News Type: Roundtable Weekly

Federal Pandemic Risk / Business Continuity Insurance Program Focus of House Hearing

Posted on by Trey Jackson

House lawmakers heard testimony about a possible federal pandemic risk / business continuity insurance program during a hearing yesterday entitled, Insuring against a Pandemic: Challenges and Solutions for Policyholders and Insurers. (Webcast of hearing and witness statements)

  • The Business Continuity Coalition (BCC), which includes The Real Estate Roundtable, submitted a hearing statement for the record to The House Financial Services Subcommittee on Housing, Community Development and Insurance. The subcommittee played a key role in last year’s seven-year extension of the Terrorism Risk Insurance Act (TRIA). (List of BCC members)
  • The BCC announced on Oct. 28 that it aims to develop a public/private business continuity insurance program with policymakers and other stakeholders. Such a program would enable employers, in the event of a government-ordered shutdown, to keep payrolls and supply chains intact; help limit job losses and furloughs; reduce stress on the financial system; and speed economic recovery when government-imposed limitations on operations are lifted. (BCC launch news release)
  • The BCC has emphasized that the COVID-19 crisis has shown the current lack of insurance availability for business continuity coverage for catastrophic pandemic events. This coverage gap raises concerns for policyholders and shows the need to enact an effective federal program.
  • The BCC hearing statement submitted this week notes, “… if not remedied, these insurance gaps will hinder any recovery, especially impacting business lending, new leasing activity, retail and hospitality, housing construction and development, as well as media production. Private insurance alone cannot and will not remedy the gaps – at least not in the short-term – but private insurers need to be part of the solution. What is urgently needed is a federally-backstopped availability mechanism similar to the highly successful one which Congress put in place for terrorism following 9/11– in short, a TRIA-style program for pandemic risk.”
  • A number of legislative proposals have been introduced to address the need for business continuity coverage – including the Pandemic Risk Insurance Act of 2020 (H.R. 6983).
  • Roundtable President and CEO Jeffrey DeBoer on Sept. 25 discussed prospects for developing and enacting a federal pandemic risk-business continuity insurance program with Rep. Steve Stivers (R-OH), the Ranking Member on the House Subcommittee. (Video of the discussion)
  • “We’ve seen business interruption insurance not being willing to cover any pandemics. I think you’re going to start to see lenders … requiring some type of pandemic coverage in their loan covenants in the coming years,” Stivers said.
  • He added, “I think we need to make sure that if this ever happens again and the government shuts down the economy, [Congress] holds people harmless and businesses harmless in the future.” (Video of the discussion)

DeBoer commented, “The pandemic crisis has exposed gaps in business continuity insurance coverage that can only be filled by a national program that will provide the American economy with the coverage it needs to minimize the economic impact of pandemic-related shutdowns and aid economic recovery.”

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Roundtable Holds Policy Town Hall; Post-election Congressional Session Faces Pandemic Relief Pressure, Government Funding Deadline

Posted on by Trey Jackson

Participants in RER Virtual Town Hall Nov9

The Real Estate Roundtable this week held a virtual “town hall” to discuss the election and its impact on national policy issues. Participating in the discussion were Sen. Michael Bennet (D-CO), Roundtable Chair Debra Cafaro (Chairman and CEO, Ventas, Inc.), Chair-Elect John Fish (Chairman and CEO, Suffolk), Roundtable President and CEO Jeffrey DeBoer and policy staff. The Nov. 9 discussion addressed a wide range of policy issues with nearly 200 Roundtable members in attendance. (Watch the discussion on The Roundtable’s YouTube Channel)

