REAL ESTATE

How We Gonna Pay Last Month's Rent?

We always knew that when the revolution came, it would start with pineapple upside-down cheesecake. On March 18, The Cheesecake Factory told landlords it couldn't pay April rent.

Mattress Firm has done the same. So has Subway, which declared the spread of coronavirus a “force majeure,” legalese for “this was so unpredictable we can't fulfill the obligations of the contract.” Adidas used the German government’s COVID-19 response as grounds to withhold rent, too.

With physical retail’s revenue streams all but Hoover Dammed right now, these high-stakes gambles illustrate the industry’s level of despair:

• OpenTable said U.S. restaurant bookings are down 100% annually right now. 
• JPMorgan found in 2016 that the median independent restaurant has enough cash to last 16 days and independent retailers 19. 

But abstaining from paying rent has downstream consequences. 

• Tenant troubles today are landlord troubles tomorrow. Many property owners carry chunky debt loads—and they might rather cash a smaller rent check now than lose their tenants on the precipice of a recession.
• Major U.S. mall owner Taubman Centers told its tenants they must pay April rent even though all its malls are closed.

Of course, the rent issue isn’t just between retailers and landlords

UChicago found one-third of adults can’t cover necessities after missing a single paycheck. One in four tenant families pay over half their income in rent. And for the big finish: Residents owe about $40 billion in April rents, reports Slate.

So what happens now? The first of the month is two days out. Expect chaos...followed by a tsunami of litigation once this storm passes.

COVID-19

Coronavirus Catch Up

With over 135,000 Americans confirmed to have COVID-19, the U.S. now has the most cases in the world by a considerable margin. Here’s the latest:

Travel advisory: On Saturday, President Trump floated the idea of a short-term quarantine for the tri-state area around New York City but later backed off. He extended social distancing guidelines to April 30.  

Sign of the times: The 2020 Detroit auto show has been canceled while the venue that was supposed to host it gets transformed into a FEMA field hospital, CNBC reports.

Mass exodus in India: Hundreds of thousands of migrant workers left India’s cities for their home villages. The government’s 21-day quarantine order instantly eliminated their sources of income.

Good news for testing: On Friday, the FDA approved a coronavirus test made by Abbott Labs. It takes as little as five minutes to deliver positive results and could be coming to urgent care centers this week.  

A path forward: The American Enterprise Institute released a "road map" to reopening the economy and gradually moving away from heavy physical distancing measures. Right now, the authors argue we need to get much smarter about testing. 

INEQUALITY

Not All Quarantines Are Created Equal

With a single Saturday morning Instagram post, billionaire producer David Geffen reminded us that COVID-19 hits differently across class lines.

Pandemics are sometimes considered an equalizer—after all, everyone from Tom Hanks to your neighbor can get infected. But today, the spread of the coronavirus and the shutdown of the economy have exposed a “pandemic caste system,” writes the NYT.

• “The rich holed up in vacation properties; the middle class marooned at home with restless children; the working class on the front lines of the economy.”

The front lines

Today, employees of Instacart are planning a strike over what they say is a failure by the grocery delivery company to protect workers from coronavirus health risks. They’re also demanding higher pay.

• As Americans ditch physical grocery store shopping for delivery, Instacart has emerged as an essential service during this crisis.
• Instacart hires gig economy workers known as “shoppers.” The company currently has about 200,000 shoppers and plans to hire 300,000 more in the next three months.

Bottom line, via the Brookings Institution: “Working from home is a privilege.”

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COMMUNICATION

She Was Onto Something

Before the coronavirus pandemic, phone calls were considered a cultural relic of yesteryear. In other words, we were all that Ozzy Osbourne meme. 

But now, as we lock ourselves in our homes, phone calls are rivaling jigsaw puzzles in terms of unexpected beneficiaries. 

The data to back it up: Verizon said it’s seen an average of 800 million wireless calls daily on recent weekdays, almost 2x the call volume on Mother’s Day, per the WSJ. And AT&T said wireless voice minutes last Monday increased 39% from the average Monday.

Parting thought...one of the pleasant surprises of this situation has been reconnecting with old friends. You might want to scroll through your contact list and call that person who would be your best friend if you were living in the same city. 

CALENDAR

The Week Ahead

Monday: Stephen Colbert and Conan are back with new full episodes, while James Corden is hosting a primetime special

Tuesday: ConAgra earnings

Wednesday: ISM manufacturing index; Census Day; April Fools' Day is canceled 

Thursday: Weekly jobless claims; Walgreens Boots Alliance earnings; if we get something wrong on International Fact-Checking Day…. 

Friday: March jobs report; Constellation Brands earnings

WHAT ELSE IS BREWING

• HQ Trivia came back in surprise fashion last night thanks to an undisclosed investor. 
• SeaWorld Entertainment is furloughing 90% of its workers. 
• Satellite internet startup OneWeb filed for bankruptcy, citing the coronavirus as blocking its path to new investment. 
• Jefferies Group Chief Financial Officer Peg Broadbent, 56, died from coronavirus complications. Veteran CBS News journalist Maria Mercader, 54, also died from COVID-19.
• Rent the Runway laid off its entire retail staff via Zoom.
• Walmart said it’s seen a boom in sales for tops but not for bottoms as our new collective work dress code is strictly waist-up.

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CALENDAR

Your Daily Quarantine Planner: March 30

It's Neal Freyman, the Brew's managing editor. I read a message on Twitter yesterday that helped shaped my thinking of the current situation: "You're not stuck at home. You're safe at home." With that in mind, here's the great day I planned for you...

 Morning workout

Do you want to do this 30-day ab program together? Either way, the entire website is gold. 

Work soundtrack 

How can I recommend anything but Eric Clapton on the legend’s 75th birthday? "Keep on Growing" is a groove. 

Lunch, but make it productive

Level up: Read this comprehensive guide to digital working. There are useful tips throughout. 

Do good: Here’s a list of dozens of organizations helping folks in the restaurant and farming industries hurt by the economic crisis.

Stay up to date: Citymapper is an excellent resource to keep you informed about public transportation. Play around with their Mobility Index.

Dinner plans 

Searches for “How to make bread” on Google have skyrocketed. Maybe you should try to be like everyone else and make sourdough. Or you could try this dish, though honestly I don’t think you should.

Evening activity

No screen: I’ve been playing a lot of Settlers of Catan recently (recently = while in quarantine). Bohnanza is also a really fun board game about bean farming. 

Screen: If you haven’t dipped your toes into Bollywood yet, I highly, highly recommend the movie 3 Idiots. It's way better than Tiger King. 

BEYOND CROSSWORD

Here at Morning Brew, we save the brain workouts for the very end. And remember, we've moved our Beyond Crossword to an interactive format online: Play the crossword here.

Neal Freyman / Amuse Labs

Across
1. Save for later
4. No. 1 in cloud
6. Peter Thiel's "Zero to ____"
8. Where you might find a match
9. John who avenges dog's death

Down
1. Back-to-school company
2. Uber in India
3. Soybean product
5. Zoom alternative
7. WFH necessity

BEYOND CROSSWORD ANSWER

Across
1. Save for later = bookmark
4. No. 1 in cloud = AWS
6. Peter Thiel's "Zero to One"
8. Where you might find a match = Tinder 
9. John who avenges dog's death = Wick

Down
1. Back-to-school company = Bic
2. Uber in India = Ola
3. Soybean product = miso
5. Zoom alternative = Webex 
7. WFH necessity = wifi