Tacos a Go Go built a reputation for its lamb barbacoa and frozen margaritas. In a way, the meal was a feat of alchemy. It brought together meat and tomatoes, tequila and lime, and produced the stuff of early morning taco runs, catered birthday buffets and late nights out with friends. But the act of transformation didn’t end there. The food was then turned into paychecks for employees, orders for vendors and rents for landlords, who, in turn, converted it into spending of their own. It was an everyday miracle, performed, in one version or another, by restaurants, retailers, salons and other businesses around the world until the need to slow the spread of the novel coronavirus clamped down on social interactions. The question is, how soon will that miracle return? Stay-at-home orders have been lifted in Texas, but fears of the pandemic’s resurgence, a decrease in disposable income and an increase in deferred debt remain for many. Workers have seen hours and paychecks reduced, vendors and their salespeople have lost sales and commissions and landlords have begun negotiating rents to help tenants survive, thinning their own bottom lines and potentially imperiling the commercial mortgage industry. Click to read more at www.houstonchronicle.com.

The MOB market did well during Q1

At least through the first quarter (Q1) of this year, the effects of the COVID-19 pandemic had not drastically impacted the performance of the medical office building (MOB) sector. In fact, quite the contrary, as MOB sales remained strong during Q1; construction remained on a solid path after a record-setting year for new project starts in 2019; occupancies held stead, especially in the country’s top 50 markets…HREI

Shutdown Tests MOBs as investment

As U.S. health-care systems limit medical services to emergency and urgent care situations in the face of COVID-19, medical office buildings are standing empty, and the threat of tenants missing lease payments mounts. Still, experts say, investors have every reason to keep MOBs high on their list of sector-favorites…CPE

Click to read more at www.coydavidson.com.

Hotel rooms, office buildings, and other commercial properties were lonely places last month as much of the nation operated under stay-at-home orders. Being a property owner might have made the lockdowns feel even lonelier. But as regions of the U.S. begin exploring ways to lift restrictive measures to contain the coronavirus and resume business, there is still plenty of uncertainty around what the toll will be on commercial properties, particularly since new protocols for returning to work, visiting the dentist and dining out are still being formed. Read U.S. commercial real estate braces for defaults as pandemic cuts cash flows. Barry Sternlicht, chief executive officer of Starwood Property Trust, Inc. STWD, -6.06%, this week described how hotels might begin resuming operations. “I think hotels, all hotels, will figure out how to operate with lower breakevens with fewer less-profitable parts,” he said during the real-estate company’s first-quarter earnings call. “There won’t be restaurants, there may not be room service, but they will try to fill heads and beds and staff to demand.” Click to read more at www.marketwatch.com.

The COVID-19 pandemic is disrupting the supply chain and forcing many consumers to change the way they shop. But while these disruptions are creating economic strain, they also present huge opportunities for industrial real estate.  “The industrial market is one of the obvious winners in the current situation,” said Bert Sanders, vice chairman at Newmark Knight Frank. It’s easy to see why. Social distancing has changed the nature of how people buy goods because, in the absence of conventional retail, consumers are making the most of their purchases online. The “just in time inventory “supply-chain strategy is suffering under the strain of this expansion of e-commerce. As a result, the need for warehousing of additional inventory has grown. Additionally, retail locations that are temporarily closed will need additional storage for their excess inventory, creating short-term demand for temporary space.  Click to read more at www.cpexecutive.com.