A weekend topic starting with the Laguna Beach Independent in California. "A court-appointed receiver reported Friday that debts are racking up at real estate developer Mohammad Honarkar’s portfolio of 18 hospitality and event properties in Laguna Beach, according to court records. Honarkar’s properties, with the exception of Hotel Laguna, have been under the control of court-appointed receivership overseen by San Diego-based receiver Douglas P. Wilson since mid-January. Among the issues Wilson has confronted is a six-figure sum owed to the city of Laguna Beach."

"The Holiday Inn at 696 S. Coast Hwy., 14 West, The Retreat at 729 Ocean Front, and a collection of short-term rental properties on Sleepy Hollow Lane collectively owe $650,000 in unpaid transient occupancy taxes, penalties, and interest to Laguna Beach."

The New York Post. "In a surprise happy ending to the city’s most convoluted luxury-hotel saga, the Times Square Edition will reopen on June 1 – even as its skyscraper home races toward foreclosure. The hotel is the largest portion of 701 Seventh Ave., a 42-story, mixed-use building which chief lender Natixis is attempting to seize from defaulted landlord Maefield Development. Until the limbo ends, 701 Seventh Ave. is still owned by Maefield, led by Mark Siffin, which defaulted on a $600 million Natixis mortgage nearly two years ago. The loan was part of a much larger debt package involving Maefield, several partners, and principal and mezzanine lenders that could total as much as nearly $2 billion, sources said."

The Real Deal on New York. "As the dust settles on the pandemic’s devastation of retail, smaller business owners are seizing on the market’s weakness. Stacey Fraser, the owner of childrens’ clothing store Pink Chicken, shuttered her four stores last spring, but managed to stay afloat thanks to a Paycheck Protection Program loan, the New York Times reported. By fall, dead storefronts lined Bleecker Street, but spelled potential for the entrepreneur."

"She snapped up two commercial spaces along the Greenwich Village corridor, one two doors down from famed Magnolia Bakery with an asking rent about half of what it would have been in 2016, Douglas Elliman’s Louis Puopolo told the Times."

From Bisnow New York. "When it comes to the return to the office, uncertainty still looms across most markets. In places like New York City, landlords are still reporting occupancy levels in buildings at less than 15%. 'Now a lot of people are using the hybrid model as a way to recruit talent … and office landlords are mired in an existential crisis, no one knows how this is going to play out longer-term in office demand and office space usage,' said Bisnow Atlanta reporter Jarred Schenke, who has been reporting this week on various workplaces' approaches to having their workers return."

From Inside Nova in Virginia. "Arlington apartment rents continue to battle back from the beating they took last year. But Arlington still has a hole to dig out of. Its median rents remain down 5.2 percent from pre-pandemic levels, the eighth largest drop among the 100 largest localities. Consider the case of San Francisco, just about the priciest rental market in the nation and one that saw a 26-percent decline from pre-pandemic levels at the depths of the economic freefall last year."

"Others that still have deep holes to emerge from: Oakland (down 13 percent), New York (off 12 percent), Seattle (down 11 percent) and San Jose (off 9 percent). The District of Columbia still has a shortfall of 9 percent, as well."

The Cleveland Business Journal in Ohio. "Reserve Square — downtown Cleveland's largest mixed-use property — has been having trouble making its mortgage payments because of the Covid-19 pandemic. Since April 2020, the dual, 23-floor apartment complex has been making smaller mortgage payments under a forbearance plan approved by the Federal Home Loan Mortgage Corp., better known as Fannie Mae, said Doug Price, CEO of K&D Group, the Willoughby, Ohio-based owner and manager of Reserve Square."

"The pandemic hit in March 2020. 'So overnight, we lost 20% of our business,' Price said."

From Bloomberg on Nevada. "A loan tied to a beleaguered mall outside of Las Vegas realised a loss of 120 per cent after the shopping centre sold for about the same price as a condo. The loan, which had a current balance of US$62.2 million, was completely written down after the Prizm Outlets were liquidated for just over US$400,000, according to Bank of America Corp (BOA). When accounting for US$11.5 million in fees and reimbursements owed to the master servicer for advances made, the total realised loss came out to US$74 million."

