Bisnow's 20 Most Popular Stories Of 2021
Reading through Bisnow’s top 20 most-clicked stories of 2021 is a bit of a journey through the anxieties of commercial real estate. The struggles of malls, return-to-office conundrums, construction costs and what a Biden presidency might do to beloved CRE programs dominated this year’s list — and remain issues that look to loom large again in 2022.
But some say you must face your pain to overcome it, so grab a drink and take a trip through the stories that resonated most with readers this year.
20) Retail Owner Misses Debt Payment Days After Prepaying Executive Bonuses
Matthew Rothstein, Feb. 16
When Washington Prime Group decided in February to defer an interest rate payment and instead pay out millions in bonuses for senior executives, it set eyebrows raising and stocks tumbling. Four days after announcing it would pay $11.6M in bonuses to 17 top execs, the mall REIT took a 30-day grace period on a $23M interest payment it owed. It turned out to be the beginning of a saga for the firm: Four months later, WPG filed for Chapter 11 bankruptcy. It re-emerged in October and its CEO stepped down.
19) After A Year Of Working From Home, The Covid Office Shakeup Is Just Getting Started
Patrick Sisson, Feb. 28
Well, ain’t that headline just the truth. In February, it seemed like things might be calming down, and a mass return to the office could be nigh.
“Weeks of positive vaccine news, especially a general acceleration of distribution, despite many widespread and longstanding operational challenges, have only highlighted a general sense that a return to a new normal is, if not imminent, then at least forthcoming,” Patrick Sisson wrote at the time.
Welp. Maybe next year.
18) Repurposing In Action: Police Discover Cannabis Farm In Commercial Property Next To Bank Of England
Mike Phillips, Jan. 20
No surprise this one did well. London police arrested two people in January for taking advantage of an empty commercial building with offices above a bar on the ground floor to grow more than 1,000 cannabis plants with a street value of more than £1M.
“This is the first cannabis factory in the City, no doubt being set up in response to fewer people being out and about during the pandemic who might have noticed any unusual activity,” City of London Police Temporary Detective Inspector Andy Spooner said.
17) 'Walls Were Crumbling' At 12-Story Florida Condo Building Before Deadly Collapse
Deirdra Funcheon, June 24
The collapse of Champlain Towers South in Surfside, Florida, resulted in the death of nearly 100 people. Deirdra Funcheon’s story, filed hours after the condo building crumbled, began to unravel some of what led to the tragedy. It had deferred maintenance, a problem at many condo buildings nationwide. Bisnow stayed on the story throughout the year, including the razed site hitting the market in August.
16) Amazon Global Real Estate Chief: Company To Return To Office ‘Pretty Much As We Were Pre-Covid’
Jon Banister, March 23
As basically every business in the developed world grapples with what to do with its office strategy — when to reopen the office, who to bring back and who to leave working remotely — the decisions of the corporate giants have drawn lots of attention. Amazon, which occupies more than 44M SF of office space globally, said in March that 90% of its office workers were remote, but that it hoped to bring them back by the fall. Amazon Vice President of Global Real Estate and Facilities John Schoettler told Jon Banister he didn’t see the pandemic changing the company’s workplace strategy much long-term.
It later pushed that date back and said most office-using workers would be required to come in three days a week starting in January 2022. Then, in October, Amazon changed it up again, saying it will let individual teams decide what mix of remote and in-person work makes sense for them.
15) CRE Investors, Developers See Risk Everywhere In Biden Tax Proposal
Kerri Panchuk, April 28
When President Joe Biden introduced the $1.8 trillion American Families Plan in April, it was intended to expand spending for childcare, education, paid leave for caregivers and more. It offset its price tag by relying heavily on taxing commercial real estate transactions, and the industry was not pleased.
“Preposterous,” Dallas developer Dreien Opportunity Partners CEO Sam Ware told Bisnow at the time. “Not thought out [and] kills the jobmakers and risk-takers.”
That American Families Plan is no more, and its replacement, the Build Back Better bill, doesn’t touch 1031 exchanges. The version passed by the House of Representatives does have carried interest in its sights and the proposed changes could be a blow to CRE. Build Back Better is still being negotiated in the Senate and the suggested tax tweaks could be adjusted.
14) Simon’s Atlanta-Area Mall Gets No Bids At Foreclosure Auction, Winds Up With Lender
Jarred Schenke, Feb. 3
There was a wave of mall foreclosures this year, and from the biggest names in the business. Simon Property Group handed Town Center at Cobb, a 1.2M SF mall in Metro Atlanta, over to its lender, Deutsche Bank, in February.
13) Forget Floor Spacing, CRE Offices Will Lose Employees Post-Pandemic Without A Welcoming Culture
Kerri Panchuk, March 21
A lot of ink spilled about the return to office has focused on building a physical environment that will make workers want to leave home and face a commute. But Kerri Panchuk delved into why resistance to returning to the office, especially among female employees, often has more to do with workplace culture and tension among employees — why go back to the office if it means dealing with more microaggressions?
12) Amazon Ramping Up Industrial Acquisitions In Pivot Away From Leasing, Sources Say
Jon Banister and Jarred Schenke, Oct. 20
Amazon, historically a powerhouse in the industrial leasing realm, has shifted to more frequent acquisitions. The e-commerce giant has made no formal announcement of a change in strategy, but Jon Banister and Jarred Schenke hit the pavement to learn what is actually happening in the marketplace, and they found Amazon is increasingly bidding on properties and even backed out of some lease negotiations because it decided to buy land and develop its own facility instead. The shift is sure to roil the industrial space as other investors will find themselves competing with Amazon instead of benefiting from it.