  • Cafaro said, “Our priorities are the COVID relief package that will come out of Congress, whether in the lame-duck session or later – a renters’ fund … (support) for state and local government relief … for the Paycheck Protection Program … funding for continued vaccine and testing and distribution … and liability protection of some type.”
  • Fish stated, “What is important for this COVID bill … if we don’t support the cities and towns and states, getting them back on their feet, the issues of lay-offs, restoring services and the impact on education … it is going to continue to spiral. If that happens, that is really detrimental.” He added those measures should be “coupled with PPP support because we need to put people back to work. They need payroll protection, the need jobs and that sense of security.” (Nov. 9 Roundtable Town Hall video)
  • Roundtable policy staff reviewed the lame-duck legislative outlook; tax and energy policy; and initiatives to create a Federal “business continuity” insurance program to mitigate future pandemic risk.
  • DeBoer also participated in a Nov. 12 NYU Shack Institute of Real Estate remote discussion on “Real Estate’s Priorities: Engaging with the New Administration” with Dr. Sam Chandan, PhD, Silverstein Chair of the Institute. (See Shack’s entire agenda)
  • “The narrow majorities in the House and Senate next Congress will place a premium on bipartisanship, and create hurdles for extreme legislation.  We expect a very active Congress. Large legislative agreements will be possible, but odds favor more targeted, constructive legislative initiatives. We look forward to offering our positive perspective on stabilizing the economy and moving forward,” DeBoer said. (Video with Sam Chandan)

Lame-Duck Agenda

DC Capitol Building

President-elect Joe Biden and Democratic leaders met this week about prospects for a bipartisan pandemic relief package during the post-election Congress, despite deadlocked negotiations over the cost and policy details of COVID-19 aid – and unlikely chances for compromise ahead of Georgia’s Senate elections on Jan. 5.

Both chambers of Congress return for their “lame-duck” session with a limited amount of working days before the new 117th Congress begins in January. The current Congress will need to pass a funding bill to keep the government open past Dec. 11 or face a shutdown – and negotiate a coronavirus stimulus package before several safety net programs expire in late December. It is possible the two measures could be combined in an “omnibus” bill. (BGov and Calculated Risk, Nov. 12)

  • Senate Majority Leader Mitch McConnell (R-KY) said this week that Congress should pass a limited stimulus bill before the end of the year, reiterating Senate Republicans’ opposition to a larger-scale package Democrats favor, signaling the current stalemate could extend into next year. (The Hill, Nov. 12 and Roundtable Weekly, Nov. 6)
  • Biden’s meeting with House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Charles Schumer (D-NY) yesterday addressed several outstanding issues facing Congress and the new administration.
  • According to a joint readout from Biden’s transition team and the congressional Democrats, “They discussed the urgent need for the Congress to come together in the lame duck session on a bipartisan basis to pass a bill that provides resources to fight the COVID-19 pandemic, relief for working families and small businesses, support for state and local governments trying to keep frontline workers on the payroll, expanded unemployment insurance, and affordable health care for millions of families.” (The Hill, Nov. 12)
  • Policymakers are reconvening amidst troubling signs affecting the economy, including a significant rise in COVID-19 cases, hospitalizations and deaths throughout the country as state and local governments consider reinstating lockdowns and school shutdowns. (Axios, Nov. 13)
  • Additionally, The Washington Post reported this week that regulators are increasingly concerned about US banks’ loan exposure to commercial real estate. The Nov. 11 article reports that if banks are forced to absorb losses on their $2 trillion in commercial real estate loans, the entire economy will suffer, according to Federal Reserve officials, economists and credit analysts.
  • “The Federal Deposit Insurance Corp. (FDIC) regards 356 banks as ‘concentrated’ in commercial real estate, based upon criteria such as the ratio of their CRE loans to their capital base and the pace of loan growth over the past three years,” according to the article.

Eric Rosengren, the president of the Federal Reserve Bank of Boston, said in a September speech, “I am especially worried about a second shoe dropping that will particularly affect small and medium-sized banks, which provide a large share of commercial real estate loans and small-business loans. A curtailment of credit resulting from such problems has caused serious head winds to recoveries in the past and may be a serious problem going forward.” (Washington Post, Nov. 11)

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Real Estate Coalition Urges Federal Banking Regulators to Extend Relief Period for COVID-19 Related Loan Modifications

Posted on by Trey Jackson

Logo compilation of Commercial Real Estate Coalition

A coalition of national real estate organizations, including The Real Estate Roundtable, this week urged federal banking agencies to provide additional guidance that would reaffirm financial institutions may use reasonable judgment when assessing credit risk during the unique circumstances of the pandemic – such as allowing borrowers and lenders additional time to see properties and loans through the pandemic.

