As the real estate industry continues to conduct business during the current health pandemic, it is critical that real estate agents and brokers stay up to date on COVID-19-related state legislative and regulatory changes as well as state executive orders impacting real estate.
The National Association of REALTORS® (NAR) currently provides real estate professionals with bimonthly updates on important state issues such as eviction moratoriums, fair housing, foreclosure, landlord and tenant issues (including short-term rentals), licensure (including changes to pre-licensing, post-licensing and continuing education and examination procedures and requirements) and remote online notarization:
– More than 20 states have permanent laws allowing the use of remote online notarizations (RON). Other states have used executive orders to temporarily authorize the use of RON to help facilitate real estate transactions during the pandemic. It is important to know the expiration dates of these orders.
– Many states have altered their professional licensing criteria due to the ongoing health pandemic, including offering extensions for expired licenses and continuing education requirements.
– Many states have eviction or foreclosure moratoriums to help renters and homeowners who are suffering financially due to the health pandemic. It is important to stay abreast of when they are scheduled to expire.
– Real estate showings are currently authorized in all states; however, many states have put in place safety guidelines that real estate professionals must follow when showing a property or holding an open house.
– While several states previously had short-term rental bans in place, all statewide bans except in Hawaii have expired. In the place of bans, many states have enacted guidelines, and some county or municipal level bans are still in effect.
– The U.S. Department of Housing and Urban Development has released a statement on the Fair Housing Act and COVID-19, indicating that it will treat those who have the virus as a protected class. The Consumer Financial Protection Bureau has also offered guidance relating to tenant protections during the COVID-19 emergency. Because there are numerous levels of overlapping state, federal and local laws at play here, many state-based organizations have issued best practices for navigating COVID-19 as a landlord. Where available, we have compiled a list of guidance documents for each state.
Real estate agents and brokers can also access Hot Topic Alerts (short white papers) on important state and local issues such as inclusionary zoning, the use of accessory dwelling units and rural broadband deployment strategies.
This fall, NAR will be adding to its Hot Topic Alert library by issuing four new Hot Topic Alerts. The first will cover equity in real estate, exploring place and race-based policies that have historically driven disparate community policies from zoning to school districting.
The second will highlight policies that limit property rights in the rental community (including short-term rentals).
The third will cover state and local taxation activity in the wake of COVID-19 as state and local governments address budget deficits and REALTOR® associations work to ensure that the burden does not fall on the shoulders of America’s homeowners.
Lastly, the final Hot Topic Alert will cover infrastructure policy. From roadways to the internet superhighway, these systems not only impact property values, but are the means by which communities are connected.
All of these resources are available at realtorparty.realtor under the State and Local Resources tab. Not in front of a computer? Get NAR’s state and local policy resources sent directly to your mobile device by joining REALTOR® Party Mobile Alerts. Simply text SL POLICY to 30644 and a link will be sent to you to access these resources.
Source: “Stay Current on State and Local COVID-19-Related Laws and Executive Orders“
Archives for October 2020
Survey: Commercial Real Estate Recovery to Accelerate
While commercial real estate has been dealt a debilitating blow because of the pandemic, there are glimmers of hope that a significant recovery may soon take hold. The Urban Land Institute’s Real Estate Economic Forecast, which was released Tuesday during ULI’s virtual 2020 fall conference, shows that the industrial and retail sectors are particular bright spots that are expected to rebound strongly over the next couple of years. A panel of experts at the virtual meetings sounded off on where they see commercial real estate heading.
Industrial is the “star” of commercial real estate. Total annual returns for the sector are projected to be 4.5% in 2020, 6.2% in 2021, and 10% in 2022, according to the ULI survey, which includes insights from more than 30 economists and analysts at the nation’s leading real estate organizations. The flourishing segment of e-commerce storage is expected to continue to surge, said Suzanne Mulvee, senior vice president of research and strategies at GID, a commercial developer and investor. “There’s a ton of room for growth,” she said. “Speed of delivery continues to be important for consumers. Storage will be a real tailwind for the industrial sector.”
Demand for “experiential” retail to continue. The declines retail is experiencing—annual growth is expected to be down 10% this year—aren’t entirely due to the pandemic, Mulvee said. “Retail was overdeveloped before the pandemic,” she said. “There were huge amounts of oversupply, and then the rise in e-commerce contributed to the issue.” The key to the future of retail, Mulvee added, is the redevelopment of current spaces and a focus on “smarter” stores. “Better retail will heal faster. Sales will get concentrated into the more attractive options.”
