Six months into the pandemic and it’s clear its effects are widespread and prolonged, especially for the retail and hospitality sectors, which have been disproportionately hit by the COVID-19 crisis. One thing we learned last month is that, even as total retail sales rebounded in June, the vast majority of locations expected to close in the U.S. due to the coronavirus consist of small retailers. Additionally, in spite of outstanding growth in online shopping, retail-to-logistics conversion rates are likely to be low and time frames to be long, according to a Prologis study. And while IKEA’s parent company plans to transform a 250,000-square-foot San Francisco retail property into its first mixed-use shopping center in the country, other brands continue to struggle. Simon Property Group and Brookfield Property Partners reached a deal to acquire JCPenney out of bankruptcy.
Although California imposed new restrictions to prevent the further spread of the coronavirus, most of the country did not follow suit. And while construction activity picked up pace in the third quarter, it’s still lagging the levels seen in previous years. A new Associated General Contractors of America survey found that a majority of general contractors have seen a project postponed or canceled because of the current health crisis. This can result in additional construction financing challenges for developers nationwide.
But there are some companies that have seen a positive impact from the pandemic. Among them, tech giants stand out. Amazon has leased two upcoming developments totaling 2 million square feet of office space across four towers in downtown Bellevue, Wash. Meanwhile, in Stone Mountain, Ga., Seefried Industrial Properties expanded its list of projects developed for Amazon with the completion of a new 640,000-square-foot fulfillment center. Facebook also doubled down on its expansion plans with the acquisition of a recently completed corporate campus in Bellevue, Wash., in addition to a $1 billion investment into its existing Georgia data center campus.
Here are CPE’s must-reads for last month: