Author: Trey Jackson

Protection from Frivolous Lawsuits Key to Economic Recovery, Business Groups Urge Congress

Posted on by Trey Jackson

A multi-sector coalition including real estate, tourism, technology, manufacturing, health care, and energy sector groups – led by the U.S. Chamber of Commerce – called upon Congress in a May 27 letter to enact temporary liability protections for businesses struggling to reopen and operate safely during the COVID-19 pandemic. 

  • The letter explains that American businesses face risks of frivolous litigation that will impede the nation’s path to economic recovery.  “Absent a targeted safe harbor for [businesses] that work to follow applicable guidelines, the fear and uncertainty from boundless liability threatens to impede our country’s social and economic recovery,” the groups explain.
  • The Chamber-led coalition emphasized that “recourse for those harmed by truly bad actors who engage in egregious misconduct” must be preserved.  Reasonable and temporary liability protections should also be offered for:

(1) businesses, nonprofit organizations, and educational institutions that work to follow applicable public health guidelines against COVID-19 exposure claims;

(2) healthcare workers and facilities providing critical COVID-19-related care and services;

(3) manufacturers, donors, distributors, and users of vaccines, therapeutics, medical devices, as well as PPE and other supplies (such as hand sanitizer and cleaning supplies) that are critical to the COVID-19 response; and

(4) public companies targeted by unfair and opportunistic COVID-19-related securities lawsuit

  • Among the more than 200 signatories to the letter are The Real Estate Roundtable, American Hotel & Lodging Association, International Council of Shopping Centers, National Apartment Association, National Association of REALTORS®, and the National Multifamily Housing Council.
  • Additionally, Building Owners and Managers Association (BOMA) International wrote to congressional leaders on May 27, urging them to consider business protections developed in response to prior emergencies like 9/11 as a guide for responding to Covid-19-related liability issues. (BOMA letter on business liability)  
  • “A tailored, specific legal safe harbor program for those in the commercial real estate sector, who are following public health rules, directives, and guidelines, making plans, and implementing protective measures, will support ongoing recovery efforts,” BOMA’s letter explains.
  • Senate Majority Leader Mitch McConnell (R-KY) and House Minority Leader Kevin McCarthy (R-CA) said in a joint statement early this month that any future Covid-19 relief legislation must include liability protections for employers and businesses. (See Roundtable Weekly, May 1) 
  • Senator John Cornyn (R-TX) emphasized the GOP’s position on May 18, stating on the Senate floor that “Leader McConnell and I … are working on a proposal that would put common sense reforms in place and protect those acting in good faith from being sued into oblivion.”  (Cornyn statement).  Potential employer immunity and anticipated litigation related to Covid-19 were the focus of a May 12 Senate Judiciary Committee hearing.  (Roundtable Weekly, May 15).

Several states have implemented or are considering pandemic-related liability protections that could provide a direction for federal legislation.  Utah, for example, provides law suit immunity to businesses except in cases of reckless or intentional misconduct.  (Salt Lake Tribune, May 4)

Roundtable Members Continue to Drive the “Re-Entry Discussion”

Roundtable Immediate Past Chair Bill Rudin (Co-Chairman & CEO, Rudin Management Company, Inc.) today joined CNBC for a conversation about the path forward for re-populating office spaces in New York and cities nationwide.

Business liability and building re-entry are crucial issues affecting commercial real estate operations in the Covid-19 era.  They will be discussed during The Roundtable’s virtual Annual Meeting on June 11-12, which will include remote events for both business and policy advisory committee meetings.

