NY Extends Commercial Eviction Moratorium Until Next Year
As businesses, for the most part, continue to be closed in New York, Governor Andrew Cuomo has extended the eviction moratorium for commercial tenants until January 1, 2021. “The health and economic impacts of this pandemic have been devastating, and we are continuing to do everything we can to support people who are suffering,” Cuomo said in a statement. The ban on commercial evictions was first put in-place in March in response to many businesses unable to pay rent as a result of a state-wide lockdown due to Covid-19. For example, according to the NYC Hospitality Alliance, in August 2020, most restaurants and bars were not able to pay their rent.
Single-Tenant Net-Lease Properties See Record Cap Rate Compression
In Q3 2020, across the United States, cap rates for single-tenant net-lease office, retail and industrial properties fell to all-time lows. As interest rates are near-zero, investors continue to turn away from bonds and have increased their demand for these properties, in search of a relatively higher yield. That being said, while there are less bankruptcies occurring in this space, most of the transactions are for properties whose tenants are “essential” businesses. John Feeney, who is a senior vice president at The Boulder Group, explained that, “The one thing that really sticks out today in the net-lease space is just truly how bifurcated the market has become,” Feeney said. “It’s really a segment where there’s basically two sets of properties: essential and nonessential. Right now, the nonessential ones are just on hold. “There’s a disconnect between what buyers would be willing to pay for those types of properties with the risk they’d be taking and what sellers would be willing to let them go for.”