New York New Developments
Gov. Andrew Cuomo barred all employees of non-essential businesses from reporting to work, and laid out what amounts to shelter-in-place rules for New Yorkers, though he avoided the phrase. The order exempts food businesses and others deemed essential. After saying he will halt all residential and commercial evictions for 90 days, Cuomo noted that landlords would have a hard time renting out vacant apartments anyway, and real estate agents can’t show apartments under the new workforce rules.
About $20 billion in retail property loans are coming due, and it’s unclear how much of that debt will be paid and how that could impact both retailers and landlords.
The Javits Convention Center is being transformed into a 2,000-bed hospital complex to treat coronavirus patients. The hospitals would add 2,000 beds.
New York City added the Navy hospital ship USNS. The 1,000-bed ship will treat patients who are not infected with COVID-19.
Billie Jean King National Tennis Center, which hosts the U.S. Open, will be converted into a 350-bed temporary hospital.
H+H Coler A building will add 240 medical/surgical beds.
The Brooklyn Cruise Terminal will add 750 Medical surgical beds.
Deferred payroll taxes: Employers and self-employed individuals can delay the payment of the employer share of 2020 payroll taxes, to be paid over the following two years.
Net Operating Loss carryback: Rules regarding net operating loss have been modified to remove the 80% taxable income limitation, and losses can now be carried back five years.
Excess Loss Limitations: The excess loss limitation (ELL) rules for pass-through entities are suspended.
Interest Expense Limitation: The interest expense limitations are increased to 50% from 30% for tax years beginning in 2019 or 2020. Taxpayers can also elect to calculate the interest limitation for 2020 using their 2019 adjusted taxable income as the relevant base, which often will be significantly higher.
Advance on credit refunds: Allows employers to receive an advance tax credit rather than a refund.
Charitable contributions: There is a new provision that provides an above-the-line deduction for charitable contributions, plus, the limits on charitable contributions are changed.
Property improvements: Businesses are able to immediately write off costs associated with improving facilities under this provision, rather than depreciating improvements over the building lifetime. Use of retirement funds: The bill waives the 10% early withdrawal penalty for distributions up to $100,000 for coronavirus-related purposes, retroactive to Jan. 1. Withdrawals are still taxed, but taxes are spread over three years, or the taxpayer has the three-year period to roll it back over.
401(k) Loans: The loan limit is increased from $50,000 to $100,000.
Small business owners are also eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
The city paused more than 100 zoning applications from going through the public review process, preventing several massive developments from moving forward. Mayor Bill de Blasio put all projects that must go through the Uniform Land Use Review Procedure on hold. At least two dozen of the stalled applications seek to qualify for Mandatory Inclusionary Housing, which provides a zoning bonus if developers set aside a percentage of units as affordable. The team is seeking to build 2,100 affordable units across nine buildings.
The Department of Buildings newly formed zoning lots cannot consist of partial tax lots. The clarification issued in a sparsely worded bulletin is effective immediately and is not retroactive. In mid February, a judge found that the city should not have let developers SJP Properties and Mitsui Fudosan America use a gerrymandered 39-sided zoning lot for the 668-foot tower, which topped out last summer.
Landlords across the state are bracing for a huge drop in rent payments after Cuomo ordered non-essential workers to stay home to curb the pandemic.
WeWork is trying to slash as much as 30% from its copious load of rent liabilities. Sandeep Mathrani has been contacting the owners of buildings where Wework is a tenant and pitching solutions including revenue-sharing agreements.. Early indications are that landlords are reluctant, WeWork is also offering some tenants discounts to minimize cancellations. The majority of WeWork’s leases are held by special purpose vehicles that would enable the company to renege on paying rents at individual locations without risk to the parent company.
WeWork laid off 250 more people, prior to coronavirus. The job cuts are in its development department. WeWork was trying to reduce its expenses dramatically last fall after its botched IPO attempt and stopped leasing as many locations, which reduced the need for remodeling and construction.
Restaurants have laid off the majority of their employees as restaurants go to take out only.
New York City’s Hotel occupancy was nearly halved from the week earlier to a rate of about 49%. Some hotel owners have said occupancy in their properties is as low as 15%. The New York Hotel Trades Council said roughly half of its 40,000 members have been laid off.
Apollo, Starwood Property Trust, Blackstone Mortgage Trust and others in the shadow banking system stand to lose more as their search for risky, higher-yielding deals leaves them exposed to hotels.
