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Real Estate Roundup 8.7.20

Real Estate Roundup:

Leasing

Backal Hospitality Group argued that because Governor Cuomo banned large gatherings, it could walk away from its lease at Moinian Group’s 627 West 42nd Street. Backal brought the case after Moinian drew down a $500,000 letter of credit in June to collect more than $400,000 in rent.

  • Verdict: State Judge Kathryn judge ruled the tenant is still on the hook for future rent. Had the decision gone the other way, retail tenants across the city — and the country — might have copied the legal strategy to void their own lease agreements in light of Covid-19. (TRD)

Additional Q2 Earnings Calls 

  • Brookfield Property Partners collected just 34 percent of rent across its retail portfolio in the second quarter, helping drive another sharp decline in earnings this year. (EarningsTranscript)
  • JLL saw a 54 percent reduction in EBITDA to $103 million during the second quarter compared to the same time last year. (EarningsTranscript)
  • Zillow said revenue grew 28 percent to $768 million, as home buyers shopped online. But overall, the company’s net loss widened to $84.4 million during the second quarter, compared to $71.9 million a year ago. The losses are tied to its expensive bet on iBuying, which CEO Rich Barton has described as its “moonshot” opportunity. (TRD)

Other news 

  • Mayor Bill de Blasio said earlier this week that the city was considering letting its outdoor-dining program, dubbed Open Restaurants, extend into the colder months. Currently, the program is slated to end Oct. 31… So far, restaurants are mixed on whether they would participate in outdoor dining in the colder months. Many owners said they would embrace the idea of serving customers outside even in the chilly weather, while others pointed to the added expense of outdoor heaters. In any case, the Mayor said that the program would be repeated next year, starting June 1 and potentially earlier. (WSJ)
  • The parent company of women’s apparel retailer New York & Co. has found a potential buyer offering $20 million for the intellectual property and e-commerce business of two of its brands as its brick-and-mortar retail operations wind down. The proposed acquisition includes the trademarks, websites and rental-subscription businesses of the New York & Co. and Fashion to Figure brands. Last month, RTW filed for chapter 11 bankruptcy protection with plans to liquidate all 387 of its stores after being hurt by forced closures and supply-chain issues during the coronavirus pandemic. (WSJ)

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