Mary Ludgin, senior managing director at investment firm Heitman, said “experiential” retail will rebound because consumers still crave the in-person shopping experience that e-commerce can’t provide. “Once there’s a vaccine,” she said, “you’ll see experiential retail boom.” The ULI survey forecasts that total annual returns for retail will be -4.0% in 2021 and 2.0% in 2022.
Multifamily prices mellow in urban centers. Douglas Poutasse, managing director at real estate investment firm BentallGreenOak, said he is “modestly optimistic” about the multifamily sector, a sentiment other panelists echoed. A drop in housing prices in expensive areas such as San Francisco and New York will fuel a recovery there, Ludgin said. “Big cities will recover and come back with better prices,” she said. “People still want what those places have to offer.” The total annual return rate for multifamily properties is predicted to be 0% in 2020, 4% in 2021, and 6% in 2022.
Offices may see an extended recovery. The ULI survey forecasts that the total annual rate of return for offices will grow from -2.0% in 2020 to 0.3% in 2021 and 4.3% in 2022. Ludgin predicted a full office recovery could take up to five years and said that, in the intervening years, some office space likely will be converted into hotels and apartments. Younger workers may want to return to the office for advancement opportunities, Mulvee said, and larger knowledge- and technology-based companies will drive the trend back to the office. Poutasse concurred that the office environment will continue to foster technology and innovation for many workers and spur on office demand in the next few years. “I think you will see people coming back to offices,” Poutasse said. “You don’t have the same productivity or innovation at home because you don’t have the same interaction.”
Source: “Survey: Commercial Real Estate Recovery to Accelerate“
Say Goodbye to Your Local Coffee Shop in America’s Cafe Shakeup
The number of coffee shops in the U.S. is shrinking for the first time in nine years. The winter could bring another wave in closures.
(Bloomberg)—Starbucks Corp. and other coffee chains are expanding their grip on America’s coffee culture as independent cafes struggle to survive a pandemic-fueled industry shakeup.
The number of coffee shops in the U.S. is shrinking for the first time in nine years as sales plunge and Covid-19 forces the industry to rethink its business. That’s helping coffee-serving chains such as Starbucks, Dunkin’ Donuts and even McDonald’s Corp. gain ground at the expense of independent outlets fighting to keep their doors open.
“Closures have happened already and we believe the winter could bring another wave, especially for coffee shops depending on outdoor seating or even walk-up foot traffic,” Rabobank’s senior beverage analyst James Watson said in an interview from New York.
Fewer coffee shops means thousands of lost jobs, adding to an unemployment surge since the start of the pandemic. The shift may also curb demand from specialty coffee producers around the world, since cafe patrons tend to drink more premium beverages made from higher-grade beans.
The U.S. will have 25,307 outlets specializing in coffee or tea by the end of 2020, down 7.3% from a year earlier in the first decline since 2011, according to estimates by research firm Euromonitor International. Annual sales will plunge 12% to $24.7 billion.
“Coffee shops that succeed in this new climate will need try to recreate as many of their popular pre-Covid-19 attributes as before while being in line with the new realities of social distancing,” said Matthew Barry, a beverages consultant for Euromonitor. “This will include moving many aspects online, where personal engagement is still possible without physical proximity.”
Still, Barry sees no scenario in which U.S. food-service coffee consumption returns to its former growth trajectory — though it’ll remain a core part of the industry.
Overall volumes and sales in the coffee food-service industry are expected to fall for the five years ending 2024 while retail coffee sales at grocery stores gain.
Challenging Situations
Larger chains have the resources to handle short- and medium-term losses while also pivoting with conveniences such as online ordering and drive-thru service, Rabobank’s Watson said. Starbucks is planning on a net increase in U.S. stores this year and market gains could be just as significant in 2021, he said.
Starbucks didn’t immediately respond to an email and call seeking comment.
The Seattle-based coffee giant accelerated a rollout of its “pickup” concept — smaller-format stores without tables and chairs — and is enhancing service at its expanding drive-thru locations to cut waiting times. Starbucks also negotiated better leases to prepare for the prospects of future crises that could bring lockdowns, affecting customer traffic.
