In an interview with the TreppWire podcast, Lonnie Hendry, vice president of commercial real estate product management at Trepp, shared with the show’s hosts his ideas around securing accurate evaluations of commercial properties while operating under the cloud of COVID-19. Hendry, also a professor of Finance at Texas Tech, said one of the biggest challenges appraisers are facing is providing a view on a property that can actually be backed up with hard, timely data. “That opinion has to be based on facts,” Hendry said, adding that the data used to calculate property values during periods of market stability – occupancy, revenues, cap rates and expense ratios – all come into question during a period like the current one, where sales are non-existent and comps from the last two months are largely worthless. Click to read more at www.mpamag.com.

With some businesses beginning to return to operations – albeit at a lower capacity than before the pandemic – the dust is starting to settle for the retail market in North Texas. While there have been significant job losses and financial hardships, some concepts have proven their strength. The retail sector that emerges from this crisis may look different than it did before, but the key takeaway is that the sector will return. The speed at which restaurants, bars, movie theaters, fitness clubs and other retail establishments were shut down was extraordinary. The resulting financial losses have been staggering. Several restaurant industry leaders estimate that 30% of locally owned restaurants will not re-open after the COVID-19 crisis passes. Move ticket sales in Texas are typically $200 million each month, but that dropped to only $5,000 in March. The founder of a popular Dallas restaurant recently stated company income was down 99%. These are levels that make it very difficult for any concept to survive unless its equity-to-debt ratio is healthy. However, there are some concepts that have not only survived, but thrived in this environment. Grocery stores, pharmacies and quick-serve restaurants with drive-thru lanes were the clear winners in the COVID-19 disruption. As business restrictions are lifted and consumers begin stimulating the economy, other concepts will come back. Though, we may not see as many of them as there were before – at least initially. Click to read more at www.transwestern.com.

Retailers have been navigating the shifting economic landscape brought about by the COVID-19 outbreak. The data collected during this unprecedented change in the economy can illustrate the effects of shutdown orders and assist retailers in developing a business continuity strategy for implementation. Portfolio Analysis: New data points since the pandemic have caused many retailers to pivot their business. Careful analysis of the new information is necessary to optimize a retail portfolio and develop a sound recovery strategy. Combining store performance data, demographics, marketplace characteristics, and financials will help retailers understand what areas are recovering after the crisis and what areas may provide opportunity for new investments. CBRE | Forum Analytics uses proprietary data and deep experience to help clients identify the right size for their businesses moving forward through economic challenges.

Useful questions to ask when optimizing a retail portfolio include the following:
What data should we be collecting and managing?
How can we assess the effects of the crisis on our portfolio?
What is the impact of the shift to online and mobile ordering?
Click to read more at www.cbre.com.

In traditional real estate parlance, housing for middle-market customers is workforce or Class B housing. Many in the industry today prefer the term “attainable housing.” Whatever the name, in many markets, there isn’t enough of it, and prices can be a strain for those who need it. “Everyone is aware that there is an affordability crisis in housing, and it doesn’t just affect people who don’t make any money — it affects people who make a decent living,” says Jeffrey Engelstad, CCIM, a clinical professor at the Burns School of Real Estate and Construction Management at the University of Denver. “In some markets, you might need to make 130-140 percent of the [average median income] to afford a home.” The University of Denver, he adds, sees attainable housing as such a pressing issue that it’s hoping to offer a special semester-long course on the topic this fall. Supply is part of the issue. Rental housing construction has remained steady; 360,000 rental units were completed in 2018, according to the 2019 State of the Nation’s Housing report from the Harvard Joint Center for Housing Studies. But those were aimed at high-end renters, and, according to the study, the number of units renting for less than $800 a month has decreased every year since 2011 — a net decline of four million units. Economics play a part as well. Land and construction costs make building expensive, so housing is geared toward higher-end buyers or renters. Also, in many areas, wage growth hasn’t kept up with housing prices, leaving many renters and buyers scrambling for suitable housing. The Harvard report says that, in 2017, 31 percent of U.S. households spent more than 30 percent of their incomes for housing, including 15 percent who spent more than 50 percent of their income. Click to read more at www.ccim.com.

The deserted sidewalks and continuous rows of boarded-window establishments along both sides of the street create a stark, unprecedented and surreal scene as I drive along 6th Street in Downtown Austin. Though this is a temporary situation, it’s not one from which we will effortlessly rebound. I’m forced to reflect on how we’ll redefine development as usual to make us more adaptable and resilient in the face of economic disaster. It’s serious. The deepening economic impact of the coronavirus pandemic is felt worldwide. But it’s not just the economic effects of the pandemic that will force new ways of doing business in the real estate development and investment sector; social change is apparent and inevitable. It is pushing us to learn to cope with and embrace a new professional and personal landscape. Despite the chaos that’s taking hold in the broader market, investors and developers can apply brave but smart strategies to keep their projects going and assets producing. The Situation: If you watch or read the news with any frequency, you’ll likely conclude that the situation is less than favorable (a better word choice than “grim,” given our collective morale). Click to read more at www.forbes.com.