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Pandemic Risk Insurance Proposals Include House Legislation Modeled on TRIA

Posted on by Trey Jackson

House Democrats and the insurance industry recently released separate proposals aimed at expanding the availability of pandemic-related business interruption insurance. (Bloomberg Law, May 28)

  • Legislation introduced on May 26 by Congresswoman Carolyn B. Maloney (D-NY), above, senior member of the House Financial Services Committee, would create the Pandemic Risk Reinsurance Program – a federal backstop that would provide capacity for pandemic risk insurance and maintain marketplace stability with the private sector, modeled after the Terrorism Risk Insurance Act (TRIA). 
  • Rep. Maloney’s bill – the Pandemic Risk Insurance Act of 2020 (PRIA), H.R. 7011 – has 20 Democratic cosponsors, including four who serve on the House Financial Services Committee.  (PRIA Section-by-Section Summary, Bill text and Rep. Maloney news release).
  • Rep. Maloney commented on the introduction of PRIA this week with stakeholders during a remote news conference.  “We want to solve a market failure by allowing companies to purchase business interruption insurance that covers pandemics so that they can stay in business and keep their workers employed.  To solve this marketplace failure, we need to create a federal backstop just like we did with TRIA,” said Rep. Maloney.  “That’s why I’ve introduced the Pandemic Risk Insurance Act.  This will help relieve some of the economic losses that business are suffering and will protect businesses and the economy from future pandemics.” (PRIA introduction video, May 26)
  • Under PRIA, Maloney stated. “… policyholders and insurers and the federal government will share the risks.  With this backstop, the insurance industry will have more certainty and will be able to safely underwrite this unique risk.”  (PRIA Section-by-Section Summary)
  • Rep. Maloney also noted the insurance industry’s May 21 proposal for a federal program to help businesses meet the financial challenges from future pandemics.  “It was encouraging to see last week the insurance industry’s agreement with so many members of Congress and policyholders from across the country that pandemic insurance is a viable, actuarially sound product – and that there is an immediate need to create a mechanism to provide relief for millions of struggling business owners.”
  • The insurance industry-backed Business Continuity Protection Program, proposed in advance of Rep. Maloney’s PRIA bill, would provide revenue replacement assistance for payroll, employee benefits and operating expenses following a presidential viral emergency declaration. (National Association of Mutual Insurance Companies news release, May 21)
  • The proposals from Rep. Maloney and the insurance industry are prospective, and do not address losses associated with the current coronavirus pandemic.  The Trump administration, lawmakers and state insurance regulators have warned against measures that would have insurers retroactively pay for current pandemic claims.  (Politico, May 21 and Insurance Journal, May 27)
  • The Real Estate Roundtable, along with its industry partners, continues to work constructively with policymakers and stakeholders to develop and enact an effective pandemic risk/business continuity program.

Pandemic risk insurance will be a policy focus during The Roundtable’s Remote Annual Meeting and policy advisory committee meetings on June 11-12.

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House Passes Bill to Relax Restrictions on Small Business PPP Loans

Posted on by Trey Jackson

The House of Representatives yesterday overwhelmingly passed legislation (417-1) intended to ease restrictions on Paycheck Protection Program (PPP) loans to help small businesses keep workers on payroll with benefits during the coronavirus outbreak.  (The Hill, May 28) 

  • H.R. 7010 would make other changes that offer greater flexibility for PPP-eligible businesses, including:
    • Extending the loan forgiveness period from eight weeks to 24 weeks after origination;
    • Extending the PPP re-payment period to five years, for small businesses that do not receive loan forgiveness;
    • Allowing PPP loan recipients to take full advantage of deferral of employment taxes through the end of 2020; and
    • Allowing small businesses to receive forgiveness for up to 40% of PPP loan amounts used for rent and other non-payroll expenses.
  • The Roundtable joined a broad coalition of organizations supporting the flexibility bill – as originally introduced – that would have given small businesses greater discretion to decide how to best apportion PPP proceeds to help pay rent obligations and other ordinary operating expenses.  (Roundtable Weekly, May 22)
  • The original bill would have completely eliminated the so-called “75-25 Rule.”  The rule’s name derives from a Small Business Administration (SBA) regulation that currently requires a qualifying business to use at least 75% of PPP proceeds for payroll and benefits, and no more than 25% for rent, mortgage interest, and utility payments.  (See RER’s “8-Point Plan to Reform the PPP”)
  •  H.R. 7010 as passed by the House yesterday defaulted instead to a “60-40 Rule.”  According to Politico, “Democrats scaled back [the] initial version of the bill to address complaints from labor leaders that it would have given businesses less incentive to hire back workers.”  (POLITICO, May 28)
  • With the Senate scheduled to come back in session on Monday, it could vote next week on its own bipartisan legislation to modify the PPP, the Paycheck Protection Program Extension Act (S. 3833).  Like H.R. 7010, the Senate version would increase the PPP forgiveness period – but only by 16 weeks.  The Senate bill would not address changes to the “75-25 Rule” at all.  (Journal of Accountancy, May 25)
  • A bipartisan group of Senators led by John Cornyn (R-TX), meanwhile, is on record to move the “75-25 Rule” to a “50-50 Rule” where up to half of PPP loan proceeds could be used by a business to pay rent and other non-payroll fixed expenses.  (Cornyn press release, May 6)
  • Treasury Secretary Steven Mnuchin has expressed the Administration’s opposition to changing the “75-25 Rule.”  “Let me just remind people it’s called the Paycheck Protection Program, it’s not called the overhead protection program,” Mnuchin said in a May 21 interview for The Hill. “It was designed that you got eight weeks of payroll plus 25 percent for overhead, which we thought was a reasonable amount.”

House Majority Leader Steny Hoyer (D-MD) claimed earlier this week that House and Senate negotiators are nearing agreement on PPP reforms. (Bloomberg, May 26).  A recent “tracker tool” released by the American Action Forum charts the allocation of PPP loans since the program’s inception in March.   

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Policymakers Debate Timing of Next COVID-19 Response; Fed Report Warns Pandemic May Force Significant CRE Asset Repricing

Posted on by Trey Jackson

The Fed - 2020 Financial Stablity Report

After the House of Representatives last Friday passed a $3 trillion coronavirus relief bill, Republican policymakers have signaled they may be open to another COVID-19 bill, but on a measured basis. (Forbes, May 21) 

  • Senate Republican Leader Mitch McConnell yesterday said, “I think there is a high likelihood we will do another rescue package.  But we need to be able to measure the impact of what we’ve already done, what we did right, what we did wrong … We’re not quite ready to intelligently lay down the next step, but it’s not too far off.”   (Fox News, May 21) 
  • Treasury Secretary Mnuchin said yesterday during a forum hosted by The Hill that “We’re going to carefully review the next few weeks.  I think there is a strong likelihood we will need another bill, but we just have $3 trillion we’re pumping into the economy.” (Advancing America’s Economy forum, May 21) 
  • Sen. Lindsey Graham (R-SC), chairman of the Senate Judiciary Committee and close ally of President Trump, told CNN, “I want to do infrastructure.  I told Trump, this is the time. We got it teed up. This is the time to go big. … It really is a once-in-a-lifetime opportunity to give a facelift to the country.” (CNN, May 20)

The debate in Washington on what will constitute the next large legislative response to the coronavirus pandemic continued as the Federal Reserve released its bi-annual Financial Stability Report, which analyzes vulnerabilities in the economy and identifies significant risks to the U.S. banking system.  (Bloomberg, May 15)

CRE a Focus of Fed’s Financial Stability Report

The Fed report offered a stark warning that asset prices remain vulnerable to significant price declines if the COVID-19 pandemic persists – especially in the commercial real estate sector. (GlobeSt, May 18) 

  • The report states, “The vulnerability stemming from elevated CRE valuation pressures, coupled with a dim outlook for the sector as indicated by recent declines in equity REIT prices, suggests that CRE may undergo a substantial repricing in response to disruptions generated by the COVID-19 pandemic.”  (The Fed’s 2020 Financial Stability Report)
  • The Fed report also notes that non-agency commercial mortgage-backed securities (CMBS) market, which had previously been funding about one-fifth of CRE mortgage debt, stopped new securitizations toward the end of March. “CRE loans that would normally be securitized have been accumulating on bank balance sheets. In addition, data from the April 2020 Senior Loan Officer Opinion Survey on Bank Lending Practices indicated that a major fraction of banks reported weaker demand for CRE loans and tighter lending standards, on net, in the first quarter of 2020,” the report adds.
  • Fed Chairman Jay Powell told a virtual Senate Banking Committee hearing on Tuesday that the Main Street Lending credit facility – a loan program designed to lend to small and medium businesses – should be ready to launch by the end of May.
  • In an April 22 letter sent to Treasury Secretary Steven Mnuchin and Fed Chairman Jay Powell, The Real Estate Roundtable and Nareit urged that the scope of the Federal Reserve’s “Main Street” Lending Programs should be expanded to forestall further disruption and economic dislocations in commercial real estate.
  • Chairman Powell also testified that the Term Asset-Backed Securities Loan Facility (TALF) is one of four Federal Reserve credit facilities that will become operational soon.  Powell testified, “We expect all of them to be stood up and ready to go by the end of this month,” Powell said of the remaining programs. “People are working literally around the clock and have been for weeks.”  (Markets Insider, May 18) 

Previous industry letters to the Fed on March 24 and April 14 addressed the need to broaden the range of TALF, requested that eligible collateral include both outstanding (legacy) CMBS, commercial mortgage loans and newly issued collateralized loan obligations.  On April 9, the Fed confirmed that the TALF would be expanded to include triple-A rated legacy non-agency CMBS and loans.

Roundtable Video Interview 

Economic and other policy issues facing the CRE industry in today’s pandemic environment were discussed recently in a video discussion with Roundtable Chairman Emeritus (2009-2012) Dan Neidich (Chief Executive Officer, Dune Real Estate Partners LP) and Real Estate Roundtable President Jeffrey DeBoer. The video, done as part of several remote Roundtable interviews about pandemic-related policy issues, was hosted by the alumni club of Stanford University – Stanford Professionals in Real Estate (SPIRE).   

  • Neidich and DeBoer address the importance of restoring the “Rent Obligation Chain” and the need for policy makers to help maintain business and residential rental income streams so local governments receive property tax revenues they need to provide essential community services.
  • Steady rent revenues drive building values that support American pensions and retirement savings. Rents to property owners also pay the compensation, health, and other benefits for the millions of workers – at all skills levels – that make U.S. building infrastructure safe, healthy, and functioning.
  • The SPIRE interview also covers a range of other policy matters at the forefront of discussions in our nation’s capital – such as business liability and proposals to help manage risks associated with reopening places of work, education and recreation.

Policymakers’ response to the contagion crisis, whether legislative or regulatory – and how the industry is participating in the process – will be a focus of The Roundtable’s June 11-12 Remote Annual Business and Committee Meetings.

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Senate, House Signal Openness to PPP Reforms as Business Coalitions Urge Policymakers to Strike “75/25 Rule,” Extend Loan Forgiveness Period

Posted on by Trey Jackson

SBA image for PPP

Congressional lawmakers are taking steps to improve key terms of the Paycheck Protection Program (PPP) to help small business borrowers deal with the economic impact of the global pandemic.  (Washington Post, May 20 and Wall Street Journal, May 21) 

  • Under the CARES Act, a portion of PPP loans can be forgiven for the eight week period after origination.  (See “CARES Act and Implications for Real Estate”)
  • Implementing rules and guidance from the U.S. Treasury and Small Business Administration further establish a “75/25 Rule,” whereby 75% of PPP loan proceeds and forgiven amounts must be for payroll.  No more than 25% can be devoted to non-payroll business expenses like rent, mortgage interest, and utility bills.
  • Business coalitions (including the The Real Estate Roundtable) sent letters yesterday urging policymakers to take immediate action to modify these requirements by extending the PPP loan forgiveness period and striking the “75/25 Rule.”
  1. A broad business coalition initiated by the U.S. Chamber of Commerce also recommends extension of the PPP’s June 30 safe harbor date for rehiring and restoration of pay.   
  2. A separate letter focuses support for specific legislation, the Paycheck Protection Flexibility Act (H.R. 6886).  This bipartisan bill is a stand-alone “spin-off” of PPP reform provisions passed by House Democrats last week in the HEROES Act.  (Roundtable Weekly, May 15, 2020)  H.R. 6886 would likewise strike the “75/25 Rule” and extend the PPP forgiveness period to 24 weeks after loan origination.
  • A sponsor of the PP Flexibility Act, Rep. Dean Phillips (D-MN), informed in a press release that House leadership has committed to bring up H.R. 6886 for its own vote possibly as early as next week.  House Speaker Nancy Pelosi (D-CA) reportedly called the 75/25 limitation on small businesses “debilitating.”  (Roll Call, May 20)
  • Over in the Senate, Marco Rubio (R-FL), Chairman of the Senate Small Business Committee and author of the PPP provisions in the CARES Act, predicted in a tweet yesterday that the Senate would pass reforms (S. 3833) to extend the time period beyond the current June 30 deadline by which qualifying small businesses can apply for and use PPP loans.
  • Senator John Cornyn (R-TX), meanwhile, has spearheaded a bipartisan effort to amend the “75/25 Rule” to a “50/50 Rule” – where up to 50% of PPP loan and forgiveness amounts could be used for rent and other ordinary business expenses.  (Cornyn letter, May 5) (Roundtable Weekly, May 8, 2020)
  • Since passage of the CARES Act on March 27, The Roundtable has recommended elimination of the “75/25 Rule” as an inappropriate “one-size-fits-all” restriction that unduly limits businesses in meeting their rent obligations and paying for other ordinary operating expenses.  (RER’s “8-Point Plan to Reform the PPP”) 
  • Treasury Secretary Steven Mnuchin yesterday endorsed congressional efforts regarding extension of the PPP loan forgiveness period.  “One of the things we’re working with Congress on, and there is bipartisan support, is lengthening the eight-week period.  [T]hat’s something we definitely want to fix,” he said. (Advancing America’s Economy forum, May 21)
  • At The Hill’s Advancing America’s Economy forum, Mnuchin also stated he did not support reforming the “75/25 Rule.” “We want most of this money to go to workers and that we believe the 75 percent was exactly consistent with the way the program was designed,” he said.
  • A recent “tracker tool” released by the American Action Forum charts the allocation of PPP loans since the program’s inception in the CARES Act.   

The Paycheck Protection Program will be discussed at The Roundtable’s Remote Annual Business and Committee Meetings from June 11-12. 

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CDC Summarizes “Re-Opening America” Initiatives; EPA Provides Building Water Quality Checklist; Roundtable Board Member Interviewed on Office Return

Posted on by Trey Jackson

CNBC Squawkbox interview with Owen Thomas

The Centers for Disease Control and Prevention (CDC) this week released a comprehensive summary of its initiatives and tools to enable fuller reopening of communities and businesses, as all 50 states are taking steps to return to a “new normal” after months of COVID-19 shutdowns and stay-at-home orders.  (CDC’s “Activities and Initiatives Supporting the Covid-19 Response” and NYTimes national map, May 21)

Meanwhile, the U.S. Environmental Protection Agency (EPA) recently issued an information resource and checklist to address water quality in buildings as they ramp-up operations.  EPA recommends that owners and managers take proactive steps to minimize water stagnation in plumbing systems during temporary shutdowns or reduced operations, prior to building re-population.  See:

Additionally, Roundtable Board Member Owen Thomas (CEO, Boston Properties) was interviewed yesterday on CNBC’s Squawkbox  (photo above) about the pandemic’s impact as employees return to office environments and how cities may compare to suburbs as major work hubs of the future. (CNBC interview, May 21) 

  • “We have a pandemic underway; there will be a gradual return to the office.  But I do think companies will be actively using their offices in the long-term,” Thomas said.
  • “I also hear from customers that remote work is not an acceptable replacement for the in-person interactions that happen in the office space. The ability to mentor younger employees. The spontaneous collaboration and creativity that occurs and also the culture that companies develop – it’s very difficult to do it when we’re all on Zoom and Webex.” (Thomas CNBC interview, May 21)
  • Roundtable members who have recently been interviewed about workplace return strategies and technologies include Immediate Past Chair Bill Rudin, Roundtable Member Scott Rechler and others. (Roundtable Weekly, May 15)