  • The guidance would preserve financial institutions’ ability to continue work with borrowers and grant additional incremental accommodations that would total more than six months after December 31, without being classified as a troubled debt restructuring (TDR). (Coalition letter and MBA Newslink, Nov. 10)
  • Early in the crisis, the Federal Reserve joined the Office of the Comptroller of the Currency (OCC) and other banking regulators in a March 22 Interagency Statement that encouraged banks to avoid automatically categorizing COVID-19 related loan modifications up to 6 months as a TDR. (Roundtable Weekly, March 27)
  • The March joint statement also encouraged borrowers experiencing cash flow problems due to the pandemic to reach out to any FDIC-insured lenders about modifying their loans, without adverse consequences to the bank or the borrower that traditionally come with the TDR label.  
  • The statement included, “Short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not TDRs.  This includes short-term — for example, six months — modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant.”
  • On March 24, The Roundtable called on all owners and operators of business and residential rental real estate to voluntarily, proactively work in a positive and constructive manner with their COVID-19 impacted tenants respecting current rent obligations. (Roundtable news release, March 24)

Confluence of Events

OCC logo

  • A revised interagency statement released April 7 clarified the interaction between the March 22, 2020, interagency statement and section 4013 of the CARES Act, Temporary Relief from Troubled Debt Restructurings (section 4013). 
  • Many of the modifications granted under the revised Interagency Statement and section 4013 of the CARES Act are reaching the end of their six-month terms – at that same time that CARES Act protections are set to expire on December 31, 2020.
  • This confluence of these events creates significant, urgent challenges for any financial institution seeking to extend existing modifications of Covid-19 related loans past their six-month term.
  • The Nov. 10 coalition letter states, “…we urge the Agencies to provide guidance that a loan modification with a term greater than six months (e.g., up to 18 months combined) will not automatically result in a TDR under the Interagency Statements.”
  • “Because this issue is urgent, we request that the Agencies issue such a clarification and reaffirmation as soon as possible,” the letter concludes.
  • Brooks stated, “While banks remain sound, we see potential for troubled assets ahead in commercial and residential real estate, in small business and consumer lending, and in the travel and hospitality sectors in particular. Banks, particularly those with concentrations in those assets, must take a sober view of their risks and work with customers to the maximum extent possible consistent with safety and soundness.”

The Roundtable’s Real Estate Capital Policy Advisory Committee (RECPAC) continues its work with Washington policymakers to constructively support The Roundtable’s efforts to address the economic consequences of the COVID-19 crisis.

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Roundtable Advises that Uniform Federal Data and Voluntary Standards are Needed to Avoid State, City “Patchwork” of Carbon Pricing Protocols

Posted on by Trey Jackson

FERC logo

The growing number of state and local mandates to reduce GHG emissions and increase renewable energy supplies are driving the need for uniform and voluntary federal-level practices to measure and price carbon, The Roundtable advised in comments submitted on Tuesday.

  • This is because dozens of state and city laws are setting energy measurement, reduction, and emissions targets on buildings, and imposing renewable energy “portfolio standards” that require greater power supplies from solar, wind, and other carbon-free sources.
  • These state and local mandates have “effectively forced the issue – throughout the United States – that carbon emissions are an economic liability, and carbon reductions are an economic asset,” the letter explains.  Environmental demands from investors, tenants, employee talent, and other audiences also impel real estate owners to voluntarily purchase “clean” power and “offset” carbon emissions.
  • While FERC itself lacks authority from Congress to set a price on carbon, within the Commission’s sphere of regulating bulk electricity sales in “wholesale markets” it can play a “vital role to help facilitate a harmonious nationwide system of standards relating to carbon measurement and pricing,” the comment letter provides.

