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Real Estate Roundup 9.2.20

Real Estate Roundup:


  • J.C. Penney’s lenders are preparing to take ownership of the retailer as talks with potential outside buyers reach an impasse. The company will continue exploring bids while it works with lenders to negotiate a debt-for-equity swap in the next 10 days. The lender group originally aimed to take over J.C. Penney’s real estate but sell the retail business. Mall owners Simon Property Group and Brookfield Property Partners had been in talks for months with J.C. Penney’s lenders about buying the retail business, but discussions over the weekend couldn’t bridge the gap between the parties. (Bloomberg)
  • In Miami, a luxury-shopping-center landlord began legal proceedings to evict Saks Fifth Avenue two weeks ago for nonpayment of rent amounting to $1.9 million as of early July. Smaller retail landlords also have filed lease termination and eviction notices to restaurants, bridal shops, entertainment operators and co-working tenants that haven’t paid rent and weren’t able to come to mutually agreeable modifications to their leases. Before the pandemic, most of these disputes end up getting resolved before the sheriff throws them out, but lawyers said they are seeing higher volumes of disputes which could lead to more evictions. (WSJ)
  • Staten Island Outlet Mall Struggles to Pay Back $8.5M City Debt… Empire Outlets has missed payments on a loan from the New York City Economic Development Corporation, according to the corporation’s enforcement reports dated June 1 and August 1. With tourism floundering and daily ferry rides down to under 23,000 a day, a 65% drop from a year ago, shoppers have been scarce. The 340,000-square-foot retail and hotel complex, which has struggled to fill its storefronts, cost $350 million to build. Nearly $100 million of that came from state and city subsidies. (TheCity)
  • NYC to do ’virtual inspections’ of gyms set to reopen today… A virtual inspection will consist of a video call between a gym operator and a Health Department worker in which the operator shows their posted safety plan, the site’s supply of face coverings, social distancing markers, cleaning log, supply of soap and paper towels, designated area for pick-ups and deliveries and health screening records. (NYDN)

Lawyers are busy 

  • Lender Argentic Real Estate Investment has filed a lawsuit with the state Supreme Court to foreclose on and sell Ashkenazy Acquisition’s 115 Seventh Avenue (former Barneys building). The court filing says Ashkenazy has failed to pay back a $46.2 million loan backed by the Chelsea building even though the loan matured in May. Ashkenazy also owns Barneys New York’s Madison Avenue store, which also shut its doors in February. (TRD)
  • All Year Management’s months-long effort to sell a $300 million Brooklyn multifamily portfolio to David Werner has hit another snag. Yoel Goldman’s firm disclosed that the buyer had yet to pay the remaining $6.5 million deposit for the first part of the deal that was supposed to close on Aug. 27. The first tranche is expected to include 45 buildings for $176.6 million, and the second part is supposed to consist of 23 buildings at a purchase price of $125.8 million. Emerald Equity’s Isaac Kassirer has also been involved in the negotiations and the deal has been described as still ‘alive’. (TRD+DailyBeatNY)
  • Chetrit Group is suing its tenant, Discovery Communications for June and July rent at 850 Third Avenue. Discovery’s lease expired at the end of May, but Chetrit says it did not vacate. Discovery paid June rent but wants that money back, and did not pay July rent “either under the 150% holdover rate or the base rate.” Chetrit wants a court to decide whether the pandemic permits its tenant to escape payment while maintaining occupancy, claiming Discovery owes it more than $840,000, mostly in holdover charges. (TRD)
  • An Italian restaurant in Queens launched a $2 billion class-action lawsuit against the city and state to force the return of indoor dining in New York City after it was indefinitely postponed last month. The suit is asking the city and state to immediately bring back indoor dining and stop Cuomo from banning indoor dining again, and is seeking $2 billion in damages. It does not say how many other restaurateurs signed on but said there are “several hundred members” in the class-action claim. (Crain’s+CO)


  • AB & Sons has acquired a development site at 2870 Ocean Avenue in Sheepshead Bay for $15.5 million. The site allows the development of around 130,000 square feet, and the Chetrit family is panning a mixed-use apartment building. (TRD)


  • Mayor de Blasio reached a deal early Tuesday with unions representing teachers and principals, clearing the path for New York City to become the only major school district in America to welcome children back into classrooms this fall. The city’s 1.1 million schoolchildren will now start both remote and in-person classes on Sept. 21, 10 days later than originally scheduled. Agreeing to a major union demand, Mr. de Blasio said the city would require monthly, random testing of between 10 and 20 percent of students and staff in all city school buildings starting in October, with results ready within 48 hours. (NYTimes)


  • Amazon is opening a new Whole Foods store in Brooklyn, but it won’t be open to the public. In a first for the company, the Whole Foods store will be permanently online only, charged with fulfilling online grocery orders for customers in the Brooklyn area. The store, which opened yesterday, is located in Brooklyn’s Industry City complex, based in the borough’s Sunset Park neighborhood. (CNBC)

New to the market 

  • Cindat USA is looking to sell a preferred equity stake in a portfolio of seven select-service Manhattan hotels it bought in 2016 as part of a joint-venture with Hersha Hospitality Trust. The company, which is backed by China’s Cinda Asset Management and Taikang Life Insurance, is eyeing pricing that would value that 1,087-room portfolio in the low-$400 million range. That’s a significant discount to the $571 million the partners paid for the portfolio four years ago. (TRD)

Other news 

  • REBNY reported that investment sales volume had declined 54 percent year over year during the first six months of 2020. There were 1,229 transactions — representing a 32 percent drop in the number of deals compared with the same period last year—totaling $10.5 billion. Tax revenue dollars generated by investment sales also declined, by 49 percent to $314 million, compared with the last half of 2019. (CO)
  • Beam Living, the management company at the sprawling Stuyvesant Town complex in Manhattan, has let some employees go. Staff reductions were attributed to residents leaving the complex, which was evidenced by moving trucks dotting the avenues in the complex. Beam Living is owned by Blackstone Group. (TRD)

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