Two industry reports issued this month also address return-to-work guidelines and COVID-19 operational contingency plans:

  • A CBRE analysis of 203 companies’ operations across the globe – “ReEntering the World’s Workplaces” – shows many companies have implemented return-to-work guidelines stricter than local government requirements  (CBRE news release, May 15)  / (GlobeSt, May 18)
  • A Deloitte survey of 100 senior financial service institutions’ (FSI) executives with responsibility for crisis management and business continuity planning reveals that at least half of the respondents are developing COVID-19 operational contingency plans spanning at least the next three months. Part of the complexity around re-opening has to do with the scale and scope of FSI real estate. (Deloitte, May 15)

The Roundtable’s Building Re-Entry Working Group continues to meet weekly to address issues associated with the restarting of the economy. 

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Jim Didion, Real Estate Pioneer, Ex-CBRE CEO, National Realty Committee Chair Emeritus

Posted on by Trey Jackson

Jim Didion - In Memoriam

James Jerrett Didion (Jim) – a pioneer in commercial real estate who served as CEO of CB Richard Ellis and as former Chair of The National Realty Committee (predecessor of The Real Estate Roundtable) – passed away on April 2.

  • “Jim Didion was a driving force not only in the commercial real estate industry – his decades of invaluable public service included work on the National Realty Committee (NRC), the predecessor organization that became The Real Estate Roundtable in 1999,” said Jeffrey DeBoer, Roundtable President and CEO.  He added, “Jim joined NRC in 1972, served in a variety of policy advisory roles for years, including as Chairman from 1993 to 1996 and beyond as NRC  Chair Emeritus.  He will always be remembered as a selfless contributor to the common good of the industry, the country and his community.”
  • His real estate career began at Coldwell Banker Commercial, where he rose to become CEO and Chairman of CB Richard Ellis, leading the firm’s growth from $400 million in annual revenues in 1986 to more than $1 billion in 1999.  Mr. Didion has been widely recognized as a pioneer in building a global, fully integrated, professional services business and credited with leading CB to its position as the largest commercial real estate company in the world.
  • Mr. Didion consulted on real estate issues to the Chancellor of the University of California at Berkeley and served on the advisory board of the Fisher Center at the Haas Business School, as trustee of Community Hospital of the Monterey Peninsula and as National Real Estate Consultant to the U.S. Olympic Committee.

A video of his real estate advisory efforts, with his wife Gloria, on behalf of Montage Health illustrates their community participation and involvement.   (Full obituary, Monterey County Herald)

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Industry Coalition Urges Congress to Consider Opportunity Zone Rule Changes to Spur Investment in Hard-Hit Communities

Posted on by Trey Jackson

An 11-member industry coalition, including The Real Estate Roundtable, urged Members of Congress on May 14 to consider Opportunity Zones (OZ) rule changes that could spur investment, promote capital formation and bolster job growth in economically disadvantaged  communities impacted by the coronavirus pandemic.  (Coalition letter, May 14)

  • Opportunity Zones seek to stimulate jobs and growth where they are most needed by encouraging taxpayers to make long-term, patient investments in targeted, low-income communities.  On Thursday, Federal Reserve Chairman Powell reported that “among people who were working in February, almost 40 percent of those in households making less than $40,000 a year had lost a job in March.” (Chairman’s Prepared Remarks, May 13)
  • The coalition letter asks Congress to make three critical improvements to the Opportunity Zone incentives.  The changes would:
  • Allow opportunity funds to raise capital from all sources, not just gain rolled over from a recently disposed investment.
  • Spur productive real estate investment in low-income communities by providing that a 50 percent increase in the basis of a building constitutes a substantial improvement of the property.
  • Strengthen the economic incentives by codifying the tax rate on deferred gain and extending for two years the recognition date for deferred gain, and consequently, the deadlines that must be met in order to qualify for the increase in basis for gain rolled into an opportunity fund.
  • The coalition’s legislative suggestions come not long after Sen. Tim Scott (R-SC) and eight other Senate Republicans made several regulatory Opportunity Zone recommendations on May 4 in a letter to Treasury Secretary Mnuchin and IRS Commissioner Rettig.  (Roundtable Weekly, May 8)
  • The Senators encouraged 10 specific changes in their letter, which states, “Significant challenges arise from the inability to raise capital; decreased demand for space, products and services; a decline in the local economy; governmental delays; supply chain interruptions; and uncertainty regarding valuations and ability to secure loans and necessary funding apart from Opportunity Zone capital gain investments.”

