A weekend topic starting with the Wall Street Journal. "Pension giant California Public Employees’ Retirement System is projecting malls will lose some of their value in the second quarter, according to an internal estimate. The investment chief of the Chicago Teachers’ Pension Fund is expecting the worth of student housing to drop. 'If you talk to anyone who says that they know exactly where the market is going and that they have all of the answers, they really don’t know,' said Chicago Teachers’ investment chief Angela Miller-May."

"Pensions are $4.9 trillion short of what they have promised retirees as of the first quarter, according to the Federal Reserve. The shortfall stems from years of over-optimistic investment assumptions and government decisions to skimp on annual retirement fund contributions."

From Bisnow. "The retail industry has been one of the most severely impacted sectors in commercial real estate. Millions of retail workers have been furloughed or laid off. Thousands of retailers have closed, and of those that have remained open, only half are able to pay rent. In Brea, a suburb of Orange County, Simon Property Group said it would convert a former Sears department store into a mixed-use development that includes housing, restaurants and a fitness center. Macerich and Hudson Pacific Property are converting the former Westside Pavilion Mall in West Los Angeles into a 584K SF creative office."

"While rent collections in this sector have improved since May, this sector lags behind other CRE sectors, with rent collections under 60% in the month of June, according to RCLO. 'Retail is in a serious downturn and still headed lower,' RCLCO’s Mid-Year 2020 Sentiment Survey said."

"One of retail's biggest problems? There's too much of it, said David Sheldon, a practice leader with Perkins and Will. The U.S. has almost 25 SF of retail per person, Sheldon said, while China and Europe have 2.8 SF and 3.8 SF of retail per person on average, respectively."

From McKnight's Senior Living. "Senior housing occupancy in the second quarter was at the lowest level on record since the National Investment Center for Seniors Housing & Care began reporting data in 2006, NIC said. Assisted living is pulling down the average, said NIC Chief Economist Beth Burnham. 'That’s been the case for a while, even pre-COVID,' she said. 'That had to do with the fact there was a lot more construction that had happened in assisted living more so than independent living. And a lot of construction in assisted living was more than the market could readily absorb. If you look at the actual rate of absorption, that was a –0.5%. That’s never happened, that level.'"

From Community Impact on Texas. "The Dallas-Fort Worth real estate market overall has fared well through the pandemic, said JP Piccinini, CEO and founder of JP and Associates Realtors. And there are not enough existing homes on the market to support the serious buyers and meet their needs, he said. However, the opposite is happening in the multifamily sector, Piccinini said. Realtors are now seeing what they refer to as a 'bubble' in this market, he said."

The New York Times. "The coronavirus lockdown has hit New York City’s rental market hard, driving Manhattan vacancy rates to their highest level in 14 years and pushing the number of June new lease signings to the lowest level seen in nearly a decade, according to a new report from the brokerage Douglas Elliman. John Walkup of UrbanDigs said nearly 1,500 new Manhattan listings came on the market the week of the reopening, about 500 more than you’d see in a normal June. 'And while we’ve seen a slow but steady increase in leases signed, it’s low compared to last year, so the question is 'What will happen with that excess inventory?'"

"'Everything is supply and demand,' said Gary Malin, chief operating officer of the Corcoran Group. 'And there’s a lot of supply but much less demand. Now that everyone is beginning to see what is out there, owners will modify their prices.'"

From Naples News in Florida. "The two companies behind the Bay Club development in Crayton Cove have filed for bankruptcy protection, seeing it as a way to 'capture the value of the property' and move the long-awaited condo-retail project forward. It's the third time the sister companies — tied to Naples developer Harry Zea — have been entangled in a bankruptcy. The other cases ended in dismissal."

"Last year, the city determined Zea took his renovation of the south building too far, eventually leading to condemnation, then an order for the partly demolished commercial building to come down completely. The building sat idle for nearly a year with rubble all around it and became a neighborhood eyesore, earning the nickname — Fallujah — referring to the war-torn city in Iraq."

The Los Angeles Times in California. "Bidding has commenced in an auction of the Viceroy L’Ermitage Beverly Hills, a legendary hotel last owned by a highflying Malaysian investor now on the lam after being accused of embezzling billions of dollars from his country’s government. In 2012, Low turned heads when he dropped a whopping $38.98 million on his Hollywood Hills estate, redefining what a home could sell for in the celebrity-filled Bird Streets neighborhood. Federal authorities seized the property and sold it for $18.5 million in March."

"The hotel market is depressed now, hobbled by the pandemic, which has damped travel around the world, industry analyst Alan Reay said. Sales of hotels in California were down 90% from April 1 to the middle of June compared with the same period last year, he said, 'so for all intents and purposes the sales market has come to a grinding halt.'"

The Associated Press on Oregon. "A steep drop in lottery funds due to the COVID-19 crisis has killed the sale of $273 million in state bonds to pay for major projects in Oregon, the Bulletin newspaper of Bend reported. The 37 projects authorized by the Legislature at the end of the 2019 session include water system overhauls in Warm Springs and Salem, rehabilitating the Wallowa Lake Dam, a Deschutes Basin piping project, two affordable housing projects, a new YMCA for Eugene and deepening the Coos Bay channel."

"'There’s not enough money — there is no repair,' said Sen. Betsy Johnson, D-Scappoose, a chair on the budget-writing Joint Ways and Means Committee. 'It’s all or none,' said Sen. Bill Hansell, R-Athena, a member of the Joint Ways and Means Committee. 'If we don’t sell one, we don’t sell any. The lottery revenue has just cratered. We already have debt service on projects funded in earlier cycles.'"