April was dominated by coronavirus-related news and analysis as the industry and the country made efforts to grapple with this new reality and predict what comes next. At the beginning of the month, the country was getting ready for more job losses. Unemployment claims reached 16.8 million in just three weeks, the highest level on record. With the hospitality sector hit particularly hard compared to other industries—luxury hotel occupancy dropped under 10 percent during the first quarter, we looked at how the $2 trillion relief bill helps hotels. With guestrooms empty as a result of the pandemic, the American Hotel and Lodging Association and a partnership of Hilton and American Express have introduced initiatives providing temporary housing for workers on the front lines of the coronavirus, free of cost.
The retail industry has also felt the burden of COVID-19, with sales down a record 8.7 percent in March, according to Wells Fargo. Meanwhile, customers spent more at grocery stores than anywhere else for the first time ever. Measures meant to prevent the spread of the virus have translated into a temporary closure of multiple retail chains, with more than half of the total floorspace closed across the country. In an interview with CPE, Capstone Advisors Founder & President Alex Zikakis offered his insight into what retail landlords need to know during the pandemic.
Construction activity has also been heavily impacted by the coronavirus outbreak, with already high development costs expected to rise further in 2020, as municipalities are temporarily shutting down non-essential construction sites and preparing to order the construction of new medical facilities. Colliers International’s Greg Main-Baillie and Levine Kellogg Lehman Schneider + Grossman’s Jason Kellogg discussed how the construction industry is likely to be affected by a slowdown in deliveries.
Meanwhile, Equinix and Singapore’s sovereign wealth fund have agreed to form an initial joint venture worth more than $1 billion to develop and operate data centers in Japan. Overall, the data center sector is expected to weather the pandemic relatively well, compared to the other industries.
In non-coronavirus-related news, Paramount Group has signed a deal to sell a 10 percent interest in a 2.5 million-square-foot Manhattan tower. Big Lots announced plans to sell its owned real estate portfolio in a sale-leaseback deal with Oak Street Real Estate Capital. Blackstone Real Estate Partners Europe VI closed the largest-ever dedicated European real estate fund.
Here are CPE’s must-reads for last month: