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The pandemic has hit few mall operators harder than Pyramid Management Group, a family-run owner of 14 U.S. shopping centers worth $4 billion before lockdowns hammered property values, Bloomberg News reported. Reappraisals — triggered last year amid the firm’s mounting mortgage delinquencies — slashed valuations on eight of Pyramid’s malls by 59% on average, leaving those centers worth less than their debt. Even with that burden, Chief Executive Officer Stephen J. Congel is optimistic his company can withstand the crisis that has pushed other mall owners to file for bankruptcy. “I’m paying a $50 bounty for somebody who can come up with a more dramatic word than ‘apocalyptic,’” Congel said in an interview. “We don’t believe that to be the long-term forecast for the viability of the industry.” Malls were losing market share to e-commerce and discount retailers long before the pandemic. Now, as tenants withhold rents and shutter stores, only about half of the country’s 1,100 enclosed regional centers are likely to survive, according to Floris van Dijkum, an analyst with Compass Point Research & Trading. The delinquency rate on regional mall commercial mortgage-backed securities was 22.9% in February, the highest of any real estate category, according to Moody’s Investor Service. Even the strongest landlords — Simon Property Group Inc. and Brookfield Asset Management Inc. — have talked about walking away from some of their shopping centers rather than throwing good money after bad.

Americans extracted more cash from their homes through cash-out refinancings in 2020 than in any year since the financial crisis, the Wall Street Journal reported. U.S. homeowners cashed out $152.7 billion in home equity last year, a 42% increase from 2019 and the most since 2007, according to mortgage-finance giant Freddie Mac. It was a blockbuster year for mortgage originations in general as well: Lenders churned out more mortgages than ever in 2020, fueled by about $2.8 trillion in refis, according to mortgage-data firm Black Knight Inc. Some borrowers viewed cash-out refis as a way to cushion themselves against an uncertain economy last year. Others wanted to build and redecorate, and being stuck at home gave them the time to do the paperwork. Homeowners also had more equity available to tap: Though home prices tend to fall during economic downturns, they jumped during the Covid-19 recession. The median existing-home price rose to about $310,000 in December, an increase of almost 13% from December 2019. The acceleration in price growth has spread past cities to suburban and rural areas as Americans re-evaluate where they want to live during and after the pandemic. Cash-out refis got a bad rap after they exploded in the run-up to the 2008 financial crisis. Borrowers tapped their homes like they were ATMs. When home prices plunged, they were left owing more than their homes were worth. Now, in 2021, many economists expect home prices to keep growing.

An independent bankruptcy trustee is taking charge of an unfinished hotel in Coachella, Calif., and will be empowered to probe lender allegations that developers bungled the project envisioned as a luxury destination for attendees of the Coachella Valley Music and Arts Festival, WSJ Pro Bankruptcy reported. Judge Sheri Bluebond of the U.S. Bankruptcy Court in Los Angeles on Wednesday granted a request by the lender, an investment fund managed by Calmwater Asset Management LLC, to appoint a chapter 11 trustee over project developer Glenroy Coachella LLC, which filed for bankruptcy last month to avoid a foreclosure sale. The ruling comes after the Calmwater fund and another early investor in the project accused real-estate investor Stuart Rubin, the manager and majority owner of Glenroy Coachella, of mismanaging the project and improprieties such as using a false budget that underreported project costs to get a $24.4 million construction loan. Mr. Rubin in court papers filed last week denied the allegations of wrongdoing, including the claim that he used an alternative budget to mislead the lender. Mr. Rubin said he has spent thousands of hours on the hotel project without collecting a development fee or other remuneration. Judge Bluebond said that there are valid concerns over how the hotel project has been handled, including claims that developers have withheld information and records from investors and a court-appointed receiver, which has been overseeing the project since 2019.

