A report from Bloomberg. "The Federal Reserve warned of significant risks of business bankruptcies and steep drops in commercial real estate prices in a report published on Friday. 'Business leverage now stands near historical highs,' the central bank said in its semi-annual Monetary Policy Report to Congress. 'Insolvency risks at small and medium-sized firms, as well as at some large firms, remain considerable.'"

"In particular, it said that commercial real estate prices 'appear susceptible to sharp declines' from historically high levels. That could particularly prove to be the case if the level of distressed sales picks up or if the pandemic leads to longer-term declines in demand, it said."

From Yahoo News. "The continued acceleration in Chapter 11 filings is a clear sign that business owners should prepare for the pandemic’s impact to last longer than was originally planned. Chapter 11 bankruptcy filings increased again in the fourth quarter, as seen in the newest Polsinelli-TrBK Distress Indices Report."

"'We always knew the ongoing pandemic would create a rapid rise in Chapter 11 filings, but we didn’t expect that the filing data would look so similar to the recession of 2011. However, we do anticipate more general filings and distress throughout 2021, with spikes in real estate and health care,' said Jeremy Johnson, a bankruptcy and restructuring attorney. 'We recommend that companies avoid filing unless it’s a defense matter (disallowing a creditor from taking enforcement action) or offensive (to implement a deal with lenders or other creditors).'"

The Hartford Courant. "The Capital Region Development Authority — the quasi-public agency which has pumped tens of millions of state taxpayer-backed dollars into apartment projects in and around downtown Hartford— will lose a $5 million investment now that a New York lender which financed the bulk of a rental conversion at downtown’s Red Lion Hotel has foreclosed on the property."

"The loss is the first major one for CRDA, which has helped finance more than 1,500 units since it was founded in 2012. At the Red Lion Hotel, the developer, Inner Circle US, defaulted on the primary loan financing the conversion of the top nine floors into 96 apartments. Inner Circle ran into heavy cost overruns that stalled the project for two years."

The Real Deal on New York. "Westchester County developer DeNardo Capital filed for Chapter 11 bankruptcy Tuesday, stopping a planned foreclosure auction on its luxury condo project. Greenwich, Connecticut–based SilverPoint Capital was planning a UCC foreclosure sale on interests in the Marker 27 project in Irvington, New York. The sale was scheduled for Feb. 18, according to marketing materials."

"While a moratorium on traditional commercial foreclosures is in place, lenders are allowed to proceed with UCC foreclosures as these actions can bypass state courts. Other New York developers have filed for bankruptcy to avoid a UCC foreclosure. For example, the owner of the Tillary Hotel in downtown Brooklyn filed for Chapter 11 in December the same day that a UCC foreclosure sale was planned."

The Commercial Observer. "Coworking giant WeWork has closed its location at 25 Broadway nearly eight years after it first signed on for the space, the company confirmed. WeWork has shed locations around the country in recent months to try to achieve profitability by the end of this year. A source familiar with WeWork’s financials previously told CO WeWork cut its cash burn nearly in half as of the third quarter of 2020 and reduced its long-term lease liabilities by more than $1.5 billion."

From Bisnow. "A string of hotel bankruptcy cases have been filed in the last two months, and hospitality finance experts believe this trend will continue to increase as owners of still-struggling hotels remain unable to pay their debt service and lenders are less flexible than they were a year ago. Every day that passes with hotel occupancies remaining low means more lenders leaning toward foreclosing on properties."

"'One of the reasons we're starting to see increased activity in terms of foreclosures now is lenders don't have the same sense of patience, and they don't have much confidence in a sharp rebound,' said Herrick Feinstein, a New York-based bankruptcy lawyer."

"The average occupancy rate for all U.S. hotels during the week ending Feb. 6 was 40.9%, according to STR, down more than 30% from the same time last year. Average daily rate was down 29% from 2020 levels. Revenue per available room, a key hotel performance metric that can determine whether a property is profitable, was down 50.6% from last year."

The Chicago Tribune in Illinois. "A Bucktown property that was featured on 'Windy City Rehab,' but did not end up being renovated on the HGTV show, sold last week after nearly a year on the market, a major price cut and a tree dispute. The gutted three-unit building at 1846 N. Damen Ave. sold Feb. 12 for $575,000 to a developer that also purchased a neighboring property for $575,000, real estate agent Vincent Anzalone said."

"The property at 1846 N. Damen Ave., which also features two residential units, went on the market in March 2020 for $999,000. Hot N Cold LLC purchased it for $949,000 in February 2019, online records show. Alison Victoria Gramenos is the host of 'Windy City Rehab,' which follows her as she purchases, renovates and flips Chicago homes. Gramenos said on the Season 2 finale she was selling the Damen property to 'stop the bleeding.' She hoped to break even."

"Gramenos and Eckhardt, meanwhile, are facing fraud lawsuits from a Lincoln Square couple who purchased a home featured on the first season; and a family of investors who said they were not properly repaid. Other litigation has been dropped. HGTV has not announced if 'Windy City Rehab' will return for a third season."

From Socket Site in California. "Leasing activity across a sample of ten of the larger apartment buildings we’re tracking in San Francisco has ticked up, driving the average vacancy rate for the cross section of 3,600 units down to around 7.5 percent, driven by aggressive discounting and incentives to sign a new lease. There are still 140 percent more apartments listed for rent in San Francisco than there were at the same time last year and asking rents remain down an average of 25 percent on a year-over-year basis, and 35 percent below a 2015-era peak, with the average asking rent for a studio having slipped under $1,900 a month for the first time since 2010."

The Moorpark Acorn in California. "'2020 was another good year for Moorpark on the industrial side. The market was really strong with very few buildings available,' said Mike Tingus, a commercial real estate broker and president of Lee & Associates in Los Angeles and Ventura. '(But) the retail world is definitely going to change forever.'"

"A vast majority also expected landlords to make various concessions such as rent relief, extended leases or rent deferral to keep tenants. Ken Simons, a former Moorpark City Council member and vice president of NAI Capital Westlake Village, said he has seen some of these comprises take place as buyers ask for greater discounts during COVID-19 and as landlords build pandemic-related clauses into their leases."

"'You have buyers who are looking for better deals and sellers thinking, ‘Why do I give my property away now?’ he said. 'There have been deferments of payments and there has been waiving of payments. It’s still in transition, and no one knows when we’re going to be out of the pandemic.'"

The Dallas Morning News. "One of North Texas’ largest commercial property firms is planning to cut jobs almost a year after the start of the COVID-19 pandemic. CBRE — the country’s biggest commercial real estate company, which recently shifted its headquarters from California to Dallas — notified the state that it plans to lay off 193 Dallas-area employees starting in April."

"The COVID-19 pandemic has challenged many sectors of the local real estate market. While residential property sales have boomed and industrial building transactions have set records, other real estate sectors, including office and retail leasing and hotels, have seen sharp declines."