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Real Estate Roundup 5.1.20

(Credit: David Williams & Bloomberg)

Real Estate Roundup:

Politics 

  • A rent freeze for most rent-stabilized tenants is looking more likely after one of the two landlord representatives on the Rent Guidelines Board said Thursday that she can see the logic of no increase for one-year leases. Two-year leases are a different story. Board members questioned whether they could set the rent increases to zero for the first year of two-year leases and then a different percentage increase for the second. (TRD)
  • The DOB indicated that it audited construction work that purportedly supported essential businesses. At some sites, the agency found more than what was permitted by state rules enacted to curb coronavirus cases. Applicants can ask for a second chance but in the meantime must stop working. (TRD)
  • Federal Reserve Chair Jerome Powell has sketched out an altogether bumpier ride for the U.S. economy than many are predicting – one that sees business activity stop and start for months to come, until an effective treatment or vaccine for the novel coronavirus can be found. (Reuters)

Tech 

  • Ghost kitchen startup Kitopi cut 124 of its New York City staff just months after it expanded into the city. The Dubai-based company manages shared kitchens for delivery-only eateries. Although these types of startups should be well positioned to take advantage of the current environment, many lack the infrastructure and existing revenue to capitalize. (CO)

Retail 

  • Macy’s announced an ambitious plan on Thursday to reopen all of its 775 locations, including Bloomingdales and Bluemercury, in the next six to eight weeks. The reopening plan will start on Monday with 68 stores in Georgia, Oklahoma, South Carolina, Tennessee and Texas. Macy’s hopes to reopen another 50 locations on May 11. The company expects that its reopened stores will only bring in about 15 to 20 percent of their typical business at first and “slowly build” from there. Macy’s has been offering curbside pick up at about 20 stores for the past week. (NYTimes)
  • Hudson’s Bay Company (HBC), the parent company of Saks Fifth Avenue, will temporarily lay off 507 retail workers in the city. (CO)
  • Sycamore Partners is trying to back out of its $525 million deal to buy a majority of Victoria’s Secret from struggling L Brands – the deal was signed on February 20. By March 20, shares dropped from $23 per share to less than $10. The private equity firm isn’t the only buyer trying to get out of deals. (NYTimes)
  • Many Americans would return to Theaters if new protocols were in place… The combo of adhering by White House guidelines, sanitizing and staggered seating resulted in 53 percent of respondents saying they would likely to buy a movie ticket within the first month. (THR)

Office Leasing 

  • Digital marketing firm Jellyfish is leaving its WeWork location for 693 Fifth Avenue in Midtown. The company signed an eight-year lease for 9,508 SF on the entire 11th and 12th floors of the building, which is owned by Financière Marc de Lacharrière. Asking rent on the deal was $80 per SF. (CO)

Other news 

  • Barclays CEO Jes Staley said that headquarters built to house thousands of staff might be a “thing of the past” if social distancing means only two people can take an elevator at a time. Deutsche Bank AG’s Christian Sewing said the crisis highlighted how much the lender could save on office costs. He added that the last four weeks “have shown us opportunities to cut additional costs. If we look at our travel costs, if we look at our entertainment costs, if we look at the real estate costs, all this is underway.” (Bloomberg)
  • TPG Real Estate Finance Trust (TRTX) allegedly stopped funding some loan advances about a month and a half ago due to financial pressure and liquidity issues. Somera Road claims advances stopped in mid-March on the $60.2 million first mortgage loan it received from TRTX on January 8 last year because the lender was cash-strapped. (CO)

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