SPAC Involvement

Leadership - RER's SPAC

  • The Roundtable’s Sustainability Policy Advisory Committee (SPAC) – chaired by Tony Malkin (Chairman, President and CEO, Empire State Realty Trust), above left,  and vice-chaired by Dan Egan (Senior Vice President, Vornado Realty Trust), right, – directed the course of the comments, which also provides:
    • FERC should encourage jurisdictions to rely on federal data provided by power plants and managed by the Environmental Protection Agency (EPA) – known as “eGRID” – as the unifying information source to measure how combustion of various fuels used across the country contribute to GHG emissions;
    • Federal measurement standards can support “the types of long-term price signals that our energy future demands,” and minimize a confusing a “hodgepodge” in emerging state and regional markets that already treat carbon as a commodity (such as through the purchase of renewable energy certificates (RECs));
    • Any government revenue raised by state-level carbon pricing regimes should be returned to commercial, residential, and other consumers to help defray their energy costs. Sums from any such “carbon dividend” should also be channeled to create jobs by modernizing energy infrastructure and electrifying the grid.

“The SPAC has been hard at work for years on real estate related topics around energy production, distribution, consumption, and pricing that now are front and center,” Malkin said.  “Our members can be comfortable that they have excellent representation and access to information, that RER is on its front foot here, and that representation on SPAC by our members is critical to their ability to get the best information and have the opportunity to help inform The Roundtable’s actions.”

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Fed Announces Limited Adjustments to Main Street Lending Program Terms

Posted on by Trey Jackson

The Federal Reserve in Washington, DC

The Federal Reserve on Oct. 30 announced limited adjustments to the terms of its Main Street Lending Program (MSLP) facility in an attempt to support small and medium-sized businesses affected by the COVID-19 outbreak. (Fed news release) 

  • The MSLP has the capacity to issue up to $600 billion in loans, yet has only completed approximately 400 loans totaling $3.7 billion. (Washington Post, Oct, 30) 
  • With congressional negotiations over a pandemic relief package at an impasse, The Fed reduced the minimum loan size for three Main Street facilities from $250,000 to $100,000 and reduced fees to lenders who facilitate the loans. (Wall Street Journal and Roundtable Weekly, Oct. 30)
  • The Fed also issued a set of frequently asked questions to clarify that Paycheck Protection Program loans of up to $2 million may be excluded when determining the maximum MSLP loan size. (MSLP FAQs, Oct. 30)
  • Real Estate Roundtable and President Jeffrey DeBoer yesterday commented to CoStar, “The Main Street Lending Program won’t be energized by modest revisions. Banks need greater incentives to focus on the program, the borrower eligibility rules must be rethought, and the loan underwriting rules should better reflect the needs of troubled businesses. Without far deeper reforms to the program, its full potential assistance will continue to be untapped,” DeBoer stated. (CoStar, Nov. 5, “Modest Changes May Not Be Enough to Make Relief Effective, Head of Real Estate Industry Group Says”)
  • DeBoer testified about the MSLP on Sept. 9 before the Senate Banking, Housing and Urban Affairs Committee on how to improve access to Federal Reserve credit facilities for businesses such as manufacturing, retail, restaurants, real estate owners, and other asset-based borrowers. (Roundtable Weekly, Sept. 11)
  • DeBoer told the Committee, “The recommendations that I have made on the Main Street Lending Program … really require no additional funds from the federal government. They are administrative. They could be done tomorrow by the Treasury and the Fed if they wanted to.” (Roundtable Oral Comments and written statement / video of DeBoer’s Testimony and Q&A with Senators)
  • Fed Chairman Jay Powell testified before Congress on Sept. 23 that the central bank has “done basically all of the things that we can think of.” Powell added, “There is nothing major that we see now that would be consistent with opening it (MSLP) up further.” (American Banker, Sept. 23)
  • Last month, The Fed released its Summary of Commentary on Current Economic Conditions, showing that “commercial real estate conditions continued to deteriorate in many Districts.” (The Fed’s Beige Book, Oct. 22)
  • The Fed lending programs backed by pandemic relief legislation are set to expire at the end of December.  Fed Chairman Powell and Treasury Secretary Steven Mnuchin must decide which programs to extend into 2021. (New York Times, Nov. 5) 

The Roundtable continues to urge regulators and lawmakers to develop specific MSLP changes to bolster small business tenants and other industries struggling with the pandemic’s ongoing economic impact. 

