Category: Editorial

Small Business Playbook: It Won’t be a Year Without a Santa Claus, as Malls Turn to Portable igloos and Virtual Visits to Save the Holiday Tradition

Posted on by Sarah

It’s an annual tradition for many families during the holidays: Packing the kids in the car and trekking them to the local mall to visit Santa for the chance to rattle off a holiday wish list and snap a photo — one that might end up on the Christmas card. But few kids will be sitting on Santa’s lap this holiday season, due to the precautionary measures that have been born out of the coronavirus pandemic. A holiday tradition that dates back to the 1800s is being rethought by retailers, mall owners and the men and women who spend their holiday season playing the part of Santa and Mrs. Claus. Bass Pro Shops will put Santa behind plexiglass screens, while Macy’s is launching an online Santa experience. Mall owners including Macerich and Taubman are getting creative with their holiday programming, to try to drive traffic to their shopping centers. One woman even launched her own business, selling inflatable snow globes to safely shield Santa and the children who visit him. This year, “Santa” Stephen Arnold, president and chief executive officer of the International Brotherhood of Real Bearded Santas, says the Santa experience is going to be “considerably different” for his organization’s some 2,000 members, who are assigned work at malls, schools, hospitals, churches and one-on-one visits to homes. Click to read more at www.cnbc.com.

“Sad Day” in LA: CBRE’s Corporate Exit Latest Blow to Dented Office Market

Posted on by Sarah

CBRE’s decision to shift its global HQ from Los Angeles to Dallas wasn’t mentioned on the company’s third-quarter earnings call Thursday. But the move, which the Dallas Morning News first reported earlier that morning, didn’t go unnoticed. “It’s yet another sad day in the city of Los Angeles,” said Ryan Leaderman, a real estate attorney at Holland & Knight’s L.A. office. CBRE, the world’s largest real estate services firm, later confirmed the change. “It was always cool to think of them as an L.A. company since most of the biggest real estate companies were based in New York,” said Jay Luchs, an L.A. commercial broker with Newmark, who spent 12 years at CBRE. But Luchs said he didn’t think headquarter locations are significant for large companies. “As long as you have top agents who understand the market it doesn’t really matter,” he said. The move comes as the pandemic continues to upend the office market, taking its toll on brokerages that have endured months of losses, with many forced to trim staff and cut budgets and salaries. While CBRE said it did not foresee any layoffs, relocations or changes at its Downtown 400 South Hope Street office — or any of its other California locations — the move comes at a difficult time for the struggling L.A. market. Click to read more at www.therealdeal.com.

Commercial and Multifamily Mortgage Delinquencies Decline in October

Posted on by Sarah

Delinquency rates for mortgages backed by commercial and multifamily properties declined in October, according to the Mortgage Bankers Association’s (MBA) latest monthly MBA CREF Loan Performance Survey. The survey was developed to better understand the ways the pandemic is – and is not – impacting commercial mortgage loan performance. “Commercial and multifamily mortgage performance improved in October, but there continues to be evidence of elevated stress, especially among loans backed by retail and lodging properties,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “The share of loans becoming newly delinquent fell again in October, but a larger share of non-current loans shifted to later-stage delinquencies. In essence, fewer loans are becoming delinquent, but those that are delinquent show fewer signs of curing.”

Key Findings from MBA’s CREF Loan Performance Survey for October 2020:  
Commercial and multifamily mortgage loan performance improved for the second straight month in October, driven by fewer new loans becoming delinquent.

  • 94.6% of outstanding loan balances were current, up from 94.3% in September.
  •  3.4% were 90+ days delinquent or in REO, down from 3.5% a month earlier.
  •  0.6% were 60-90 days delinquent (unchanged from September).
  •  0.6% were 30-60 days delinquent, down from 0.7%.
  •  0.7% were less than 30 days delinquent, down from 0.9%. 

Click to read more at www.mba.org.

A Return to OZ

Posted on by Sarah

The opportunity zone program continues to thrive despite skepticism and the pandemic.

By Sarah Hoban | Fall 2020

It’s only been three years since opportunity zones were created to encourage investment in low-income communities across the country. The program has been welcomed and used by many, though some look on with skepticism. Now, opportunity zones face new challenges related to the COVID-19 pandemic. The Qualified Opportunity Zones program had bipartisan backing as a part of the 2017 Tax Cuts and Jobs Act. State governors nominate low-income census tracts to be opportunity zones, which are then certified by the Treasury Department. Investment comes through opportunity funds, a vehicle developed for the program. Funds need to invest at least 90 percent of their capital in OZ assets, which are classified broadly and include not only commercial and affordable residential real estate, but also investment in startups and local entrepreneurship, historic renovation, industrial developments, and job creation initiatives. The program’s tax incentives are meant to encourage long-term investment. Investors get numerous benefits: a temporary tax deferral for capital gains invested in an opportunity fund; a step-up in basis (the basis of the original investment is increased by 10 percent if the investment in the fund is held by the taxpayer for at least five years and by 15 percent if held for at least seven years); and a permanent exclusion of any future capital gain income realized upon the sale or exchange of an investment in a fund if the investment is held for at least 10 years. Still, the program has generated controversy, with critics noting examples of questionable designation of tracts and billionaires using the tax break for projects such as luxury condos or other high-end uses that provide little benefit to struggling neighborhoods. Click to read more at www.ccim.com.

Commanding Capital: Flagship Capital Partners Funds Flow in Otherwise Dry Market

Posted on by Sarah

“Our phones have really been ringing off the hook,” said J.C. Clemens. The director of investments for Houston-based Flagship Capital Partners, Clemens said the past few months have been about as close to business as usual as they can be under the current circumstances. “We’re being very smart about the deals we’re choosing to lend on and we’re being thoughtful on our underwriting, but that’s how we’ve always operated as a capital source,” he said. Doing so has made Flagship dependable and durable, able to continue investing in projects even as the capital markets dried up due to the COVID-19 pandemic. “There are many larger capital providers with a lot of exposure to hotels, retail and oil and gas. Therefore, a lot of them have gone away,” said Clemens. He said the advantage of a private capital source such as Flagship is that the company keeps all its loans on its balance sheet. It doesn’t sell those loans off, as some other groups do. “Given all the uncertainty that’s in the market, people are looking for a lender who can close, somebody who can close on the terms they quoted in that first call. There’s no bait-and-switch,” Clemens said. “This is what we can do. We know we can do it. And we’re closing on those terms.” Flagship does it so well, its clients are spreading the word about the reliable capital provider that is actively looking to lend right now. Click to read more at www.rednews.com.