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Real Estate Roundup 6.24.20

Real Estate Roundup:

  • While offices were permitted to reopen on Monday, landlords said most of their tenants chose to continue working remotely… Based on initial data collected Monday, Rudin Management said it reached just 5.2 percent of normal occupancy across its 14-building commercial portfolio. Dino Fusco, COO at Silverstein Properties, anticipated similar levels based on the experience of cities that reopened ahead of New York, such as Tokyo. “A lot of it had to do with building tenants not feeling comfortable with public transportation,” Fusco said. (Politico)
  • Follow Facebook’s actions, not Zuckerberg’s words – the demise of the office has been grossly exaggerated! The social media giant is in talks with Related Companies to take over the three floors Neiman Marcus currently occupies at Hudson Yards. (WWD+NYPost)
  • Traditional office space will endure and thrive: Recent moves by companies including UberBP, and global law firm Covington & Burling LLP suggest some companies are still eager to bolster their office space in Europe (WSJ)

Hotel layoffs continue

  • At least 22 hotels have filed notices with the New York Department of Labor this month to announce that they will lay off their staff because of Covid-19… Under New York law, private companies with at least 50 employees experiencing mass layoffs must file notices 90 days in advance or as soon as possible if there are circumstances such as the pandemic. (TRD)

Residential Condo market shows small signs of life

  • There were 12 contracts signed last week for properties above $4 million, which represents the highest total in 13 weeks. The most expensive contract was for a penthouse at 56 Cooper Square, which was last asking $9.9 million. (OlshanRealty+TRD)


Mall owners look to keep retail tenants alive: Simon Property Group is digging into its wallet to rescue another big tenant, a move that could help stabilize its mall business but one that raises new questions about the industry’s longer-term viability. The mall owner is teaming up with Brookfield Property Partners in exploring a bid for J.C. Penney. The department-store chain filed for bankruptcy in May.

  • Worth Noting: If the two sides reach a deal, it would be Simon’s third tenant acquisition in four years and its third partnering with Brookfield. The two property owners, in a consortium, purchased apparel retailers Forever 21 in February and Aéropostale in 2016. Analysts say that the trend of buying distressed tenants to maintain occupancy isn’t sustainable and is a worrying sign that property owners’ rent-collection business model is under siege. (WSJ)


  • While the 10-year Treasury yield has dropped by 1.2 percentage points since the start of the year, the 30-year fixed rate mortgage average has fallen by just half that amount. The gap of about 2.5 points between the two figures is the largest it has been since late 2008, when the financial world was in chaos… Factors in the retail mortgage market rather than in the wholesale mortgage market may be slowing the fall in rates. Such factors may be temporary. If the 30-year mortgage rate follows past patterns found in times of volatility, the rate could fall to a historic low below 3%. (Federal Reserve Bank of St. Louis)


  • Soho House has secured an $100 million equity injection to shore up its finances after the coronavirus pandemic hampered spending across its global network of upmarket venues. Ron Burkle, the American billionaire who is Soho House’s biggest investor, led a group comprising new and existing shareholders in providing the new money in recent weeks. (SkyNews+Bloomberg)
  • The upscale, wellness-focused co-working firm The Assemblage abruptly ceased operations at all three of its Manhattan locations last Friday. (CO)
  • Noam Management has filed a lawsuit against Knotel for skipping out on its rent payments during the coronavirus pandemic. The company owes $169,040 after it stopped paying rent from March until June for its 10,000-square-foot space at 25 West 26th Street. Leaked financials showed that the co-working firm had net losses of $223 million in 2019 and lost $49 million since March. At the time, Knotel had about $36 million left in the bank. (CO)

Other news 

  • SL Green’s Co-Chief Investment Officer Isaac Zion is leaving the REIT to pursue other opportunities. (Bloomberg)
  • Vornado Realty Trust is exploring the potential sale of two office towers that it co-owns with the Trump Organization.The REIT trust is working with brokers to market its 70% interest in the properties, 555 California Street in San Francisco and 1290 Avenue of the Americas in Manhattan. The Trump Organization may also sell its stakes in the buildings. (Bloomberg)
  • La-Z-Boy said it is ramping up furniture production as consumers begin returning to reopened stores. The manufacturer and retailer of reclining chairs, sofas, and other home furnishings is moving toward 80% of prior-year production levels. (WSJ)
  • A Los Angeles judge denied a request for a mistrial in the murder case against New York real estate heir Robert Durst after a three-month delay from the coronavirus outbreak. (AP)
  • William Millichap, the co-chairman of brokerage Marcus & Millichap, has died at the age of 76. The executive passed away following a year-long battle with cancer. (CO)

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