Months after the Centers for Disease Control and Prevention (CDC) issued a nationwide eviction moratorium using its emergency pandemic powers under the Public Health Service Act, the efficacy of this unprecedented measure remains unclear. While the Order ostensibly protects tenants facing homelessness or housing insecurity due to the financial impacts of the COVID-19 pandemic through the end of 2020, legal challenges have been initiated in Ohio and Georgia, with additional lawsuits appearing likely. Further, even barring legal challenges, courts have not handled these cases in a uniform manner. With lawmakers unable to reach any stimulus or COVID-19 relief agreement before the election, the CDC Order appears likely to remain the only federal eviction moratorium through its expiration on December 31, 2020.
2020 has been an unprecedented year, and, while there are likely more twists and turns to come before December 31, it is essential to look at how the real estate markets have changed this year and which trends are likely to continue into 2021. The COVID-19 pandemic has impacted nearly every industry, including commercial real estate, and its impact will continue to influence the market and commercial real estate long after the virus has been eradicated.
In episode 18 of Industry Insights podcast, host Joel Simon and Elina Teplinsky discuss the financial community’s response to the energy transition including the focus on novel technologies such as clean hydrogen, advanced nuclear reactors and carbon capture and storage.
Joel Simon: With climate change and sustainability dominating the environmental landscape, there has been a lot of press in the last year or two about the energy transition. What exactly is the energy transition, and why is it so important? Continue reading
Joel Simon: Christian, you have a really great practice with an emphasis on two industries, one of which seems relatively insulated by the unusual circumstances we’re facing today and the other which has been rocked pretty hard. It’s the second one I’d like to focus on today. Can you start us off with a brief discussion of the status of the hotel business and what a recovery might look like for that sector?
The past few months saw, and continue to see, significant disruptions to the real estate market and the real estate finance market in particular. According to Trepp LLC, June saw the delinquency rate for commercial mortgage-backed security (CMBS) loans hit 10.32 percent, which is just shy of the peak delinquency rate for CMBS loans in 2012 (or a full four years following the 2007 – 2008 recession). That we could have nearly reached the 2012 peak so quickly—given the last time lag between a recession and peak delinquencies—has caused some investors to worry that much worse is yet to come. These numbers also cause certain investors to question whether CMBS disclosures may have been overly optimistic or failed to properly disclose risks. At the same time, regulated mortgage lenders, which must project losses, are assuming losses at approximately two percent on average.
A recent court decision in New York found that current market conditions in the real estate market justify delaying noticing mezzanine real estate foreclosures until October 15, 2020. In “Distressed Real Estate During COVID-19: Court Finds UCC Foreclosure “Commercially Unreasonable” Because of Coronavirus-Related Market Turmoil“, colleagues Caroline A. Harcourt, Patrick E. Fitzmaurice, Russell DaSilva and Jacob A. Axelrod discuss a recent New York Supreme Court Order.
As the COVID-19 pandemic continues to ravage the U.S. economy, restaurateurs and bar owners are feeling the brunt of business closures and adaptations necessary to combat the disease. Where cozy and intimate dining was once de rigueur for the restaurant industry, these businesses must now shift to outdoor dining with adequate space and airflow between parties. In response to these concerns, many cities across the country who once fought against the loss of any parking have turned to a post-automobile tactic: outdoor dining in thoroughfares and parking lots. While at first glance it might seem a simple enough prospect—throw some chairs and a table out front, and voilà—property owners and restaurateurs must remain cognizant of various liability and regulatory hurdles for operating outside.
District of Columbia enacts legislation to provide up to $100 million in grants to eligible businesses for up to 15% of revenue lost due to COVID-19 during the quarter ending June 2020. Landlords can receive grants to partially support their help to eligible tenant businesses. In “District of Columbia Enacts $100 Million Grant Program for Businesses Hurt by COVID-19,” colleagues David L. Miller and Zachary D. Bailey discuss the new legislation.
Pillsbury continues to track the impact on construction projects of COVID-19-related orders and guidance in all 50 states and the District of Columbia as well as guidance from CISA and OSHA. We are updating our chart weekly. Click here for the latest COVID-19 Construction Chart.
July 27 update – Now updated bi-weekly.
July 14 update – More updates.
July 7 update – This week’s chart includes updates to state orders. Although a few states have reversed course or paused their reopening plans in the face of a resurgence of the virus, so far none of those states’ orders have impacted construction.
June 29 update – More updates.
June 22 update – More updates on various reopening orders and guidance.
June 16 update – The chart is updated to include various reopening orders and guidance.
June 9 update – In addition to tracking orders and guidance in the 50 states and the District of Columbia, this week’s update also includes the OSHA’s new COVID-19-related guidance for Construction Work.
May 27 update – As we pivot toward less shelter in place orders and more reopening orders, more and more states are also issuing guidance for implementing safety measures on construction projects. Pillsbury modified its chart to include a column describing any state-issued guidance and some guidance from large cities. As described in our client alert Safety Measures for Construction Projects During the COVID-19 Pandemic, construction sites will be very different under the “new normal.”