A report from Bloomberg. "It was considered one of the root causes of the global financial crisis, and regulators have spent over a decade trying to stamp the practice out. Yet Kroll Bond Rating Agency Inc.’s $2 million fine this week shows how in the securitized-debt market, the battle against ratings shopping was never truly won. Kroll settled with the U.S. Securities and Exchange Commission over its failure to adhere to credit-rating standards for commercial-mortgage bonds and collateralized loan obligations, just months after rival Morningstar Credit Ratings LLC was hit with an even larger penalty by the regulator."

"The recent fines are fueling concerns that rosy credit grades are masking deeper structural problems with the securities. The risks are particularly acute in the CMBS market, where shutdowns stemming from the coronavirus pandemic have battered revenues for malls, hotels and other commercial properties that back the debt, spurring a raft of downgrades."

"'The issue of ratings-shopping and grade inflation is still unresolved,' said Jeffrey Manns, a law professor at George Washington University. 'In good times, these problems don’t matter very much, but in bad times, these intrinsic problems become more salient. It would not be surprising if an economic downturn such as the current one exposes the structural problems of securitization ratings, and that this becomes a focal point.'"

"'The ratings system is broken, unfortunately,' said Marc Joffe, a senior policy analyst at Reason Foundation, a libertarian think tank, and a former employee of Moody’s Analytics and contractor for Kroll. 'While this recession may not be as deep as the last one, there are some similarities. Last time, there was a housing bubble. This time, there was a commercial-property bubble. It just takes one thing to pop it, and this time around, it was Covid.'"

From Bisnow New York. "Some heavy hitters that leased big office spaces propped New York City's office market up a bit in the third quarter, which ended Wednesday, but asking rates and sublease listings show it is still taking a beating from the disruption and uncertainty brought on by the coronavirus pandemic. Overall leasing volume in Manhattan rose by around 50% over Q2, and asking rents suffered their worst quarterly drop in more than 10 years, according Colliers International's Q3 office report released Thursday. Sublease space now makes up its highest share of office inventory since the Great Financial Crisis, according to Colliers and Savills' Q3 report."

"The year-over-year drop-off far surpasses the last two recessions, said Frank Wallach, senior managing director of research at Colliers. 'If leasing activity continues at the same pace for the rest of the year, we’re going to end 2020 with still the lowest year of leasing so far in this century,' he said. 'This is a period in the market where we’re seeing echoes of what we saw in the Great Recession.'"

From Bisnow Washington DC. "The coronavirus pandemic is continuing to hurt the office market in the nation's capital, with demand for office shrinking, a host of sublease space becoming available and vacancy reaching another all-time high. CBRE's report found negative net absorption of 177K SF in the District, bringing the year-to-date occupancy loss to 780K SF. It pegged D.C.'s vacancy rate at 15.4%, a new record high for the market."

"Savills Research Manager Devon Munos said she doesn't see much new demand from tenants on the market. Savills, a tenant rep firm that defines vacancy as the availability rate, pegged D.C.'s rate at 18.1%. 'I think that in the coming quarters we're going to see demand significantly drop,' Munos said. 'There's really just fewer and fewer tenants willing to start the leasing process unless they're forced to by an imminent lease expiration.'"

"The General Services Administration is continuing with its effort to save taxpayer money by consolidating offices and reducing its real estate footprint, which results in negative absorption for the D.C. office market. 'The trend we've seen the past couple years of government downsizing is likely to continue, and that has contributed to increasing vacancy,' Cushman & Wakefield Senior Director of D.C. Metro Research Nate Edwards said."

The Boston Herald in Massachusetts. "A bill that would halt evictions and freeze rents for a year after Gov. Charlie Baker lifts the coronavirus state of emergency has cleared its first major hurdle but faces staunch opposition from landlords who say it would lead to foreclosures, slums and worse."

"'The further people get behind in their rent, the less likely they will ever be able to pay it. If we don’t deal with this problem and we wait another year, there’s a lot of money that will never get paid,' said Greg Vasil, CEO and president of the Greater Boston Real Estate Board. 'It’s the property owners who lose. We’ll see foreclosures and properties will start to fall into disrepair.'"

