Two reports from the Wall Street Journal. "Brookfield Property Partners is canceling plans to redevelop a former Vermont mall as an office and residential development, a sign that the slumping economy could be upending the firm’s strategy of buying and repurposing faltering malls. The giant real-estate firm became involved in the Burlington project in 2017. Brookfield demolished the shopping mall and planned to build apartments and a 10-story office tower. Last month, Brookfield said it is selling its interest in the project, now an empty site, to its local partner, Devonwood Investors LLC."

"'They understand that their reputation is at stake here,' said Burlington Mayor Miro Weinberger, adding that Brookfield’s decision to exit without getting another comparable, deep-pocketed entity to replace it is 'a breach of faith and a betrayal of trust.'"

"Urban office markets and other commercial real estate in major cities are experiencing their worst stretch in decades, upended by the pandemic, changes in work behavior and struggling city economies. Some pain is already being felt. After closures of urban hotels and retail stores in recent weeks, property analysts worry that the office sector could be next to feel the pinch."

"The slide after 2008 was a valuation crisis, said James Shevlin, president of commercial real-estate firm CWCapital. Most buildings continued to produce steady income, but property values fell as capital markets seized up, leaving overleveraged owners unable to refinance their mortgages."

"Today, the industry faces a liquidity crisis, Mr. Shevlin said, leaving many property owners without the cash to make their monthly mortgage payments. 'If we can’t figure this stuff out by the end of the year,' he said, 'then we’re going to have some problems.'"

From National Mortgage News. "Multifamily mortgage originations could be down between 20% and 40% this year, according to Freddie Mac. 'Last year's numbers pointed to a robust and diverse multifamily lending environment, but conditions have changed with the onset of the COVID-19 pandemic, the greatest being increased uncertainty,' said Jamie Woodwell, the MBA's vice president of commercial real estate research. 'Demand for refinancing because of low rates, particularly for government-backed loans, is unlikely to overcome a drop in sales transactions, which means multifamily borrowing and lending is likely to drop this year.'"

From Mortgage Professional America. "Evidence of distress in the commercial real estate realm is mounting. U.S. commercial real estate transaction activity plunged in the second quarter as the COVID-19 pandemic continues to cripple deal making. Real Capital Analytics (RCA) reports a 68% drop in transaction volume, the lowest level of a second quarter since the global financial crisis."

"'There’s a lot of interest in distressed properties and loans and while they do exist, there's is still a real disconnect between buyers and sellers on what the price should be for those,' said Carol Faber, partner and co-chair distressed property practice at Akerman Law. 'Owners still have a perception that their property is worth more, while opportunistic buyers are just looking for a great deal and aren’t inclined to buy anything until they feel the market has reached that point.'"

"'We’re at a tipping point. There’s no way to quantify it yet, but there will be a lot of distressed loans and properties coming up. Certain industries will be more challenged, hospitality and retail mainly, and that's where there will probably be the most opportunities,' she said."

From Senior Housing News. "Covid-19 has made 'density' a dirty word in real estate, and senior living developers are taking heed. Some data indicate an exodus is occurring from the most densely populated urban centers in the United States, in part because people are wary of coronavirus outbreaks like the one that beleaguered New York City in the early days of the pandemic. 'I think that you’re going to see a lot of de-urbanization,' Anthology Senior Living President Ben Burke told SHN. For some people, Burke observed, 'The benefits of living in an urban area are not outweighing the increased price per square foot of urban areas.'"

"Some data points suggest that a flight from the nation’s largest cities is already underway. 'Early indicators are pointing to an exodus from many densely populated urban centers,' according to the June 2020 National Multifamily Report from Yardi Matrix. New York City was hit hard by Covid-19 in the spring, causing people to leave the city 'in droves,' Bisnow reported. An excess of inventory has caused rents to drop across the Big Apple, with average rent in Manhattan declining 6.4% between March and June, according to MNS Real Estate data."

"With the fate of so many companies and industries up in the air, finding tenants to fill mixed-use real estate development projects could become dicier. In just one high-profile example, Neiman Marcus is closing its 250,000-square-foot Hudson Yards location, creating a 'gaping wound' that developer Related Cos. will be hard-pressed to fill, AdWeek’s Diana Pearl wrote."

From Multi-Housing News. "The coronavirus crisis boosted vacancies in high-end apartment properties across the U.S. as many residents fled urban centers, adding to the impact of a wave of construction. Class A multifamily vacancy rose 80 basis points to 5.7 percent between the first and second quarters of this year, driven in part by residents seeking lower-cost or more spacious homes, according to Marcus & Millichap. Overlapping with the health crisis, roughly 23,000 more apartments opened in the first half of the year than in the same period of 2019 and new absorption was down 75 percent."

"Upscale rental units were more exposed to the trend of wealthy urban residents packing their bags during the pandemic. For example, some 420,000 people are estimated to have left New York City during March and April, representing 5 percent of the city’s population, according to a New York Times report drawing on smartphone data."

The Washingtonian. "All those glassy, luxury buildings that have risen around the city in recent years have become emptier and less expensive since Covid-19 hit. Within the District, rents in high-end buildings are down 3.5 percent compared to last year, in large part because those apartments are having to offer discounts to attract residents. Average rent for a luxury DC apartment is currently $2,561 a month, compared to $2,649 last June."