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Election Results Usher In Uncertain Prospects for Pandemic Relief and Funding Omnibus

Posted on by Trey Jackson

Ballot counting in the presidential election continued for the fourth day this week as former Vice President Joe Biden made gains against President Trump in key battleground states. Control of the Senate balances on the results of undecided races in Alaska and North Carolina – and on both Senate seats in Georgia that will face run-off elections on Jan. 5.

  • The Real Estate Roundtable will hold a membership-only town hall discussion on Monday, Nov. 9 from 5-6pm EST to discuss the policy implications of the elections with Roundtable staff, elected leaders and special guests.
  • Electoral uncertainty will influence Congress on its return to Washington next week for a “lame-duck session,” which will include consideration of a pandemic relief package and must-pass legislation to keep the government open past Dec. 11. (BGov, Nov. 6 and Roundtable Weekly, Oct. 30)
  • House Speaker Nancy Pelosi (D-CA) this morning called for Republicans to re-enter negotiations for COVID-19 relief as Senate Majority Leader Mitch McConnell on Wednesday said Congress should pass a new economic-relief package this year. (Politico and Wall Street Journal, Nov. 6)
  • McConnell said, “We need another rescue package. Hopefully the partisan passions that prevented us from doing another rescue package will subside with the election. We need to do it, and I think we need to do it before the end of the year.”
  • Senate Whip John Thune (R-SD), who is number 2 in the chamber’s leadership, said on Oct. 25 that if Democrats prevail in the presidential election, a smaller stimulus bill could be pursued in the lame-duck session, followed by another package in the new year. (BGov, Oct 27)
  • A major impediment in the negotiations over pandemic aid is cost, as the Trump administration has offered a ceiling of $1.8 trillion, House Democrats passed a $2.2 trillion bill, and Senate Republicans favored a $500 billion measure. (Wall Street Journal, Oct.9 / AP, Oct. 1 / USA Today, Oct 21)
  • The tension surrounding the presidential election results adds to the uncertainty about whether President Trump will negotiate and seek to influence a Senate GOP bill addressing COVID-19 relief during the lame-duck session.
  • White House economic adviser Larry Kudlow today said the administration remains open to negotiations.  “Sen. McConnell and for that matter President Trump, and [Treasury Secretary Steven Mnuchin] and I and the others … we would like to negotiate a package. It would still be a targeted package to specific areas. We’re not interested in two or three trillion dollars,” Kudlow said. (CQ, Nov. 6)

Lawmakers during the lame-duck may choose to merge some COVID-19 aid measures into a sweeping multi-trillion-dollar omnibus bill to avoid a partial government shutdown on Dec. 11, when funding is set to expire.  Additionally, many temporary financial safety net programs are set to expire on Dec. 31. (Marketwatch, Oct. 21 and RollCall , Oct. 28)

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Broad Business Coalition to Seek National Program Aimed at Limiting Future Impact of Major Economic Interruptions, Including Pandemics

Posted on by Trey Jackson

The economic damage from future business interruption events – such as pandemics and other national emergencies – needs to be limited and managed with a new national business continuity insurance program, according to a broad business coalition launched this week that represents more than two dozen industries and over 50 million workers.

  • The Business Continuity Coalition (BCC), which includes The Real Estate Roundtable, announced on Oct. 28 that it aims to develop a public/private business continuity insurance program with policymakers and other stakeholders. Such a program would enable employers, in the event of a government-ordered shutdown, to keep payrolls and supply chains intact; help limit job losses and furloughs; reduce stress on the financial system; and speed economic recovery when government-imposed limitations on operations are lifted. (BCC launch news release)
  • The BCC membership is comprised of organizations from the hospitality, restaurant, entertainment, gaming, communications, and broadcasting industries, as well as the apartment, healthcare, industrial, office, and retail real estate sectors. (See full list of BCC members)
  • Roundtable President and CEO Jeffrey DeBoer commented, “The need for a future national program that supports readily available business continuity insurance is clearly needed as the American business community, including commercial real estate, continues to adapt to the economic damage brought on by the pandemic.”
  • He added, “Businesses are making the health of workers and customers their top priority as they face interruptions, closures and attempts at reopening. The Business Continuity Coalition will work with lawmakers in applying lessons learned from present challenges toward future solutions so that the nation can collectively bridge any future economic interruption gap with the support of a congressionally-approved national program.”

