A report from Commercial Property Executive. "The expectation among many in the commercial real estate field is that commercial mortgage lenders are actively looking to make new loans, or refinance existing loans, at very low rates to match. This is just not the case. The spread between U.S. Treasury rates and the going rates in the commercial market has increased due to uncertainty in the market and fears of an extended recession. We are seeing lenders raise their rates, or opt to sit on the sidelines, until the COVID-19 pandemic has passed. Accordingly, commercial loan volume is down drastically, and those loans being made today are being closed with much tougher underwriting requirements."

"The two largest purchasers of apartment loans, Fannie Mae and Freddie Mac, have severely cut back on their lending volume by instituting many changes to make their underwriting more conservative. They have cut back their loan-to-value ratios in many markets that are now on their watchlists. They have discounted commercial or retail income on mixed-use properties due to store closures. And, most importantly, they have instituted reserve requirements that require borrowers to put money in escrow for 9 to 12 months to cover future payments."

"In the past, Fannie Mae and Freddie Mac have financed up to 80 percent of a purchase price without reserves. That allowed an apartment buyer to acquire an asset with as little as 20 percent down. Now that down payments have increased and borrowers need to post reserves, the cost to acquire a property has increased. This has caused a major slowdown in the number of apartment sales nationwide."

"In New York City, for example, residential rents have dropped to their lowest levels in a decade in all boroughs. As brokers are unable to show apartments due to shelter-in-place rules, the number of listings has increased and rents have correspondingly dropped. Before COVID-19, many markets were getting overpriced. Now some of these markets are seeing a reduction in values."

"The coronavirus pandemic has caused serious upheaval in the commercial real estate market and probably will for some time to come. It will take months, and possibly years, for some owners and properties to return to profitability. In the meantime, lenders will continue to make commercial mortgage loans, but with much more conservative underwriting guidelines and with more financial scrutiny."

From Senior Housing News. "When Covid-19 reached U.S. shores, senior living experts predicted a wave of distress, with the most serious issues affecting companies that already were struggling, as well as smaller operators lacking in capital and other resources. These distress situations are indeed emerging as the pandemic intensifies operational pressures and gossamer-thin margins of underperforming or mom-and-pop senior living communities."

"Meanwhile, as early as May, Moody’s warned that senior living companies are facing bond defaults, with some of them describing how Covid-19 has worsened already-precarious financial positions. Industry experts believe that this is only the beginning."

"The CARES Act stimulus is keeping scores of other communities afloat, but when that money runs out, underperforming properties will be back where they started, if not closer to shutting down operations. When that happens, investors are waiting in the wings to acquire assets at a discount. Kong Capital was part of a group that recently acquired a seven-property portfolio, with a purchase price that dropped from $70 million to $52 million as Covid-19 eroded net operating income at the communities."

"Without stronger support, more communities will become distressed and eventually close, starting with facilities that struggled with margins before the pandemic disrupted operations, Blueprint Healthcare Real Estate Advisors Senior Managing Director and Head of Business Development Steve Thomes told SHN."

"Specifically, smaller communities may be more adversely impacted by the occupancy depression affecting senior living. 'If you weren’t solvent and you weren’t doing things the right way pre-crisis, you’re going to get a float from the stimulus. And then you’re probably going to be right back where you were, if not in worse shape,' Thomes said."

"Potentially exacerbating the situation, the pandemic hit just as senior living providers were beginning to recover from a period of oversupply. While sub-par operators might be essentially culled from the marketplace by Covid-19, it’s possible that higher quality providers may also find it impossible to weather the pandemic if their occupancy was already struggling."

"The true extent of distress will not be felt immediately. Thomes expects distress to snowball as CARES Act stimulus ends, particularly if future stimulus packages do not adequately address needs. 'We’re expecting this probably won’t happen for six to eight months, maybe even more. The stimulus has certainly created a kind of an artificial floor for a lot of operators to continue operating,' he said."

From Mansion Global on New York. "Well-managed co-ops also tend to have higher monthly fees than condos, but larger reserve funds, meaning that they can often afford to address repairs or other issues without upping maintenance fees for residents. And the co-ops that do have relatively low maintenance fees are also often offsetting that discount for residents with rents from commercial spaces on-site, a factor that could now negatively affect those buildings as many storefronts remain shuttered indefinitely."