The Puget Sound Business Journal in Washington. "With Amazon and other tech companies expected to add tens of thousands of jobs on the Eastside in the coming years, developers of multifamily housing are swarming the area. They may be a little early, however. 'I think there’s a lot of excitement in Bellevue, but I think people might be getting a little overly enthusiastic,' said appraiser Brian O’Connor of O’Connor Consulting Group, a Seattle company that advises multifamily developers."

"Across the Puget Sound region, demand for multifamily housing has dropped significantly due to Covid-19 while supply increases, he said. The Eastside is not immune. Still, this has not deterred developers. 'Demand will probably grow, but the development community — they don’t wait for it to grow, they just charge right in,' O’Connor said. 'There’s already an oversupply, especially in the Totem Lake/Redmond area.'"

The Sacramento Bee in California. "It’s been a tumultuous year in downtown Sacramento. Coronavirus sent state workers away, leaving offices empty and sidewalks bare. Restaurants faltered and failed. Civil unrest hit downtown streets, prompting storefronts to board up. Hundreds of housing units are under construction and hundreds more are planned to start soon. Some of the new housing being built will be affordable to residents with lower incomes. However, much of it will be aimed at young, well-paid workers, including emigrees from the Bay Area. The enticements often include dog spas, bicycle parking rooms, pools, gyms and communal barbecue areas."

"Downtown City Councilman Steve Hansen said projects that weren’t quite ready to go when the virus hit face tougher challenges. That includes a key housing project planned at the empty, fenced off Eighth and K streets corner, where developers had hoped this year to build apartments that would have created some much-needed oomph for K Street."

"Instead, they are stuck trying to find new lenders. 'The question is how many that are conceived more recently will be able to go forward given the economic circumstances that could drag our city and downtown into one of the most dramatic recessions we’ve ever seen,' Hansen said."

The Bay Area Newsgroup in California. "High costs, remote work and shuttered bars, restaurants and shops have taken a toll on city living in the Bay Area. And during the covid pandemic, it’s showing up in plummeting Bay Area rents since March, according to a new study by Apartment List. Monthly rent dropped 17.8 percent in San Francisco, the steepest decline in the nation, 9.5 percent in San Jose, 7.9 percent in Oakland and 6.3 percent in Fremont."

"Overall since March, rents are down in 41 of the 100 largest U.S. cities, according to Apartment List. Other cities that have seen big drops are New York (down 11.6 percent), Seattle (off 9.9 percent) and Washington, D.C. (down 8 percent). Omar Maissen, an agent at FM Partners in San Francisco, said sales of apartment buildings and investment condos have fallen as pandemic movers have searched for more space. Small apartment buildings, he added, are 'getting crushed.'"

From the Globe and Mail in Canada. "Scotiabank strategist Hugo Ste Marie noted that apartment rents in Toronto and Vancouver are 'skidding' lower. 'The pandemic has caused some distortion in the supply-demand relationship. On the demand side, fewer foreign students, less immigration, people likely moving out of city centres toward the suburbs, and the rapid adoption of the WFH trend, which we believe is here to stay, could be issues for the sector. On the supply side, less tourism has also likely created an influx of short-term rental units (think of all the folks being unable to rent their condos on Airbnb anymore) on the LT rental market (competing against apartments)… the number of apartments listed in Toronto has sharply increased this year. All those factors pushed the average rent of a two-bedroom unit down 5.5% YOY in Q2, according to the Toronto Real Estate Board … However, another source providing more timely data (PadMapper) has the average rent for a two-bedroom unit off 12% YOY in September in Toronto (-14% in Vancouver).'"

From Mortgage Broker News in Canada. "The Vancouver condo sector might become a buyers’ market soon amid steadily growing inventory and sustained price declines, according to CBC analyst Mark Ting. The market’s average home sales price saw its last peak in January 2018, at $751,632 – a level approximately 8% higher than the reading this month. Meanwhile, active listings swelled to more than 6,000 units, with much of the new volume entering the market in July and August."