11) Carried Interest, 1031 Exchanges On Chopping Block In Biden's American Families Plan
Dees Stribling, April 28
We’ve been down this road before — Biden’s American Families Plan was to be supported by tax changes to CRE, including adjustments to 1031 exchanges and carried interest. AFP is no more, and the replacement Build Back Better plan leaves 1031s alone but may still change carried interest. Stay tuned.
10) Sheldon Solow's Son Announces New Firm With Major Hires
Miriam Hall, April 12
Stefan Soloviev, the son of late billionaire real estate developer Sheldon Solow, announced the formation of his own real estate company in April. The new Soloviev Group includes realty and development divisions, as well as hospitality, transportation and railroad, agriculture and ranching divisions. The family property chain is going unbroken — Soloviev’s son, Hayden, joined as vice chairman of the company. Former Fairfax Group CEO Michael Hershman joined as CEO.
9) Lumber Prices Fall To 2018 Levels
Matthew Rothstein, Aug. 10
After a year of construction prices spiking alarmingly (more on that later), some easing in August was a huge relief. But the reprieve was short-lived, and lumber prices have been rising again fairly steadily since then.
8) Brookfield Hands 1.3M SF Georgia Mall Back To Lender
Jarred Schenke, Jan. 12
Another big mall default in Atlanta, this time Brookfield Property handing the 1.3M SF North Point Mall over to lender New York Life Insurance Co. in a deed-in-lieu-of-foreclosure transaction. Trademark Property Group has been brought on to redevelop the asset.
7) Microsoft Is Maneuvering To Build A Huge Atlanta Campus With Up To 15,000 Workers
Jarred Schenke, Jan. 11
Microsoft is expanding fast in Atlanta and may soon be one of the metro’s largest employers. It acquired 90 acres next to the Westside Park at Bellwood Quarry in January and intends to develop a campus for 15,000 workers over the course of a decade. It’s also planning to build affordable housing and other uses that it hopes will make it a good neighbor and help reshape the community for the better.
6) Outdoor Mall In Miami Trades For About 60% Of Its Former Price
Deirdra Funcheon, Jan. 3
Some of the malls Brookfield and Simon handed over to lenders this year were on the market first but failed to sell. In January, Federal Realty was able to trade away The Shops at Sunset Place, a 9.68-acre outdoor mall in South Miami, but at a deep loss — the $65.5M price tag was nearly 60% less than Federal paid when it bought the asset in 2015. The property was struggling with vacancy and was slated for redevelopment when the pandemic hit and killed that plan.
5) 'Perfect Storm' Of Construction Cost Spikes Wreaking Havoc On Contractors, Developers
Jarred Schenke, April 27
Rising construction costs make an appearance three times in this top 20 list, underscoring how big of a problem this was for developers and contractors this year. Jarred Schenke explored the huge spikes in April — at that point, materials prices were collectively up 13% year-over-year — but the pressure has not eased, and is in fact expected to be around for a long time, or at least another 12 months.
4) CBRE Laying Off Just Under 200 At Corporate HQ
Kerri Panchuk, Feb. 21
CBRE announced in February it would be eliminating about 200 jobs, mostly from its finance department, at its newly dubbed HQ in Dallas. The firm said the cuts were due to it “realigning a business support function.” But the story has a bit of whiplash to it — in November, the brokerage giant announced it is hiring 1,000 people in North Texas, nearly doubling its workforce in DFW, and is investing at least $42M into its HQ and a new operations center in the area. It received $6.75M in Texas Enterprise Fund grants for the two projects and $250K from the city of Dallas to add jobs and build a new headquarters tower in the Uptown neighborhood.
3) 'We Wish That New Owner The Best Of Luck': Simon Continues Handing Back Struggling Malls
Andrew Martinez, Feb. 9
In our final mall woes installment on this list, Andrew Martinez reported on the string of properties Simon Property Group handed back to lenders. Simon’s revenue has taken a significant hit from the pandemic, and it identified 13 smaller or underperforming malls as noncore and handed almost all of them back to lenders.
“In some cases, they’ll be restructured, mutually agreed to; and if not, and the special servicer would like to own the real estate, we’re more than happy to cooperate and do it in a professional manner,” CEO David Simon said in February. "[We] hope to make deals in some — if not, then they’ll no longer be part of our portfolio, and we wish that new owner the best of luck."
The valuations on Simon’s former malls were subsequently slashed by up to 88%.
2) Signs Of Lumber Bubble Bursting Offer Relief To Developers
Dees Stribling, June 15
This easing of lumber prices in June resulted in the August trough that made an appearance higher on this list. The peak was $1,711.20 per thousand board feet in early May. That dropped to $456 in August and is now at $1,044.10.
1) D.C. Claims Eminent Domain To Seize Infamous NoMa Wendy's Site
Jon Banister, Feb. 1
We end with a fun one — the sale of a wonky, infamous parcel in Washington, D.C., where a Wendy’s sits basically smack dab in the middle of a busy intersection. D.C. seized the site via eminent domain and is revamping the intersection, one of the most dangerous in the city. Goodbye, Wendy’s, hello, parks and protected bike lanes.