Marriott moved quickly to furlough tens of thousands of workers as the coronavirus pandemic cripples the hotel industry.
Flex office provider Knotel is cutting half of its staff due to the pandemic. The company laid off 30% of its 400-person workforce. It furloughed another 20%.
Toll Brothers filed an application with the city’s Department of Buildings to construct a 13-story mixed-use building at 2686 Broadway, between West 102nd and West 103rd streets. The development will contain about 119,000 square feet and have 73 apartments. 7,700 square feet is zoned for commercial use.
Jacob Chetrit’s $815 million deal to buy the former Daily News Building in Midtown from SL Green Realty is off after Chetrit’s principal lender, Deutsche Bank, backed out.
Kushner Companies has fallen behind on payments for the $285 million senior loan at its 250,000-square-foot retail space in Time Square.
Italian food hall Eataly has been in talks to set up a new gourmet emporium at 660 Madison Avenue. Eataly could take up to 40,000 square feet of the space vacated by Barneys.
Aby Rosen’s plan for the Chrysler Building is still under wraps, but one thing is clear: Its longtime retail tenants are not part of it. The arcade space of the Chrysler Building, now largely vacant, used to be home to a collection of mom-and-pop stores for the daily commuters.
Force majeure clauses drafted as part of real estate leases are generating buzz, with tenants looking to see if the lease itself allows them to walk away from a landlord during a pandemic. “ Force majeure clauses differ. What triggers it and what its triggering means before making a final determination on any given lease. Landlords will often force tenants to keep this type of coverage to ensure they can still collect rent if a tenant's business becomes inoperable. Landlords generally keep their own business interruption policies to deal with future rent losses. Policies require specific language and triggering events for coverage to kick in. “ Most policies with business interruption coverage will not be triggered under this event. Some plaintiff's attorneys are already hunting for ways to make the coverage apply. Each insured, they are going to have to look at their policy.
The Gateway tunnel has suffered another setback at the hands of the Trump administration. In 2017, Gov. Andrew Cuomo and New Jersey Governor Chris Christie agreed to fund the states’ portion of the project, committing $5.5 billion, which would connect New Jersey’s Bergen Palisades to Penn Station in New York. The roughly $11 billion tunnel would be part of a broader passenger-rail infrastructure upgrade that could cost about $30 billion or more.
Colony Capital chairman and CEO Tom Barrack thinks the commercial mortgage market in the United States is on the verge of collapsing. Immediate concerted action must be taken to fend off this crisis and avoid the need for a taxpayer-funded bailout of the real estate market and banks.
The Federal Reserve dramatically expanded its lending programs meant to unclog credit on, by expanding its facilities to include different types of municipal and corporate debt. Another facility will lend to investment-grade companies, and the third will buy corporate bonds issued by highly rated companies in the corporate bond market.
SoftBank recently advised WeWork shareholders that it might renege on part of its rescue package, and a pair of independent directors for the co-working firm are considering all options in response, including legal action. The offer was supposed to be completed by April 1.
IWG, which counts Regus and Spaces among its stable of brands, has asked its landlords for a three-month rent freeze in a letter reportedly sent requesting the rent freeze to at least some of IWG’s landlords in the United Kingdom.
Gov. Andrew Cuomo issued an executive order urging banks to postpone mortgage payments for 90 days for homeowners in financial distress because of the coronavirus pandemic.
Gov. Andrew Cuomo barred brokers showing homes.
Mayor Bill de Blasio said that not all construction might be “essential” after all and has ordered office and residential construction to stop.
New York City collected $28 billion in property tax revenue in 2019.
Landlords and union building employees have reached an agreement to provide the workers extended benefits in response to the coronavirus pandemic.
Convene, the shared office-space provider that is backed by Brookfield Asset Management and RXR Realty, has laid off a fifth of its workforce, or about 150 employees, in response to the slowdown in business brought about by the coronavirus pandemic.
The coronavirus has hit New York City’s homeless shelter system.
With industries like lodging, retail and beyond experiencing mass layoffs, millions of Americans face the prospect of no longer being able to afford rent. Because those tenants are more likely to be living paycheck-to-paycheck in the service sector, they’re going to have a hard time during a period of economic disruption.
United Hoisting Company and JNY Capital are teaming up to bring a roughly 400,000-square-foot commercial project to Long Island City at 38-42 12th Street. United Hoisting Company owns and which JNY Capital has joined as a joint venture partner in a $32.5 million deal.
Gerber Group laid off 400 workers across its 10 venues in three cities.
