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With the coronavirus pandemic shuttering shops and causing millions of people to lose jobs, the crisis has also limited property owners’ ability to collect rents.
Nationally just 10% to 20% of mall retailers paid rent in April and many not until the end of the month, according to an estimate from CBRE. The paying share was higher for other assets like multi-family apartments (89% though not all in full) and offices, but the real estate services firm expects rent prices to decline for even the strongest sectors and for recovery to take at least 12 months for warehouses and at least 36 months for shops, restaurants and hotels.
The pain is universal. But as is often the case, the biggest companies may be best positioned to control their fates—and many of the world’s largest property owners have already announced steps designed to speed up the comeback.
In early May real estate powerhouse Brookfield Asset Management said it would spend $5 billion to invest in struggling retail businesses. Brookfield owns 152 million square feet of retail space and another roughly 300 million of offices, hotels and apartments.
“We believe this is a critical component to getting the economy moving again, and we would like to partner with companies and entrepreneurs that can draw on our capital and expertise to stabilize and grow their business,” said Ron Bloom, head of Brookfield’s private equity division and leader of this retail initiative, in a statement.
The Global 2000 is our annual ranking of the world's largest and most powerful public companies. The list is based on four equally-weighted metrics: revenue, profit, assets and market value. In all, 35 firms primarily in the business of owning real estate made the list this year—not including firms such as Blackstone (BX), the private equity giant that has a massive property portfolio but also invests in many other asset types.