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COVID-19 News Round-up for September 8

1. Top 10 Construction Companies. Credit: AZRE

Budget, Policy & Stimulus News 

Many Businesses Opting Out of Payroll Tax Deferral 

The decision to let employers defer payroll taxes is part of the Trump administration’s effort to boost the economy absent any action from a stalemated Congress on a relief bill. Taxes can be deferred from September 1st through the end of 2020, but must be fully repaid in 2021. Small business owners, experts and advocates say the nature of the program leaves businesses on the hook at a time of desperate need as they attempt to recover from the economic fallout of COVID-19. A payroll tax deferral lay at the bottom of preferences — ranked 15th out of 16 items — in a recent S-Corp Association survey of 60 trade groups on which stimulus efforts they felt would be most helpful to small businesses. (Source: Phoenix Business Journal) 

A Look at the Stalled HEROES Act and CRE 

The U.S. Senate has failed to resolve a dispute over how much money to spend to mitigate COVID-19’s impact on the country’s economy. House Speaker Nancy Pelosi and Treasury Secretary Stephen Mnuchin, who have been leading the negotiations, remained more than $1T apart on the final price tag on the package, which would include an extension on expanded unemployment benefits, more aid for small businesses and potentially aid for cities and states. NREI recently published a Q&A on the issue with Spencer Levy of CBRE. (Source: National Real Estate Investor) 

Economic News 

Landlord Concessions to Keep Office Tenants 

Leasing concessions are increasing in the office sector, but how far landlords are willing to go to secure tenants amid a pandemic depends on the office product. Office lease concessions in the form of free rent and tenant improvement allowances rose sharply in the second quarter of 2020 as U.S. office demand fell the most since 2009, according to a report from CBRE. Net effective rents for office space dropped by 6.6 percent from the second quarter of last year. (Source: National Real Estate Investor) 

How Office Leases Could Change 

The pandemic will no doubt bring unprecedented changes  many of which are still yet to be realized. Office landlords, however, can get a jumpstart by revisiting some common lease provisions that the pandemic has made outdated. While many people have focused on the force majeure clause in leases, other provisions like operating expenses and base year calculations should also be revisited. (Source: GlobeSt.com) 

Peoria Sale Tax Revenue Up 

Peoria’s sales tax revenue took a jump after the early months of the pandemic signaled a picture of doom and gloom. Revenues climbed 8 percent in May and 14 percent in June compared with this time last year, and June experienced the most city sales tax revenue of any month other than December during fiscal year 2020. (Source: Independent Newsmedia) 

REITS May Fare Better Than in Last Recession 

Although it might feel like the publicly-traded REIT sector as a whole is in the midst of a “sky is falling” crisis, real estate experts say the outlook for REITs is more sunny than cloudy. In fact, they maintain that REITs are better positioned financially today than they were during and after the Great Recession. (Source: National Real Estate Investor) 

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