The state has exempted construction, banks and certain residential services from a new work-from-home mandate. The governor announced the order but did not specify what “essential” businesses would be exempt from the rule.
Nancy Pelosi and Kevin McCarthy urged lawmakers to consider economic benefits for independent contractors, which includes real estate agents, and “not limit this essential support to W-2 employees and the most-frequently-discussed industries.”
CBS pulled its Black Rock tower building off the market, which had been aiming for a price north of $1 billion.
Prodigy Network has staved off foreclosure at 17 John Street and 85 West Broadway With regards to the William Street property, it was trying to sell the building and had received an offer of $105 million from Niido, a home-sharing service operated by NGD.
The International Council of Shopping Centers is requesting aid from the Trump administration amid a host of restaurants, retailers and entertainment operators shutting down. Although some companies might have third-party insurance, it does not cover the coronavirus pandemic.
Portions of Hudson Yards closed indefinitely to wait out the coronavirus outbreak. One eatery at the West Side campus will remain open: Spanish Diner at Mercado Little Spain, which will serve a limited takeout menu from noon to 5 p.m. daily.
Nordstrom is temporarily shutting its stores in the U.S. and Canada to prevent the spread of the coronavirus and pulled back its 2020 guidance and now faces a possible bankruptcy filing.
Georgetown Company has big plans for a waterfront site near Hudson Yards which it has owned for over 50 years. The company filed plans in 2008 to build a 66-story hotel on the lot, but these were not approved.
The City University of New York is looking to generate more money for academic programs by selling off some of its 300-building portfolio. The Facilities Planning and Management Committee on CUNY’s board of trustees unanimously approved a $750,000 contract with Real Estate Solutions Group to assess the value of all of its buildings.
The coronavirus pandemic has devastated an already weakened residential real estate sector in China. Smaller firms are taking the biggest hit.
The U.S. commercial real estate market is ripe for a meltdown, according to Carl Icahn.
The New York City Housing Authority is trying to make it easier for developers to buy up its 80 million square feet of unused air rights. The agency hopes to streamline the process and create a “citywide clearing house for evaluating the feasibility of incoming air rights proposals.”
Anbang Insurance Group’s pending deal to sell a $5.8 billion portfolio of 15 U.S. hotels to a South Korean money manager is in doubt. A group of lenders led by Goldman Sachs failed to receive enough investor interest for roughly $4 billion in commercial mortgage-backed securities to finance the deal..
Modell’s Sporting Goods has announced it will close all its 141 remaining stores after filing for bankruptcy.
RXR Realty is embarking on a $500 million renovation project that will turn a 1950s-era ocean liner into a hotel. Rechler, the company founder and CEO, is now shopping plans around New York, San Francisco and about six other cities to find a place to moor the finished product.
Chinese real estate billionaire Guo Wengui has relisted his massive pad at the Sherry-Netherland hotel. Wengui is now asking for $55 million for the 15-room home, a nearly 19% price cut from what he bought the home for in 2015.
New York City will offer businesses with fewer than 100 employees interest-free loans of up to $75,000, if they can demonstrate sales decreases of 25% or more. Very small businesses with fewer than five employees will be eligible for cash grants to cover 40% of payroll costs for two months.
The next skyscraper to rise in the Hudson Yards neighborhood will cost nearly $2.6 billion to develop when all’s said and done. Three Hudson Boulevard, which will stand 56 stories when completed, will have an all-in development cost of $2.58 billion.
The Coca-Cola building at 711 Fifth Avenue and Michael Shvo A partnership led by Michael Shvo has secured a $545 million loan to refinance the Coca-Cola building.
Madison International Realty closed on its latest private equity fund: a $1.2 billion vehicle aimed at properties in the United States, United Kingdom and Europe.
Condo sales launch at Waldorf Astoria. The residential towers sitting on top of the renovated hotel feature 375 condos and 50,000 square feet of private amenities, including a 25-meter pool, fitness center and several residents-only bars.
The 10 biggest retail leases made public totaled 114,000 square feet, down 14% from January’s total and 39% from the 10 largest in February 2019.
- Trader Joe’s signed a lease at 415 East 59th Street for 50,000 square feet. The landlord is New York City.
- Crunch Fitness signed a lease at 691 Fulton Street, Fort Greene, for 13,000 square feet The gym renewed the lease for its flagship location.
- Randolph Beer signed a lease at 25 Kent Avenue, Williamsburg, for 12,228 square feet. The brewpub signed a lease for its second location in Williamsburg.