The role of investment in Opportunity Zones may be addressed in eventual Covid-19 stimulus legislation in Congress.  The Roundtable’s Tax Policy Advisory Committee (TPAC) will continue to collect and share information regarding with policymakers regarding the real estate industry’s experience with the Opportunity Zone tax incentives and the impact on low-income communities of real estate-focused opportunity funds.

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Roundtable Members Address Workplace Return Strategies and Technology

Posted on by Trey Jackson

CNBC interview Bill Rudin ReOpening Offices

Roundtable members addressed the challenges and techniques in reopening the workplace in a variety of media outlets this week.

  • On May 13, Roundtable Chair Debra Cafaro (Chairman & CEO, Ventas) discussed the steps being taken by the City of Chicago towards reopening with Mayor Lori Lightfoot as part of The Economic Club of Chicago’s virtual program series.  The discussion also covers the city’s response to the COVID-19 pandemic and other aspects of Mayor Lightfoot’s first year in office. (Video: Mayor Lightfoot’s Prepared Remarks: 00:45 – 29:30, followed by Q&A with Debra Cafaro: 29:30 – 54:00)
  • Roundtable Immediate Past Chair Bill Rudin (Co-Chairman & CEO, Rudin Management Company, Inc.) today joined CNBC for a conversation about the path forward for reopening office space in New York City as employees work from home amid the coronavirus pandemic.  Rudin, above, discussed his building operating system called Nantum, which tracks real time data on metrics like indoor air quality, energy usage, temperature and carbon dioxide.  Rudin also commented on the need for state and local stimulus funding from Congress to support the basic functions of municipalities that will help economic recovery.  (CNBC video, May 15)
  • Roundtable member Scott Rechler (Chairman and CEO, RXR Realty) yesterday participated in a webinar hosted by Axios’ Mike Allen on reopening the economy and the future of workplace safety.  (Axios webinar, May 14).  Rechler discusses a “Leap to Labor Day” project for his company that will rotate employees back to offices on a staggered time basis to avoid congestion.  (Watch Axios webinar)
  • Roundtable Board Member and Sustainability Policy Advisory Committee Chair, Tony Malkin (Chairman and Chief Executive Officer, Empire State Realty Trust, Inc.), was quoted this week in a New York Times article on the challenges Manhattan owners and developers may face if the change in work environments evolves from buildings to homes.  He added that New York City’s diverse and educated work force will drive an economic rebound and desire for office space that caters to large industries, including a fast-growing technology sector. (New York Times, “Manhattan Faces a Reckoning if Working From Home Becomes the Norm,” May 12)
  • Real Estate Roundtable President and CEO, Jeffrey DeBoer, discussed what building owners and managers should consider to safely manage the reentry of tenants, workers and visitors in an interview last week with  Dr. Joseph Allen, Assistant Professor at Harvard’s T.H. Chan School of Public Health and Director of its Healthy Buildings Program. (Video, May 6)

The Roundtable’s Building Re-Entry Working Group continues to meet weekly to address issues associated with the restarting of the economy.

Operations and performance standards for healthy buildings will be a topic discussed during The Roundtable’s virtual Annual Meeting on June 11-12, which will include remote events for both business and policy advisory committee meetings.

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Senate Committees Consider Workplace Reentry, Business Liability and Financial Regulations

Posted on by Trey Jackson

Senate hearing social distancing

Senate committee hearings on May 12 addressed Covid-19 issues including reopening businesses and schools, legal liability for businesses, and the role of financial regulations in combatting the economic repercussions of the pandemic.

A “new normal” for congressional hearings was on display as social distancing and remote testimony were put into effect, with lawmakers and witnesses meeting through video conferences to maintain social distancing protocols.

