Coworking and the Coronavirus: A Canary in the Coal Mine?

Before WeWork’s failed IPO, much of the criticism of the coworking and flexible office business model focused on the challenges that coworking operators would likely face in a recession when clients could easily end short-term memberships to conserve cash. By contrast, since WeWork and other coworking firms were often on the cutting edge of open-office design and were emulated by tenants in traditional leases, their dense office layouts were more likely to be identified as an asset than a liability. The COVID-19 crisis is now testing each of these assumptions, as coworking operators make difficult decisions to keep their members and employees safe while also keeping their businesses running.

Design Vulnerabilities

he open office design of many coworking and flexible office spaces can allow viruses to spread more easily than traditional office layouts, as Konrad Putzier noted in the Wall Street Journal. Without walls or a cubicle divider, droplets from a sneeze or cough can spread farther. Offices that use unassigned desks – a common practice in coworking – can also make it easier for a virus to spread as new desk occupants come into contact with infected surfaces. Putzier observed that some companies have opted for office layouts that encourage close contact between occupants to facilitate interaction. For example, WeWork has intentionally narrowed office corridors so that workers are more likely to physically run into each other. Click to read more at www.blog.naiop.org.

Capital Square 1031 Launches DST Offering of Texas Medical Portfolio

CORPUS CHRISTI, Texas, March 19, 2020 /PRNewswire/ — Capital Square 1031, a leading sponsor of Delaware statutory trust (DST) offerings, announced today the launch of CS1031 MOB TX VI, DST, a Regulation D private placement for investors seeking tax deferral under Section 1031 of the Internal Revenue Code and cash investors seeking cash flow and appreciation potential. The offering is comprised of two medical office buildings located in Corpus Christi, Texas. The buildings are leased to Covenant Physician Partners for a base term of 15 years on a triple net basis. “Medical real estate has historically demonstrated to be a recession-resistant investment,” said Louis Rogers founder and chief executive officer. “This is Capital Square’s sixth medical DST investment in Texas for Section 1031 exchange and other investors. Texas is a preferred location for investment due to the high level of growth driving demand for additional medical services and the absence of a state income tax, creating a friendly environment for out-of-state investors.” The portfolio includes: 5721 Esplanade Drive, a 9,228-square-foot, Class A multi-specialty ambulatory surgery center built in 2015 and situated on 1.08 acres of land, and 6002 S. Staples Street, a 24,264-square-foot Class A ophthalmic clinic built in 2018 and situated on 1.501 acres of land. Click to read more at www.finance.yahoo.com.

February 2020 Commercial Real Estate Market Trends and Outlook

This latest Commercial Real Estate Trends & Outlook Report discusses trends in the small commercial market (transactions that are typically less than $2.5 million) based on a survey of commercial REALTORS® about their 2019 Q4 transactions and the latest publicly available data. Respondents reported commercial dollar sales volume rose 4% in 2019 Q4 from one year ago, new leasing dollar volume rose 3%, and commercial development (in square feet) rose 5%. Among respondents, the median commercial sales price growth in 2019 Q4 from one year ago was 3%. Apartment, industrial warehouse and flex, and office class A properties had the lowest cap rates, with a median of 6.5%. Among respondents, the median cap rate for retail mall properties was also 6.5%. The retail trade industry appears to be adapting to the challenge coming from robust e-commerce sales. In November 2019, the retail trade industry gained 15,300 net new jobs from one year ago, in contrast to the job losses in past months. Click to read more at www.nar.realtor.

Avison Young Houston 2020 Expectations

Houston’s 2020 commercial real estate market outlook is positive with a few challenges in the office sector. The metro’s economy continues to recover from a lackluster energy market amid a general slowdown of global trading; nonetheless, job growth should remain positive through 2020.
Despite global trade stagnation, Port Houston, a major economic driver,
reports increasing volume and value, which should carry over into 2020 to remain among the top ports in foreign and domestic tonnage. Click to read more at www.rednews.com.

Dougherty Mortgage LLC closes $35 million HUD 221(d)(4) loan for Crossroads at Terrell

FOR IMMEDIATE RELEASE

MINNEAPOLIS, Minn.  – February 5, 2020 – The Fort Worth, Texas office of Dougherty Mortgage recently closed a $35 million HUD 221(d)(4) loan for Crossroads at Terrell located in Terrell, Texas.  Crossroads at Terrell will be a Class A multifamily apartment project consisting of 270 units in eight garden-style three-story buildings situated on a 10.50-acre site.  In addition to the eight residential buildings, there will be one clubhouse building consisting of approximately 4,000 square feet.  Project amenities will include a package center, resort-style pool, fire pit, outdoor cooking, business center, clubhouse with kitchen, game room, fitness center, bicycle storage, controlled access, dog park, and a pet spa. The project will be constructed to National Green Building Bronze Standards, allowing it to obtain HUD’s Green MIP rate of 0.25%.  The 40-year term, 40-year amortization loan was arranged for Terrell MF Ventures, LLC.

About Dougherty Mortgage

Dougherty Mortgage LLC is a full-service, nationwide mortgage banking firm, an approved FHA MAP and LEAN lender, as well as a Fannie Mae Delegated Underwriting and Servicing (DUS®) lender, offering a variety of loan products for the acquisition, refinance, construction or rehabilitation of various property types.  In addition, Dougherty Mortgage LLC provides loan servicing on their mortgages and is an approved Ginnie Mae seller/servicer, currently servicing in excess of $7.1 billion of loans.  Dougherty Mortgage LLC has also been awarded designation as a lender/partner with USDA under the Community Facilities Guaranteed Loan Program.  Based in Minneapolis, Dougherty Mortgage also has offices in Colorado, Georgia, Illinois, Mississippi, Tennessee and Texas.

For more information, please visit www.doughertymortgage.com