Growing Share of Retailers Plan to Cut Physical Footprint This Year
According to a recent survey of retail CFOs conducted by global accounting firm BDO, more retailers plan to reduce their physical footprint in 2021. Approximately 40% of the CFOs surveyed are reevaluating their real estate footprint this year in anticipation of a lengthy period of reduced consumer spending resulting from high unemployment and a stalled COVID-19 vaccination strategy. With an average of 24 square feet of retail per person in the U.S. compared to 4 square feet per person in Western Europe, the US is “over-stored” regardless of the pandemic. Temporary rent relief provided short term reprieve for companies during the pandemic; however, the BDO report exclaims that a retail real estate reset is due and says that portfolio restructurings will provide bolder, more sustainable, long-term solutions. Nearly 93% of the companies surveyed plan to seek outside capital within the next 6 months, either with a sale, divestment, or external financing.
Economists Explain Why Multifamily Needs the $1.9T Rescue Plan
According to a paper published by the Urban Institute, if the economy had not received the $900 billion relief package in late 2020 it could have fallen into a double-dip recession with rising unemployment. The stimulus should help many of the delinquent renters pay their back-rent and utilities when February payments are due. According to the report, 6.8 million delinquent renters owe $34 billion, which could increase if they economy continues to struggle. With the economy still vulnerable, the authors note that there could be a surge in evictions if Biden’s $1.9 trillion American Rescue Plan does not pass. The package includes $30 billion for renter’s assistance and $5 billion to combat homelessness. Those in financial peril and delinquent on their rent and utilities are more likely to live in urban areas with a disproportionate effect on persons of color and young and low-income renters.