A Times Square hotel and retail property once valued at more than $2 billion is a step closer to foreclosure after a court victory for a group of lenders led by Natixis SA, Bloomberg News reported. The court granted the lenders the right to foreclose on the property, which features the 42-story Times Square Edition hotel designed by Marriott International Inc. and hospitality legend Ian Schrager. The judge also scheduled a hearing to decide how to proceed with a sale. It’s the latest setback for owner Maefield Development, which has been facing foreclosure since 2019, after construction delays and trouble filling the project’s retail space led the lenders behind a $650 million loan to file suit. A foreclosure sale would complete a startling reversal for a property viewed as a marquee development in Times Square. A 2018 appraisal valued the property at $2.4 billion, and a 2019 party to celebrate the rare opening of a luxury hotel in the neighborhood attracted a generation-spanning list of celebrities, from Kendall Jenner to Diana Ross. But Maefield struggled to fill the retail space, and the hotel failed to generate positive cash flow, according to the court ruling, leading lenders to file for foreclosure in December 2019. In the months that followed, the COVID-19 pandemic laid waste to the global hospitality industry, grounding travelers and shuttering hotels. In May, Marriott threatened to strip the Edition brand from the hotel because of cash flow shortfalls, issuing a warning to employees and union officials that the hotel could permanently close in the months to come. Marriott eventually ironed out an agreement with Maefield’s lenders, though the property remains shuttered.

The owner of a three-story office building near Miami’s Brickell neighborhood filed chapter 11 reorganization just days before a foreclosure auction was set to strip it of the property, the South Florida Business Journal reported. CMG Capital LLC sought chapter 11 reorganization in U.S. Bankruptcy Court in Miami on Feb. 27. Steven Suh, Sang Lee, Said Lopez and Alen Hsu signed the petition as members of the LLC. Attorney Nathan G. Mancuso, who represents the debtor, couldn’t be reached for comment. CMG Capital LLC owns the 8,556-square-foot office at 232 S.W. Eighth St., plus a 967-square-foot home at 1431 N.W. 37th Ave. It acquired the office building for $4 million in 2017 and the home for $110,000 in 2019. In the case management summary, CMG Capital LLC said it filed chapter 11 to stay the foreclosure over its property. It valued the two real estate assets at $5.2 million. Elizon DB Transfer Agent LLC won a $2.65 million foreclosure judgment in December against CMG Capital LLC over a loan with $1.85 million in principal, plus interest and fees, outstanding. The foreclosure auction was set for March 1, but the bankruptcy filing stayed it.

Manhattan landlords are pulling unrented apartments off the market at an unusually elevated rate, tightening inventory while rents are low and, in some neighborhoods, still falling, the Wall Street Journal reported. The practice, sometimes known as “warehousing,” has come under greater scrutiny from housing advocates and lawmakers in recent years. Critics charge that removing units from the market creates an artificial scarcity that worsens the city’s housing shortage. Landlords say the decision to warehouse is a necessary response to both regulatory and economic changes, including heightened tenant eviction protections during the pandemic. Building owners removed 1,814 apartment listings in Manhattan last month, according to real-estate data analytics company UrbanDigs. That’s more than three times the number of apartments landlords removed from the market in February of 2020. Reduced demand for Manhattan apartments during the pandemic sent median rental prices down more than 17% for the year ending in December, according to a report from appraisal firm Miller Samuel and real-estate brokerage Douglas Elliman. Rent concessions of up to 25% off the previous year’s rent have become common at luxury buildings, and tenants say they have more negotiating power in new leases than they ever had before.

At a meeting with Treasury Secretary Janet L. Yellen last month, Jeff Williams, the mayor of Arlington, Texas, laid out his grim economic predicament: Heavy spending on coronavirus testing and vaccine distribution had dwarfed dwindling tax revenue, forcing the city to consider painful cuts to services and jobs. While sluggish sales and tourism were partly to blame, the big worry, Mr. Williams said, is the empty buildings, the New York Times reported. Those dormant offices, malls and restaurants that have turned cities around the country into ghost towns foreshadow a fiscal time bomb for municipal budgets, which are heavily reliant on property taxes and are facing real estate revenue losses of as much as 10 percent in 2021, according to government finance officials. While many states had stronger-than-expected revenue in 2020, a sharp decline in the value of commercial properties is expected to take a big bite out of city budgets when those empty buildings are assessed in the coming months. For states, property taxes account for just about 1 percent of tax revenue, but they can make up 30 percent or more of the taxes that cities and towns take in and use to fund local schools, police and other public services.