"Prices will likely drop further due to surges in Vancouver’s inventory, largely stemming from owners forced to sell because of lost employment. 'Many investors who bought multiple units near the peak of the market that no longer provide cash flow will be forced to sell at a loss,' Ting said."

The Express and Star on the UK. "Robin Lloyd reckons he got off lightly. When his new tenant refused to pay rent, he was £12,000 out of pocket by the time he managed to evict him. 'The average amount amongst other landlords I spoke to was £33,000,' he says, adding the experience with his other rental property, in Shropshire, was even worse. 'I had drugs being sold to kids in my garden by someone who killed one of them with his sword,' he says. 'The judge said he was convinced he had acted in self defence. Curtains were set on fire by the said drug seller, and furniture slashed. Okay, he was a guest of the tenant but you do not need it do you?'"

"Mr Lloyd tells how one of his ex-tenants had begged to rent his flat from him, after he was found sleeping on a pallet in the basement of a café with his pregnant wife. 'The sensible thing to do was walk away. No references, a recent immigrant, benefits, part-time work as a labourer,' he says, but he took pity on the man. 'As soon as he was in there he said, ‘this is my home now, I live here’ and refused to pay rent.'"

"Mr Lloyd adds that the man continued to claim housing benefit while living rent-free, and even complained about the lack of a view from the window. 'Property no longer makes a profit for me,' he says. 'I hang on for my pension to kick in. If not for that I would be ‘financially embarrassed’ as they say in polite society.'"

"Bernie Lewis, chairman of Wrekin Landlords Association, says the group has lost 18 members over the past three years because they had decided being a landlord was no longer worthwhile. 'When people used to ask me where to invest their money, I always used to say that property was the best investment you can make, but I wouldn’t recommend it today,' he says. 'We’re all very concerned. It’s nowhere near as attractive as it was 20 years ago, and it’s getting worse.'"

"Another problem is ‘accidental’ landlords, who maybe through bereavement or a change in family circumstances, find themselves with an empty property they are unable to sell. Mr Lewis says they very quickly find they are ill prepared for the work required. 'They think ‘I’ll rent that out’, but they have no idea of what you have to do,' he said of the work involved."

From Bloomberg on Hong Kong. "There’s a saying in Hong Kong property circles that if the city’s richest man, Li Ka-Shing, is selling, you don’t want to be the buyer. Now, a group of investors who paid $5.2 billion for Li’s stake in The Centre almost three years ago — making it the world’s most expensive skyscraper — is finding out why. After initially making quick profits flipping floors in the 73-story tower, the combination of anti-government protests, the coronavirus pandemic and escalating US-China tensions has seen vacancies surge, rents drop and dealmaking dry up."

"Just one sale has been made this year — at a 35 per cent discount to early 2019 prices, according to property-data provider Real Capital Analytics. Almost one-fifth of the building is empty — one of the highest vacancy rates in Hong Kong’s sought-after central business district — and rents are down about 20 per cent from a year ago."

"'It was a reasonable investment decision back then,' said Thomas Lam, an executive director at Knight Frank LLP. 'Market prices were higher than the average cost the group paid, and flipping floors seemed easy. But now, as rental yields and office demand decline amid the worsening economy, buyers are much more reserved.'"

"All that has put the buyers in a hole. 'These guys were hoping to flip the properties at a 30 per cent gain straight away, but they’ve been caught out by other factors,' said Phillip Zhong, a real estate analyst at Morningstar Investment Service. 'Rental income may not cover interest payments on loans to finance the deal, meaning even selling at the initial cost price would mean taking a big hit overall.'"

"The most high-profile members of the group are Ma Ah-muk and Pollyanna Chu, who initially took 13 and seven floors respectively. Chu had a lengthy spell as Hong Kong’s richest woman, but despite her family empire now spanning hotels and watchmakers, her net worth today is a fraction of what it used to be."