"That's the largest loss - both in terms of dollar amount and as a percent of the original loan balance - for a commercial mortgage backed conduit loan since the 2008 financial crisis, BOA analysts Alan Todd, Mao Ding and Graham Voss wrote. It's vindication for traders who bet against retail using the so-called CMBX 6, a commercial real estate credit derivatives index with heavy exposure to shopping centres and malls. This is the first payout to those who shorted the index, including billionaire investor Carl Icahn."

"'We believe these mortgages will have the same disastrous fate as mortgage-backed securities had in the 2008 debacle,' Mr Icahn said in an interview. The Prizm Outlets had been valued as high as US$28.2 million less than a year ago, and US$125 million in 2012 when the loans were bundled into a commercial mortgage-backed security."

From Reuters on the UK. "Britain's retail sector will endure a 'tsunami of closures' if the government does not extend a moratorium on aggressive debt enforcement, industry lobby group the British Retail Consortium (BRC), said on Sunday. Many UK retailers deemed 'non essential' had to close their stores during multiple COVID-19 lockdowns over the last 15 months, accruing total rent debt of 2.9 billion pounds ($4.1 billion), the BRC said. The pandemic has hammered the sector and industry data shows one in seven shops already lie empty."

From CBC News in Canada. "As office tower vacancies in downtown Calgary exceed 30 per cent and the resulting hole in municipal tax revenues increases along with it, the city has formally outlined its vision for renewal and revitalization in the core. It's a complex gamble. As the city works to iron out the details of the funding, it's worth asking who owns Calgary's downtown and why public dollars should be used to incentivize a change in corporate business plans? To what end?"

"Trent Edwards, the chief operating officer of Brookfield Residential in Alberta and co-chair of Calgary Economic Development's Real Estate Sector Advisory Committee (RESAC), which advised the city, refers to it as a three-legged stool. 'So one is fill. Two is convert or adapt to other uses — whether that's a university, student housing, museum, you name it, assisted living, affordable living. And then the third piece is demolition,' he said."

"The day council approved the downtown plan and initial spending of $200 million to kickstart it, Scott Hutcheson, the executive chair of Aspen Properties, told councillors that downtown was a 'no fly zone' for that previously mentioned institutional capital. 'The pension funds, and the large real estate investors in that community that has typically owned the assets in the downtown, is neither interested in investing in our city core with new equity, nor is new debt available to our market.'"

The Globe and Mail in Canada. "Breather Products Inc., a Montreal startup that raised more than US$150-million to build a global flexible workspace operator, is selling most of its assets for US$3-million to Industrious National Management Co., a co-working company backed by real estate giant CBRE. Demand for short-term rentals, accounting for half of Breather’s business, vanished and occupancy dropped to 25 per cent by last fall. Breather tried to delay or renegotiate lease payments, but several landlords sued its U.S. subsidiary for non-payment in obligations. Other flexible workspace providers were hit just as hard. CEO Bryan Murphy told The Globe last fall that leasing its own spaces 'doesn’t make sense and, to be frank, I’m not sure it ever made sense.'"

"Breather briefly hired investment bank Moelis & Co. to pursue a financing or sale, but buyers balked at its lease commitments. Breather last fall abandoned hundreds of leases as its subsidiaries in the United States and Britain filed for insolvency to wind up operations and repay creditors in those markets. After furloughing most of its 120 employees early in the pandemic, it made those cuts permanent. Meanwhile, Mr. Murphy directed engineering and product teams to expand its platform to handle third-party listings. The hope was to rapidly sign up landlords to use the platform and revive the business."

"But by then, Breather’s owners were ready to sell and cut their losses. They realized it would be too complicated to bring in another private financier and restructure the equity ownership, and knew they were unlikely to ever make the kinds of returns from the investment they’d once envisaged. Breather fielded three bids, each at a fraction of its one-time peak value."

From Vietnam Plus. "The General Department of Taxation under the Ministry of Finance (MoF) is studying a proposal on increasing the threshold of taxable revenue for individual landlords renting out houses. For nearly half a year, Nguyen Thi Lan Huong, an owner of an apartment in Hanoi, has been unable to find tenants even though she has slashed rent by nearly 50 percent due to the COVID-19 pandemic. 'If the tax rate is high, the rental price will also be pushed up, making leasing more difficult. I hope there is a reasonable tax rate to harmonise the lessor and the lessee,' Huong told VTV."