- Telco Department Stores signed a lease at 1702 Kings Highway, Midwood, for 11,500 square feet. The department store inked a long-term deal.
- Taco Bell signed a lease at 707 Lexington Avenue for 6,615 square feet. The fast-food chain continues to expand across the city, signing another 15-year lease for its Taco Bell Cantina concept.
- DAXI Restaurant signed a lease at 417 Lafayette Street for 6,000 square feet. It is the restaurant's second city location.
- Hydra Studios signed a lease at 120 Wall Street for 4,220 square feet. The wellness chain signed a 10-year lease for a new flagship.
- The Strand signed a lease at 450 Columbus Avenue for 4,000 square feet. The famous bookstore inked a lease for space formerly occupied by Book Culture, which shut due to fraud allegations.
- Pure OBGYN signed a lease at 32 West 20th Street for 3,860 square feet.
- Ladybug Daycare signed a lease at 138 Union Street, Cobble Hill, for 2,800 square feet. The daycare center signed a 10-year lease for its fifth location.
Price cuts are in and developer Harry Macklowe is out at 200 East 59th Street, a troubled condo project. Macklowe sold his interest to Alpha Investment Partners, for an undisclosed amount. A revised price list for 14 of the building’s 67 units, filed with the attorney general’s office, shows an 18% overall drop from the original 2017 asking prices.
The de Blasio administration and Amtrak released a plan for 12,000 affordable housing units above Sunnyside Yard. The master plan calls for the decking over of 115 acres of active rail yard to accommodate construction of rent-stabilized homes offered through a program modeled after Mitchell-Lama. Six thousand apartments would be set aside for families earning less than 50% of the area median income.
The city has thrown its weight behind developers fighting to save their condominium tower from deconstruction. In an appeal filed, Mayor Bill de Blasio’s Law Department challenged a state judge’s ruling that revoked a permit issued for 200 Amsterdam Avenue.
WeWork has sold a facilities management company for nearly $200 million below what it paid less than a year ago. WeWork paid last April, a $220 million cash and stock deal that included $100 million in cash for the facilities firm.
Citadel Securities is doubling its existing 60,000 square foot sublease at 350 Park Avenue. Meanwhile Citadel Securities and Citadel are set to begin buildout at 425 Park Avenue for their 124,000-square-foot expansion of its 211,400-square-foot lease.
Top 10 office leases made public were 1.8 million square feet, down 23% from January’s total but up 80% from the 10 largest in February 2019.
- Whittle School & Studios signed a lease at 181 Livingston Street, Downtown Brooklyn, for 620,000 square feet.
- Amazon signed a lease at 66-26 Metropolitan Avenue, Glendale, for 300,000 square feet. Amazon takes over space from the Metropolitan Museum of Art, plus the remaining empty space in the building, bringing it to full occupancy. The landlord is Rentar Development.
- Apple signed a lease at 11 Penn Plaza for 220,000 square feet. Apple signed a 5-year lease.
- MDC Partners signed a lease at 1 World Trade Center for 199,277 square feet. The marketing company inked an 11-year lease in the building owned by the Port Authority of New York and New Jersey and the Durst Organization.
- Industrious signed a lease at 1 Penn Plaza for 100,000 square feet. The flexible-workspace company signed a deal for 80,000 square feet and 20,000 square feet of conference space. The landlord is Vornado Realty Trust.
- National Grid signed a lease at 2 Hanson Place, Downtown Brooklyn, for 87,000 square feet. The landlord is Brookfield Properties.
- INTL FCStone signed a lease at 230 Park Avenue for 73,000 square feet. The financial services firm consolidated its space at 155 East 44th Street and 530 Fifth Avenue.
- Marcum signed a lease at 730 Third Avenue for 70,728 square feet.
- Cine Magic signed a lease at 30-15 48th Avenue, Long Island City, for 61,000 square feet.
- Susquehanna International Group signed a lease at 140 Broadway for 52,412 square feet. The trading firm renewed its 15-year lease.
Construction tech startup Procore plans to go public, a move that could reportedly push the company’s value north of $4 billion.
125 Greenwich Street. Fortress Investment Group bought the mortgage for about $230 million from the investment firm BH3 which had been moving to foreclose on the under construction 88-story project. Fortress will have the right to continue the foreclosure lawsuit if it chooses. A group of lenders including United Overseas Bank filed to foreclose on the project last year, but BH3 ended up buying the loan for about $125 million in July.