Nov. 19 Hearing on Pandemic Insurance

Rep. Steve Stivers remote interview

DeBoer on Sept. 25 discussed prospects for developing and enacting a federal pandemic risk-business continuity insurance program with Rep. Steve Stivers (R-OH), above, in a remote interview.  (Video of the discussion)

  • “We’ve seen business interruption insurance not being willing to cover any pandemics. I think you’re going to start to see lenders … requiring some type of pandemic coverage in their loan covenants in the coming years” Stivers said.
  • He added, “I think we need to make sure that if this ever happens again and the government shuts down the economy, [Congress] holds people harmless and businesses harmless in the future.” (Video of the discussion)
  • Carolyn B. Maloney (D-NY), who also serves on the subcommittee, said, “Congress needs to be proactive in helping businesses protect themselves from economic losses as a result of pandemics, which, as we’ve seen, can be devastating to businesses of all sizes.” (BCC)
  • The subcommittee played a key role in last year’s seven-year extension of the Terrorism Risk Insurance Act (TRIA).
  • According to the BCC, there are a number of successful models that can provide guidance in structuring a business continuity insurance program. Among them are TRIA, originally enacted following the 9/11 attacks and the War Damage Corporation developed during World War II. (BCC news release, Oct. 28)

BCC Steering committee members include the American Resort Development Association, Building Owners and Managers Association, Fox Corporation, Independent Film & Television Alliance, International Council of Shopping Centers, Motion Picture Association, NAIOP – Commercial Real Estate Development Association, Nareit, National Association of Realtors, National Restaurant Association, Sony Pictures Entertainment, The Real Estate Roundtable, and ViacomCBS.

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Post-Election Pandemic Relief Could Be Part of Government Funding Bill in December

Posted on by Trey Jackson

Capitol Dome Dusk

Current negotiations on a pandemic relief bill remain at a standstill until the results of next week’s elections, which will impact the contours of a potential deal in a “lame-duck” Congress that must also pass funding legislation by Dec. 11 to avoid a partial government shutdown.

  • The key players in the relief negotiations– House Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin – both expressed frustration this week about the deadlock over policy differences for a COVID-19 stimulus deal.
  • Pelosi detailed seven policy issues where significant disagreements remain in an Oct. 29 letter to Mnuchin – including funding for state and local governments; OSHA and worker liability protections; and unemployment insurance and tax credits for working families. Mnuchin responded with his own letter yesterday, saying the state of negotiations described by Pelosi were inaccurate. (BGov, Oct. 30)
  • Pelosi also told the Wall Street Journal this week, “What [Mr. Mnuchin] and I have agreed upon—on how we would go forward—is not necessarily what the Republican Senate will vote on. That is up to the president to convince them that the agreement we have with him is one that will be honored by them.” (WSJ, Oct 28)

Post-Election Lame-Duck Session

IRS Covid19 Tax Relief image

President Trump yesterday said, “Once we get past the election, we’re going to get it (pandemic stimulus). It may be bipartisan, it may not have to be… Right after the election, we’ll get it one way or the other.” (Jon Taffer podcast, Oct. 29)