"Prices have been particularly affected around NoMa and H Street, where buildings are offering an average 6.3 percent discount off full-price rent, and around Capitol Riverfront and the Southwest Waterfront, where they’re knocking off 5.7 percent. Vacancies in those neighborhoods are also the highest. NoMa and H Street apartments are experiencing an 8.2 percent vacancy rate, while developments in Navy Yard and Southwest are seeing 7.7 percent vacancy. The vacancy rates in those areas were less than 5 percent at the same time last year."

"And the supply of available apartments is only headed upward: Delta reports that over the next 36 months, more than 42,000 newly built units are expected to be completed across the DC-metro area."

The Palm Beach Post in Florida. "Locally, the COVID-19 pandemic continues to have a devastating impact on the hotel industry and its employees, with Palm Beach County hotels experiencing occupancy rates and staffing levels far below normal. A stunning, record 32.5% contraction in the nation’s gross domestic product was no surprise to America’s hoteliers. Only 37 percent of U.S. hotels have brought back at least half of their employees."

"Peter Ricci, Florida Atlantic University professor and director of the Hospitality & Management Program in its College of Business, said tourism and its resultant taxes drive the state’s economy. 'Since the 1970s, Florida has relied upon tourism as either the number one or number two driver of its economy,' Ricci said. 'A lingering COVID-19 pandemic is certain to create tremendous budget shortfalls in 2021 and possibly longer. Every state agency and its ability to offer services will be impacted should the tax collections remain at these historically low levels.'"

"Palm Beach County has approximately 170 hotels with more than 16,000 rooms. Tourism is a leading industry in Florida and Palm Beach County. The county normally draws 7 million tourists a year with a $7 billion economic impact. Ricci said he doesn’t expect hiring levels to increase by the end of the year. He isn’t surprised by the national survey results, because locally he is hearing occupancy rates are 15% to 40%."

"'I have lived through SARS and 9-11, the 2008 recession and the ’80s recession, and all these other things. I have seen the industry regroup and refocus. They just can’t do that right now,' Ricci said."

From Bisnow on California. "Lennar Multifamily Communities, the multifamily development subsidiary of national homebuilder Lennar, has started leasing at 19th & Harrison, its new 224-unit Uptown Oakland mid-rise, the developer said last month. 'What's challenging for people in Oakland is that the market-rate units are getting built faster than the affordable units because it's much harder to finance affordable housing, period,' said Tomiquia Moss, chief executive of All Home, a Bay Area-based organization promoting economic mobility for homeless extremely low-income people."

"'We need a pipeline of resources and affordable housing production that is commensurate with the need, and we don't have that right now. My worry is that we've overproduced the market-rate units,' Moss said."

"Though LMC Vice President of Development Tyler Wood said LMC 'knew Oakland would be a competitive market when we began this project,' the developer is offering concessions similar to those offered by other Oakland multifamily developers. Current concessions at 19th & Harrison include two months of free rent and amount to about a 16% or 17% discount off gross asking rent, according to Wood."

From KPIX in California. "The economic fallout from the coronavirus pandemic has caused the Bay Area’s once skyrocketing rental housing market to come back to Earth. 'The balance of power has absolutely shifted,' says Jeff Tucker, an economist with Zillow. Tucker says there’s an opportunity to shave hundreds off your rent if you do your homework and are willing to negotiate."

"'If you can say, ‘There’s this vacant unit. It looks similar to mine. I think I might move there. It costs $200 or $300 less than what I’m paying now.’ That might be really convincing,' says Tucker."

From Socket Site in California. "The weighted average asking rent for an apartment in San Francisco has dropped another 4 percent over the past few weeks and is now down to $3,700 a month. While $3,700 a month isn’t exactly 'cheap,' it’s nearly 10 percent, or $400 per month, cheaper than just four months ago, 14 percent ($600) cheaper than at the same time last year and over 17 percent ($750) cheaper than a 2015-era peak of around $4,450 per month."

"The average asking rent for a one-bedroom in the city is now back under $3,200 a month, having peaked at closer to $3,700, as well. At the same time, offers of complimentary rent and cash concessions are on the rise, driving effective rents down even more."

From Spectrum News on California. "Embattled Los Angeles City Councilman Jose Huizar pleaded not guilty Monday to charges in a 34-count federal grand jury indictment against him in a sweeping corruption probe. Huizar was arrested and charged with racketeering in June, and now faces additional charges including bribery, money laundering, wire fraud and tax evasion in the wide-ranging probe that alleges a pay-to-play conspiracy involving Huizar, his associates and real estate developers seeking to build massive projects in Los Angeles."

"U.S. attorney prosecutors claim Huizar led an extensive racketeering conspiracy, aimed at shaking down developers for bribes to enrich the members of the enterprise with cash and political power, in return for greenlighting real estate projects."

"When the Luxe Hotel redevelopment project was going through the city planning process in 2017, Darryl Holter was watching closely. Holter is CEO of the Shammas Group, and his family owns the Petroleum Building next door to the Luxe. He voiced concerns about the renderings proposed by Chinese development company Shenzhen Hazens, mainly over the size and scale of the proposed multi-tower property."

"But he also worried that the luxury condos Huizar seemed so eager to approve would price people out while possibly sitting empty. 'I think my main objection was based on luxury housing for people that aren’t really living here. And that to me seems really wasteful. We have a housing crisis. We have a homeless crisis. These things are related. I would like to see housing for people that work for a living. People that are trying to raise a family and trying to do what the American dream is all about,' Holter said."