“We are rapidly innovating in order to capture new demand, new occasions that we didn’t have before that are tied to how customers are currently living their lives,” Chief Financial Officer Patrick J. Grismer said in a presentation last month. “We have moved quickly to open up new channels of distribution at our existing stores, primarily in the suburbs, because there is significant latent demand and there is unmet demand.”
While many independents have proven nimble by adapting their businesses to digital and to-go offerings, they’re still more at risk, Rabobank’s Watson said.
“The most challenging situations have often been based on location, with residential coffee shops far outperforming office/travel based locations,” he said. “Much of survival also comes down to rent negotiations with landlords and the potential for further government assistance –- factors that are hard to control and highly variable.”
Canada has also seen a shrinking number of coffee shops due to the pandemic and the contraction is expected for two more years, according to Allegra World Coffee Portal, a research and consultancy firm. Though 90% of Canadian cafes reopened by September, they face “a long road to recovery in a significantly altered market landscape,” Allegra said in a report.
Canadian coffee-shop sales are expected to plunge 22% to C$9.5 billion ($7.2 billion) this year from 2019 before rebounding to C$10.5 billion next year if the pandemic is largely resolved, according to Allegra estimates.
A return to pre-pandemic levels isn’t expected until 2023, when the industry is anticipated to resume growth. Tim Hortons, owned by Restaurant Brands International Inc., and Starbucks account for three-quarters of Canada’s coffee-shop branded segment.
Canada appears set to buck the U.S. trend favoring Starbucks and other big coffee purveyors.
“With the market currently dominated by branded chains, we expect to see local independents taking a greater share of suburban trade as Canadian consumers seek to diversify their coffee tastes,” Allegra said.
Source: “Say Goodbye to Your Local Coffee Shop in America’s Cafe Shakeup“
West Mesa targeted for large solar projects
ALBUQUERQUE, N.M. — Albuquerque’s far West Mesa could become a new Mecca for solar energy development.
The company pursuing the massive Santolina master-planned community, Western Albuquerque Land Holdings LLC, is now negotiating with solar developers to build up to 800 MW of new, utility-scale solar-generating facilities there. Three companies have already signed site-control agreements to temporarily reserve rights while they design project proposals, including two that want to build solar plants and one that wants to pursue backup battery storage, said Jeff Garrett, president of Garrett Development Corp., the asset manager for Western Albuquerque Land Holdings.
“Our team built a map and started chasing developers down, and then the herd started running this way,” Garrett told the Journal. “Nearly a dozen submitted letters of intent to work on projects.”
If the targeted 800 MW are built out, it would represent a $1 billion investment in at least four different power plants to supply renewable energy to utilities, possibly including Public Service Co. of New Mexico, and potentially to industrial users operating either on the north and south sides of I-40 or in other states. The plants would interconnect with the Pajarito substation PNM is now building on the southeast corner of the land earmarked for Santolina.
Once built, Pajarito would be connected to the new Western Spirit Transmission project, a high-voltage, 150-mile line that, once finished, PNM will acquire from energy company Pattern Development to transport renewable electricity from wind farms in central New Mexico to western markets.
Proximity to that power line and interconnection with the Pajarito substation would substantially reduce costs for solar developers, which, in turn, would lower prices for end users, making power purchase agreements more appealing, Garrett said.
The city, county and state could benefit from new revenue generated on land that today is generally used for grazing and taxed at the Greenbelt Grazing rate of just $3.66 per acre. Solar development on the West Mesa could also help the state meet renewable and carbon-free mandates under the Energy Transition Act if local utilities like PNM opt to purchase electricity, Garrett said.
Western Albuquerque Land Holdings currently owns about 28,000 acres on the West Mesa, about half of which is slated for the Santolina development south of I-40, and the other half north of the highway where companies like Shamrock Foods, Tempur-Pedic and FedEx already operate and where Amazon is now building a massive fulfillment center.
The solar projects would be built on 6,200 acres on the west side of those land areas, said Garrett Development Vice President Richard Starr. It would be built in two phases, with about $500 million invested in the first stage on 3,200 acres.
The land owners expect to sign 25-year land leases with the solar developers, who hope to bring the first projects online by 2023.
Source:”West Mesa targeted for large solar projects“
