Average rents on apartments have been dropping even though they normally would be growing this time of year, a reflection of the impact the coronavirus is having on the multifamily asset class. Pressure is mounting on landlords as some tenants struggle to pay rent or consider participating in rent strikes.
News reports have highlighted some of the ways that the COVID-19 crisis is impacting economic activity, real estate and REITs. There has not been much hard data, though, outside of the record level of jobless claims last week. Nareit economist Calvin Schnure previews some of the economic reports on the agenda, as well as what he is looking for in these data releases.
The $17.3 billion merger deal between Caesars Entertainment and Eldorado Resorts is moving forward, although it has been delayed by the coronavirus pandemic, a source says. Multiple regulators still need to approve the deal, and sources say it could close in June.
Penn National Gaming's sale of the Tropicana Las Vegas to Gaming & Leisure Properties could be a sign of things to come for the sector, which is dealing with shuttered properties amid the coronavirus pandemic. The property is trading for $307.5 million, a $52.5 million discount from what Penn National paid five years ago.
WeWork is seeking to slash its rent as much as 30%, and it is talking to landlords about solutions including revenue-sharing agreements, sources say. Landlords have appeared reluctant to agree to those terms, the sources say.
Blackstone Group is backing out of plans to buy an office building in Oakland, Calif., and will lose a $20 million deposit for the 397,000-square foot property, sources say. The firm's decision to pull out of the $400 million purchase reportedly followed changes in the lending market.
Columbia Property Trust can handle "even more of a prolonged downturn" if it has to, says President and CEO Nelson Mills. The REIT has kept a conservative balance sheet posture, and its asset quality is a "great mitigant to risk," he says.
There were a record 6.6 million applications for unemployment benefits last week, far surpassing the 3.3 million applications from two weeks ago. "There's been a total decimation of consumption," says Constance Hunter of KPMG.
Police departments in cities like Chicago, New York and Austin have boosted patrols to protect retailers against looting during the coronavirus pandemic. Some retailers are taking extra steps by removing merchandise from stores, emptying window displays, boarding up storefronts and displaying empty opened cash registers.
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