What I’m Reading
Falling Down: Moody’s Analytics’ REIS estimates that the value of office buildings across the U.S. will fall by 17.2% in 2020. That is a loss in value not far from the estimated 19.2% drop for retail and Moody’s forecast for a 20.5% drop in lodging.
High Utilization: With many Americans working and learning from home, multifamily properties are facing increased wear-and-tear, greater volumes of waste and recycling and demands for services. R&M spending is rising accordingly.
Tipping Point: More than half of consumers with credit card debt said they will need more bailout money to make minimum payments over the next three months, but about the same number said employment will be more critical to avoiding default according to a survey from CrediCards.com.
On Ice: CBRE’s latest Global MarketFlash found that CRE investment volume fell by 57% worldwide in the 2nd quarter. Things were even worse closer to home:
Hit especially hard were the Americas region, which saw a 70% decline year-over-year to $43 billion, the lowest level since 2010, according to CBRE. Declines in the Americas tended to be steepest in cities hit hard with COVID-19 infections, such as Seattle (-84%), Orlando (-81%) and New York (-71%). Hotel assets were the hardest hit class, with a 90% drop in volume.
Mulligan: Coronavirus is hitting hourly paid and low/moderate income workers’ wages hard and their property owners are proactively seeking—and securing—forbearance relief to protect against unpaid rent. More than half of the properties seeking forbearance relief were from small balance loan borrowers, according to Trepp.
Chart of the Day
Just when you think that they can’t fall further….
Source: All Star Charts
Darwin Candidates: People are dying from drinking hand sanitizer in an effort to stop COVID. It goes without saying, but please don’t do this. (h/t David Landes)
Pumped Up: Hostess Brands is partnering with fitness supplement maker to create Twinkie-flavored protein powder.
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