News.

Weekly Market Report - January 10, 2022

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Citigroup to fire unvaccinated U.S. staff this month


Citigroup Inc staff in the United States who have not been vaccinated against Covid-19 by Jan. 14 will be placed on unpaid leave and fired at the end of the month unless they are granted an exemption, according to a company memo seen by Reuters on Friday. The U.S. bank announced its plan to impose new vaccination rules in October and now becomes the first major Wall Street institution to follow through with a strict vaccine mandate. Its move comes as the financial industry grapples with how to bring workers back to offices safely and get back to business as usual at a time when the highly infectious Omicron coronavirus variant is spreading like wildfire.


While Citigroup is the first Wall Street bank to enforce a vaccine mandate, a handful of other major U.S. companies have introduced “no-jab, no-job” policies, including Google and United Airlines, with varying degrees of stringency. More than 90% of Citigroup employees have complied with the mandate so far and that figure is rising rapidly, according to a source familiar with the matter, adding that the timing of the vaccination mandate would be different for branch staff. When it announced its policy, Citigroup also said it would assess exemptions on religious or medical grounds, or any other accommodation by state or local law, on a case-by-case basis.


The bank said then it was complying with the policy of U.S. President Joe Biden’s administration required all workers supporting government contracts to be fully vaccinated, as the government was a “large and important” client.


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Surging Covid-19 Puts an End to Projected Return-to-Office Dates

Companies across the U.S. said they were returning to the workplace in September, only to put off those plans when the spread of the Delta variant accelerated. Many of those same firms were poised to dust off their office desks in January. Now major banks, technology companies and other firms have scrapped those plans thanks to the Omicron variant, and a sense that Covid-19 is going to linger longer than most first imagined. The postponements have unnerved office landlords and small businesses that are being stretched thin by a dearth of demand in office districts. An average of only 28% of the workforce last week returned to the office in the 10 major cities monitored by Kastle Systems, a nationwide security company that monitors access-card swipes.


Some businesses also are working on strategies that would base office returns on the needs of specific groups, these executives say. Under this system, managers would ask employees who are working on a sales or marketing presentation to gather in offices to collaborate, and then return to mostly working at home when it is finished. The decision by companies to give up on the idea of companywide return dates amounts to more bad news for office landlords, because the change will likely prolong the length of time that people work from home.


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Omicron Pushes Wall Street Toward Work-From-Home Future


Since the Omicron variant emerged, banks have hit the brakes on bringing workers back to the office. JPMorgan Chase & Co., Morgan Stanley, Goldman Sachs Group Inc., Wells Fargo & Co. and Jefferies Financial Group Inc. have told employees they can start 2022 at home, at least for a few weeks. Many of their employees have grown used to more flexible working arrangements and aren’t willing to go back into the office full time. How their return-to-work experiment plays out could set the stage for other white-collar industries.


Wall Street firms, particularly JPMorgan and Goldman, were aggressive last year about bringing workers back to the office, with JPMorgan Chief Executive Jamie Dimon and Goldman CEO David Solomon arguing that it was the best way to maintain culture and train new workers. Many employees, including traders and high-level executives, have worked from the office regularly throughout the pandemic. But the banks are confronting the reality of a tight labor market and emboldened employees. Managers tasked with making sure employees are in the office are reluctant to go through the logistical trouble of firing and replacing hordes of workers.


Companies such as Citigroup Inc. that have more flexible work-from-home policies are touting them as a way of attracting people from other banks.


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Signature Bank doubles down on ESRT’s 1400 Broadway


Signature Bank is expanding by more than 168,000 square feet at 1400 Broadway, ESRT announced. The company already leased nearly 112,000 square feet, bringing its total to more than 280,000 square feet across 10 of the building’s 37 floors. The asking rent was $67 per square foot and that the lease term is for 15 years, according to the Commercial Observer. In November 2018, the company added approximately 21,000 square feet to its footprint. That deal came months after inking a 15-year lease for more than 91,000 square feet across three floors. Asking rents at the time were between $64 and $67 per square foot.For ESRT, the good news at 1400 Broadway doesn’t end with Signature Bank. According to the Observer, French skincare company Clarins recently leased an entire 15,000-square-foot floor and will relocate from One Park Avenue.


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Michael Shvo’s Big Bet on Offices and Retail Faces Pandemic Test

Michael Shvo, The residential-broker-turned-commercial-developer and his backers acquired six major office and retail buildings in 2019 and 2020. The shopping spree included San Francisco’s famous Transamerica Pyramid tower and 711 Fifth Ave. in Manhattan, which is known as the Coca-Cola building. With a price tag of more than $2 billion, it was a big bet on the primacy of city-center office buildings well into the future. Mr. Shvo said these iconic properties would stand the test of time.


“These are 30-year investments,” he told The Wall Street Journal in early 2020. Mr. Shvo and his partners are opening their checkbooks to keep up with newer buildings. He said they are moving ahead with a plan to spend $100 million over the next 18 months on “repositioning and upgrading” the Transamerica Pyramid, where many leases are maturing in the next five years. Mr. Shvo said he has leased 100,000 square feet at the Transamerica Pyramid. He said one of the new tenants is the members-only Core Club; he declined to name other businesses that have signed new leases there. He said he has also signed a lease with the Core Club in New York.