  • Trump also said his administration expects negotiations to continue, saying, “After the election we’ll get the best stimulus package you’ve ever seen …” (The Hill, Oct. 27 and CQ, Oct. 29)
  • The cost of a potential package is another major impediment in the negotiations, with the Trump administration considering a ceiling of $1.9 trillion and the Democrats holding at $2.4 trillion.  ( Roundtable Weekly, Oct. 23)
  • Senate Whip John Thune (R-SD), who is number 2 in the chamber’s leadership, said on Oct. 25 that if Democrats win on Nov. 3, a smaller stimulus bill could be pursued in the lame-duck session, followed by another package in the new year. (BGov, Oct 27)
  • House Ways and Means Ranking Member Kevin Brady (R-TX) added this week  he was open to finalizing a “smart Covid package” during the upcoming lame-duck session, commenting he aims to provide certainty for more than 30 tax extenders scheduled to expire at the end of 2020. “We’ve already reached out and are having discussions with (House Ways and Means) Chairman Neal and Democratic leaders on how we might resolve some of those temporary health and tax provisions,” Brady said. (BGov, Oct. 30)

With government funding set to expire on Dec. 11 and many temporary financial safety net programs expiring on Dec. 31, lawmakers could merge some COVID-19 aid measures into a sweeping multi-trillion-dollar omnibus bill to avoid a partial shutdown.  (Marketwatch, Oct 21, Washington Post, Oct. 23 and RollCall, Oct. 28)

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Potential Election-Related Civil Unrest Monitored and Shared by Real Estate Information Sharing and Analysis Center (RE-ISAC)

Posted on by Trey Jackson

REISAC logo x475

The escalating threat of civil unrest related to the election – looting, homegrown violent extremists and organized attacks on properties – continues to be addressed by law enforcement and the commercial real estate industry.  Through the Real Estate Information Sharing and Analysis Center (RE-ISAC), The Real Estate Roundtable works with government officials and private sector partners to detect, protect and respond to a multiplicity of such key threats.

  • The RE-ISAC serves as the primary conduit of terrorism, cyber and natural hazard warning and response information between the government and the commercial facilities sector.
  • Through its information-sharing network, the RE-ISAC engages in operational efforts to coordinate activities supporting the detection, prevention, and mitigation of a full range of physical, data, and cyber threats to the nation’s critical infrastructure.
  • The RE-ISAC is now maintaining a central section online of election-related threats and updates, both physical and cyber, called U.S. & Election 2020. While not a direct threat to the Commercial Facilities Sector, cyberattacks, misinformation, physical threats and intimidation, as well as the complexities of an election during the pandemic are concerns that must be monitored and shared with CRE stakeholders.

Reference:

  • To subscribe to the RE-ISAC Daily Report and alerts, industry participants should contact RE-ISAC Executive Director Chip Rodgers.

The Roundtable’s Homeland Security Task Force

FBI Headquarters building in Washington, DC

  • Additionally, The Roundtable’s Homeland Security Task Force (HSTF) held a remote meeting on Oct. 21 that included presentations on election-related security issues with Michael Burgwald, Assistant Section Chief, Domestic Terrorism Operations Section, Counterterrorism Division, Federal Bureau of Investigation and Branden Fuller, Unit Chief, Strategic Engagement Unit, Counterterrorism Division, Federal Bureau of Investigation.   
  • HSTF is co-chaired by Charlie McGonigal, Brookfield’s Senior Vice President, Global Security & Life Safety, U.S. Office Division, and Dan Kennedy, Unibail-Rodamco-Westfield (URW) Senior Vice President, US Security Operations.
  • McGonigal said, “Our well-established industry relationship with federal, state and local law enforcement partners and homeland security officials facilitates a robust information-sharing exchange that benefits both the commercial facilities sector and government officials. We rely on timely updates from them and they look to us for insight on threats to commercial real estate.”
  • Kennedy added, “Last week’s remote meeting of our Homeland Security Task Force had a high participation rate from Roundtable members across the country eager for the view of security officials on potential security threats surrounding the elections. To raise awareness of how these kind of tensions, or other threats, could manifest in actions affecting CRE requires these ongoing briefings and useful meetings.”
  • The HSTF will hold another WebEx meeting on Friday, November 6, 2020 at 11:30 AM ET. The focus of the meeting will be to discuss any post-election unrest and discuss strategies used to address those situations.  For more information, please contact Roundtable Senior Vice President Chip Rodgers.

A summary of election-related security threats will also be one topic of discussion on January 27, 2021 during HSTF’s meeting that will be held in conjunction with The Roundtable’s all-member State of The Industry Meeting.