"Contrast that with new construction condos, which are currently scrambling to get buyers in the door, and can face dire financial consequences if they don’t sell enough units on schedule. 'The last time we went through a recession, there were buildings where they got the units finished but hadn’t sold enough apartments to [afford to] finish the pool, the gym, to properly do the lobby or landscaping,' said Melissa Cohn, president of the Melissa Cohn Group at Raveis Mortgage. 'If 50% of the building is empty and not paying common charges, you’re not paying your super or your bills. The budgets for these buildings are on a razor sharp edge because they want to keep common charges as low as possible for marketability.'"

"All of which can harm marketability for individual owners looking to eventually sell. 'You’re not going to be able to re-sell your unit,' Ms. Cohn added. 'How are you going to go up against a developer giving all kinds of concessions?'"

The Guardian on California. "Amid rising coronavirus infections and a worsening economic crisis, hundreds of thousands of renters are now at risk of becoming homeless in California. With so many families facing huge rent debt, advocates are urging the state to act. The only viable solution, some activists say, is rent relief – a move that elected officials have so far resisted."

"'When talking about the scale of eviction and mass displacement, it’s pretty unimaginable,' said Ananya Roy, director of the Institute on Inequality and Democracy at the University of California, Los Angeles (UCLA). The state, she said, was headed towards even more dire conditions than the shanty towns or 'Hoovervilles' of the 1930s. 'This will be worse than the Great Depression.'"

"UCLA researchers have estimated that 495,000 households are at risk of eviction in Los Angeles county. In Silicon Valley, one of the wealthiest regions in the world, 43,000 households are at high risk of eviction, and even if just 10% of them end up homeless, that could triple the region’s unhoused population, one recent report estimated. 'We were in a crisis before. Now we are in a catastrophe,' said Trinidad Ruiz, an LA Tenants Union (LATU) organizer."

The St Louis Post Dispatch in Missouri. "Bridgeport Crossing was one of 12 large complexes that T.E.H. Realty affiliates purchased in the St. Louis region since late 2014. The international firm’s failure to maintain the properties and the tenants’ complaints about poor conditions became the subject of numerous news stories. Most of the properties, each owned by a separate limited liability company, ended up in foreclosure, receivership or scenarios that still are being ironed out."

"Lee Camp, an attorney at Arch City Defenders who represents a Southwest Crossing resident accused of not paying rent, said the receivership case there and other T.E.H. properties 'focuses on the debt and not the people.' 'The law seems to be protecting the banks here, anyone who has a large financial interest in these properties, but the tenants’ concerns don’t seem to be addressed through these processes,' Camp said."

The Daily Pennsylvanian. "In mid-March, Penn announced that the remainder of the spring semester would be conducted remotely after the conclusion of an extended spring break. Students in on-campus housing had until March 15 — just four days — to move out of their dorm rooms, the emailed announcement read. While approximately 450 students received approvals to remain on campus, thousands of other residents rapidly left campus en masse."

"For Ortuño, the most immediate change to campus was the lack of foot traffic on Locust Walk and the surrounding streets, especially during typical class hours. 'Walking to the grocery store on a weekday in the afternoon and seeing empty streets, empty restaurants, everything closed around me, there’s something about that that seemed very post-apocalyptic,' Ortuño said."

"Ergete noticed a similar lack of activity whenever she went out, especially in the earlier period after classes resumed. 'Everyone was gone,' Ergete said. 'The campus was dead. Dead.'"

From The Real Deal. "A lender is seeking to foreclose on the Witkoff Group’s South Beach hotel after it alleges the developer failed to make its July payment on a $45 million loan. Ladder Capital Finance filed a foreclosure lawsuit against the owner of the 181-room Washington Park Hotel and is seeking to collect the entire loan, along with interest and late fees."

"The lawsuit was filed on July 22 in Miami-Dade County Circuit Court and is one of the largest foreclosure lawsuits in South Florida since the coronavirus pandemic began. The boutique Art Deco hotel reopened in 2016 after an extensive renovation. Ladder Capital provided the $45 million loan to the hotel in May 2016. The New York-based lender sent the company a letter of default on July 7, after it alleges Witkoff failed to make a payment on the loan, according to the complaint."

"Since the pandemic began in March, a number of lenders have sought to work with borrowers to offer deferrals. During its second quarter earnings call this week, Ladder said its balance sheet loans had a 98 percent collection rate in July. The exceptions were for one multifamily and one hotel loan, which were either late in payment or going to default. The hotel loan could be for the Washington Park Hotel."

"Experts say that lenders are generally reluctant to foreclose on a property now because they are not interested in taking over or finding a replacement tenant or operator. Still, some are filing foreclosure suits. The lender, BridgeInvest, is seeking to foreclose on the 70-key Variety Hotel in Miami Beach."