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Beset by COVID-19 and its fallout, local landlords are offloading their properties to cash-rich institutional investors, and America's real-estate market may never be the same, Reuters reported. Before the pandemic, boyhood friends Michael Murano and Richard Tyson owned 96 rental units in their hometown of Rochester, New York. They offered accommodation to low-income tenants, many in the service industry, from rooming houses to single-family starter homes. Today, they're well on their way to liquidating the entire portfolio. Two-thirds of the units are already gone. The buyers? Large investors with all-cash offers. Many of America's landlords have gone a year and a half without being paid by tenants, who've been protected by several state and local eviction moratoria as well as an umbrella federal ban enacted 11 months ago. The owners have been waiting for $46 billion to help them survive without that income. The funds were approved by Congress months ago, but bureaucracy creaks; only $3 billion has reached them so far, according to U.S. Treasury Department data.

The Consumer Financial Protection Bureau (CFPB) yesterday launched a website meant to connect struggling tenants with federal rental aid providers with less than a week until a federal eviction ban is set to expire, The Hill reported. The CFPB’s rental and utility assistance tool is intended to match tenants with the state and local organizations charged with disbursing more than $46 billion in federal aid meant to prevent a wave of evictions. While the federal government has disbursed all of that money to state and local distributors, less than 7 percent of it has reached tenants, landlords and utility companies by the end of June. Millions of U.S. households could face eviction proceedings within days with the Centers for Disease Control and Prevention's (CDC) moratorium set to expire on Aug. 1. Researchers at the Aspen Institute, a nonpartisan think tank, estimated 15 million people in 6.5 million households are at risk of eviction when the moratorium expires.

Official advisers to Washington Prime Group Inc. stockholders, skeptical of the company’s proposed sale to SVPGlobal, are trying to slow down the mall landlord’s bankruptcy, Bloomberg News reported. A government-appointed group of Washington Prime stockholders has asked Judge Marvin Isgur to extend key deadlines in the insolvency proceedings by more than a month, arguing in court papers that the group’s advisers don’t have enough time to evaluate the real estate investment trust’s chapter 11 exit plan. Washington Prime may be worth more than the plan implies, but more time is needed to figure that out, the group says. Washington Prime entered bankruptcy last month after the pandemic forced shoppers to stay home, crushing its tenants and sapping revenues. But rising vaccination rates and a resurgent U.S. economy have begun to reverse the company’s fortunes, making it difficult to pin a value on its portfolio of roughly 100 shopping centers across the U.S. The company plans to exit bankruptcy by handing ownership to investment firm SVPGlobal in exchange for debt forgiveness, assuming no better offers come in. But the plan’s August approval deadline leaves relatively little time for competing bidders to make moves, and the company has said new offers must be all cash and exceed $2.3 billion. Read more.

Occupancy issues are at the heart of many significant retail cases, as detailed in the ABI publication Retail and Office Bankruptcy: Landlord/Tenant Rights, available at the ABI Store. 

Owners of the Aloft Miami Brickell hotel filed for bankruptcy due to the effects of the COVID-19 pandemic, the South Florida Business Journal reported. Mary Brickell Village Hotel LLC, a subsidiary of Miami-based real estate developer and hotelier HES Group, filed for chapter 11 bankruptcy protection on Wednesday in the Southern District of Florida. The declaration comes after DF VII Reit Holdings LLC, an affiliate of New York-based Torchlight Investors, filed a foreclosure complaint agains the company and its guarantors over missed mortgage payments starting in April 2020, according to court documents. Court documents show the hotel's loan was made for $17 million in 2014 and sold on the commercial mortgage-backed securities (CMBS) market. According to CMBS data from Bloomberg, Torchlight Loan Services was appointed special servicer 60 days after the loan went into default.

After hitting the pause button during the pandemic, the eviction machinery in New York City, one of the world’s most expensive housing markets, will likely soon start firing up again, the New York Times reported. For roughly 16 months, the city’s renters have been shielded from eviction under broad protections imposed by the federal government and New York State to keep people in their homes during the coronavirus outbreak. But those safeguards are soon expected to come to an end, setting off alarms about the fate of struggling tenants who owe months of unpaid rent, cannot make their next payments and could face homelessness. Nearly 500,000 households in New York City have rent arrears that collectively total more than $2.2 billion, according to an analysis of census data by the National Equity Atlas, a research group associated with the University of Southern California. At the same time, the financial challenges facing many tenants are squeezing smaller landlords who rely on rent to pay their own bills. The federal moratorium, enacted by the Centers for Disease Control and Prevention, has been extended several times throughout the pandemic but is now scheduled to expire at the end of July. After an additional one-month extension in June, the agency said that the protections would likely lapse for good this month. But tenants across New York State will have another month of protections under a state eviction moratorium, which expires at the end of August. New York State officials have not given any indication that the moratorium will be extended again, as it has been multiple times during the pandemic. New York State has set aside $2.7 billion in financial aid, largely from the federal government, that tenants can request through an application the state launched in June. If their applications are approved, up to a year’s worth of unpaid rent will be covered, as well as a year’s worth of unpaid utilities. Lower-income tenants can qualify for an additional three months of rental payments. The payments go directly to the landlord.

Rep. Alexandria Ocasio-Cortez (D-N.Y.) on Friday called on the Centers for Disease Control and Prevention (CDC) to extend its eviction moratorium amid a massive backlog in the distribution of rental aid, The Hill reported. In a Friday statement, Ocasio-Cortez urged the Biden administration to prevent the CDC’s ban on most evictions from expiring on July 31 despite the agency saying in June it would not likely extend the ban past that date. Ocasio-Cortez said that it was “reckless” to allow the ban to lapse with a fraction of the $46 billion in federal rental aid actually in the hands of tenants, landlords and utilities companies. More than 4.7 million Americans are not current on their housing payments and expect to be evicted or foreclosed on within two months, according to a survey conducted by the Census Bureau between June 23 and July 5. Roughly 8 million also said they don’t expect to make their next housing payment on time.