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Weekly Market Report - December 19th, 2019

WeWork Update

· WeWork told employees not to delete or leak any information from their computers. If they do, there would be consequences

· Almost 4,000 employees are supposedly now going to be laid off

· WeWork is now being investigated by U.S Securities and Exchange Commission on allegations for approving a $42 million acquisitions for another office space startup called Spacious without doing its due diligence

· Bill Rudin, owner of Dock72, isn’t worried about WeWork’s situation, and he has no regrets

· Rudin says WeWork’s impact on NYC real estate is minimal, and they can absorb spaces if it goes bust

· WeWork supposedly overpaid $200 million for Lord & Taylor’s flagship location

· Steve Langman, a WeWork board member, had connections to the buyer, seller, and the tenant at that location; he recused himself from votes that had conflict of interest

· After Lord & Taylor decided they weren’t going to stay, WeWork was forced to take over the entire building to satisfy lenders

· WeWork’s investment arm missed two deadlines and paid $50 million to keep the seller from walking

· They agreed to $105/foot

· Rumors are starting that WeWork is getting ready to sell the building, but no one knows currently

On Monday, 20 Times Square filed for foreclosure. The 42-story hotel and retail tower were once valued at $2.4 billion but since the retail slump, the value has decreased. France’s Natixis SA Bank, the lenders who filed the motion, said 90% of the retail space has been sitting vacant. The firm who was in charge of the project, Maefield Development, has failed to put up the money for it after building the tower from 2015 to 2019. This foreclosure is the latest sign that online shopping is growing, and retail rents are continuing to rise. Times Square has the highest retail availability rate of the city’s major shopping areas with 31% of space was vacant, which is 22% up from last year. Brokers said the building is in a tough spot with limited street frontage. Lenders said Maefield “failed to clear mechanics’ liens and didn’t put enough money into a reserve account to cover construction expenses.”

Update on bill for “bird-friendly” glass

New York City’s council voted 43-3 on Tuesday to require “bird-friendly” glass in new buildings in hopes to cut down on the birds that die every year by flying into buildings. It will take effect one year after the bill becomes a law.


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