Workplace Re-Entry

  • The health risks associated with reopening places of work, education and recreation were explored during the Senate Health, Education, Labor and Pensions Committee hearing, “COVID-19: Safely Getting Back to Work and Back to School.”
  • Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases, testified that returning too quickly could “turn the clock back, rather than going forward” on the road to economic recovery.  (Stat, May 12)
  • According to Politico, a dozen states will see their stay-at-home orders or business restrictions expire between today and Monday (May 15 to May 18) at the same time other states surpass the two-week point since reopening.  Updated reports on reopening status are available from CNN and the New York Times.

  • The U.S. Chamber of Commerce has developed an interactive state-by-state map of re-opening guidance policies.
  • The Centers for Disease Control and Prevention posted new one-page “decision tool” guidance documents on Thursday that advise businesses, restaurants and bars,  mass transit systems, and other concerns on how to safely reopen during the pandemic.

Business Liability

  • Potential employer immunity and anticipated litigation related to Covid-19 were the focus of a Senate Judiciary Committee hearing on Tuesday, “Examining Liability During the COVID-19 Pandemic.”
  • Republicans and Democrats expressed that enforceable federal guidelines from the Occupational Safety and Health Administration (OSHA) or Centers for Disease Control and Prevention (CDC), outlining proper health, safety, cleaning and other procedures, would likely be necessary to set standards for business conduct.  Senators also acknowledged that potential plaintiffs asserting liability claims would likely confront challenges in establishing that a business’s actions directly caused a Covid-related injury.   (Brownstein Hyatt Farber Schreck, May 14)
  • “One primary goal out of this hearing is to get the standards in place for business, for universities, for schools, whether they come from the CDC [or] OSHA,” Chairman Lindsey Graham (R-SC) said at the hearing.  Standards are needed so businesses “can understand what’s expected of them.  And if they do what’s expected, they don’t need to worry about getting sued. The big hole in the puzzle right now is the standard,” (The Hill, May 12)
  • The Judiciary hearing followed prior statements on employer liability from Republican congressional leaders that “these protections will be absolutely essential to future discussions surrounding recovery legislation” and that any coronavirus stimulus package will not pass the Senate without addressing business liability.  (Roundtable Weekly, May 1)

Financial Regulations

  • The Senate Banking Committee hearing on “Oversight of Financial Regulators” focused on the effectiveness of recent financial regulatory actions implemented to combat the economic impact of the pandemic.
  • Lawmakers shared the sentiment that more could be done by U.S. financial regulatory agencies to broaden the availability of various lending facilities put into effect to get more capital to businesses and communities in need.
  • During the hearing, Fed Vice Chairman for Supervision, Randy Quarles, responded to questions on the need for expanding the Fed’s Term Asset-Backed Securities Loan Facility (TALF) by saying there were no “specific changes to suggest” at this time, but that the Fed was “very sensitive to that.”
  • The Roundtable joined industry letters to the Fed on March 24 and April 14 on the need to broaden the range of the TALF to include both outstanding (legacy) CMBS, commercial mortgage loans and newly issued collateralized loan obligations.  On April 9, the Fed confirmed that the TALF would be expanded to include triple-A rated legacy non-agency CMBS and loans.
  • The Fed on May 12 also broadened the range of leveraged loans that can be used as collateral for the TALF.  The Fed will now accept new Triple-A rated collateralized loan obligations (CLOs) with leveraged loans, including refinanced loans and priced as far back as January 2019, as part of the TALF.  (Fed news release and Wall Street Journal, May 12)

Today, a business coalition including The Real Estate Roundtable wrote to financial regulators requesting they clarify their April 7 guidance encouraging financial institutions to work constructively with borrowers impacted by COVID-19.  Specifically, the coalition requests clarification that – in addition to traditional loan products – lending and financing arrangements, such as warehouse lines and repurchase agreements secured by multifamily and commercial real estate loans and commercial mortgage-related securities, are within the scope of the guidance in the Statement.  (Coalition letter, May 15)

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