows that participants saw the growing economic calamity and realized that the assumptions they had in place for transactions no longer worked,' RCA Senior Vice President Jim Costello wrote."

From Real Estate Weekly on New York. "New figures from the Rent Guidelines Board paint a grim picture of the city’s stock of stabilized housing, according to landlord groups. 'Building operating expenses continue to increase faster than building income,' said Joe Strasburg, president of the Rent Stabilization Association, which represents 25,000 landlords of the nearly 1 million rent-stabilized apartments in the five borough. 'This is the formula for a housing disaster – and coupled with the draconian changes to the state rent laws last year, we are heading down that road fast.'"

"In its latest Income and Expense Report, which the city uses to calculate annual rent increases on rent-stabilized housing units, the RGB found net operating income of rent-stabilized landlords fell in 2018 for the first time in more than a decade."

The Southwest Journal in Minnesota. "Some Minnesota landlords have barely registered a change in payment, while others have seen a jump to 25% nonpayment, according to a recent survey of 28,000 units by the Minnesota Multi Housing Association. Dawn Zugay, interim co-executive director of the Conflict Resolution Center in the Wedge, expects to handle more remote mediation sessions between renters and landlords while the courts are closed. 'There aren’t a lot of other alternatives right now and everybody’s facing a crisis,' she said."

"She’s hearing from renters who can’t pay rent and landlords who can’t pay the mortgage. 'There’s a lot of desperation on both sides,' she said."

From Bisnow on Massachusetts. "Massachusetts is poised to enact a moratorium on most eviction and foreclosure proceedings, which property owners say will give tenants a free ride at their expense. Landlords fear tenants will take advantage of the moratorium's protections and quit paying rent even if the pandemic hasn't hurt them. 'This whole approach, in my opinion, is completely wrong,' said Ray Smalley, who owns three apartment properties in Holyoke. 'If the tenants can't pay the rent, the landlords can't pay the mortgage. The bank can't pay its investors. Do we want the whole financial system to collapse?'"

From KQED in California. "On April 6, the state Judicial Council suspended new eviction filings for 90 days after the state of emergency is lifted. It was a decision that tipped the balance of power in favor of tenants, according to attorneys who represent both landlords and renters, and one that property law experts and activists say could have major ripple effects across California's housing market for months, if not years, to come."

"'It used to be a landlords’ market, but now it’s a renters’ market,' said Gustavo Lopez, a realtor and property manager for a dozen rentals in the San Francisco Bay Area. 'Nobody saw this coming.'"

"Andy Kim and his wife purchased a four-unit apartment building in Oakland’s Eastmont neighborhood last year. Most of the tenants use Section 8 vouchers to subsidize their rents, Kim said. And two of them couldn’t make payments this month. Kim said he has no plans to evict his tenants. But he doesn’t know how long he can cover his mortgage without their rent."

"'We can do maybe six months, and then we’ll be forced to sell the building,' he said, adding that the time frame includes getting his bank to agree to a forbearance on the mortgage and taking out loans. 'If I don’t pay for April, May and June, my bank won’t charge interest, but come July, I have to pay in full,' he said. 'And if I don’t pay anything until then, I will have a really big bill.'"

The Redlands Daily Facts in California. "It turns out that all those bills the Legislature passed over the last 18 months to make denser housing commonplace in California for relief of the longtime housing crunch may suddenly be rendered irrelevant by a virus. Gov. Gavin Newsom spent much of the last two years lecturing California citizens and cities that they must OK construction of 3.5 million new dwelling units before the end of 2025 to slake California’s thirst for housing. That would have been a pace of about 700,000 new units per year, roughly five times what was actually built in Newsom’s first full year as governor and far more units than there are financially qualified buyers."

"Countless corporations, from telemarketers to newspapers and law firms, have sent their white-collar workers home to use kitchen and dining room tables while cubicles stand empty. Millions of square feet of office space, maybe billions, are idle."

"No dummies, some executives now realize they never really needed all that office space. And some workers are coming to understand they don’t really need to spend hours each day fighting traffic jams. What happens then to all that office space? Already the owners — including real estate investment trusts (REITs) whose shareholders suddenly see their stock values plummeting and dividends drying up – are near panic."

"Said one multi-billion-dollar REIT (or is it really worth that much now, with tenants refusing to pay rent and government edicts preventing evictions?) in a letter to stockholders, 'The COVID-19 pandemic has drastically impacted the viability and valuation of almost all types of commercial real estate.' The solution to that REIT’s problem is obvious — and it’s also the answer to California’s housing problem: Sell off a lot of that office space as apartments and condominiums."

From Real Estate Miami Beach in Florida. "The developers of Eighteen Sunset, approved as a luxury residential building with retail and restaurant space in Miami Beach’s Sunset Harbour, are now proposing Class A office space as the primary use instead. Deco Capital Managing Principal Bradley Colmer said the change has been contemplated for more than year following feedback from a 'soft marketing' effort for the residential units. 'Given the glut of inventory that’s out there in almost every sector of the residential market and also the additional cost a luxury condo product entails,' Colmer said, the developers began looking at the office market."

From 12 News in Arizona. "A month after Arizona's three major universities canceled all in-person classes and moved to online-only classes, some students are still living in campus housing. 'It's almost like a ghost town,' Katey Waszkiewicz said. 'It's really empty, which is crazy.' Waszkiewicz is one of a handful of students still living in Taylor Place, a dorm on ASU's downtown campus. 'There's probably like five of us left on my floor,' ASU student Susan Wong said."

"Waszkiewicz said she's staying in the dorm because she had already paid for the room. Wong said she thought it was safer in Phoenix than back home in San Francisco, a coronavirus hotspot. Students at all three universities had demanded refunds for room and board costs after being told the universities were basically shutting down and students were encouraged to leave. After some back and forth, all three universities decided on plans that give refunds, though mainly through credit toward housing costs, not cash."

"'I didn’t even think it was a question,' NAU student Payton Romney said. 'They said, 'Oh, don’t come back,' so we assumed, OK, we'll get a refund.' NAU initially decided not to give refunds but changed its mind weeks later."