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New Coalition Advocates to Keep Jobs and Businesses Protected From Future Economic Shutdowns

Posted on by Trey Jackson

Aims to Develop Business Continuity Insurance in Public/Private Program

WASHINGTON, D.C., Oct. 28, 2020—The newly formed Business Continuity Coalition (BCC) brings together more than two dozen industries and companies, which represent more than 50 million workers, to develop a plan with policymakers and other stakeholders to protect American jobs and to limit future economic damage from pandemics and other national emergencies that cause business interruptions.

Closures and shutdowns caused by COVID-19 have significantly impacted the employees and operations of businesses across the country, and the BCC, representing the restaurant, entertainment, hospitality, gaming, retail, communications, broadcasting and real estate industries, encourages policymakers to take urgent steps to prepare for future risks.

The BCC is advocating for a public/private business continuity insurance program that, in the event of a government-ordered shutdown, will enable employers to keep payrolls and supply chains intact, helping to limit job losses and furloughs, reducing stress on the financial system, and speeding economic recovery when government-imposed limitations on operations are lifted.

“Restaurants across the country were the first shutdown by the pandemic and will be the last to recover,” said Sean Kennedy, executive vice president of public affairs, National Restaurant Association. “Restaurants that have managed to survive are faced with an uncertain future and long-term challenges as pandemic threats continue to loom. A public/private backstop for business interruption insurance will help remove one of the unknowns in rebuilding and help small and large business owners plan for the future.”

Patrick Kilcur, executive vice president, Motion Picture Association, and Jean Prewitt, president & CEO, Independent Film & Television Alliance, agree with the BCC’s critical objective and its importance to their industry. Kilcur said, “The American film, television, and streaming industry is a strong contributor to the U.S. economy, supporting more than 2.5 million jobs in all 50 states. COVID-19 has caused enormous uncertainties and challenges for our industry. We look forward to working with the BCC on a public/private insurance solution which will be essential as we navigate returning to production.”

“Insurance policies are vital to ensuring our industry can return to production in a meaningful way, and the entertainment industry looks forward to working with the BCC and the other stakeholders on this important initiative,” Prewitt stated.

The effort to create a plan for a public/private business continuity insurance program is in its early stages. The plan must meet the needs of a broad range of groups: the businesses and employers directly impacted, insurers, lenders and other creditors, policymakers, and importantly, taxpayers.

Steven A. Wechsler, president and CEO of Nareit, said, “We believe it is better to plan and prepare now for the future economic risks associated with pandemic-related and other potential government shutdowns of the economy rather than just wait for the next time.”

The need for such a program is not in doubt, said Jeffrey D. DeBoer, president and CEO of The Real Estate Roundtable. “The devastating economic impact of this pandemic and the unprecedented government-mandated shutdown has dramatically demonstrated the need for readily available and affordable business continuity insurance,” he said.

According to the coalition, there are a number of successful models that can provide guidance in structuring a business continuity insurance program. Among them are the Terrorism Risk Insurance Program originally enacted following the 9/11 attacks and the War Damage Corporation developed during World War II.

Steering committee members of the BCC include American Resort Development Association, Building Owners and Managers Association, Fox Corporation, Independent Film & Television Alliance, International Council of Shopping Centers, Motion Picture Association, NAIOP – Commercial Real Estate Development Association, Nareit, National Association of Realtors, National Restaurant Association, Sony Pictures Entertainment, The Real Estate Roundtable, and ViacomCBS.

The full list of BCC members is available at www.businesscontinuitycoalition.com.

About the Business Continuity Coalition

The Business Continuity Coalition (BCC), made up of business insurance policyholders from numerous industries, was created to advocate for the development of a public/private business continuity insurance program. A business continuity insurance program would help businesses protect their employees’ jobs and limit future economic damage from pandemics and other national emergencies that cause business interruptions and closures. The BCC is made up of organizations from the restaurant, entertainment, hospitality, gaming, communications, and broadcasting industries, as well as the apartment, healthcare, industrial, office, and retail real estate sectors. www.businesscontinuitycoalition.com

 

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