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Weekly Market Report - January 13, 2021


Gov. Andrew Cuomo is pushing for legislation that will ban commercial evictions in New York State through May 1. Last month, the ban on evictions and foreclosures was extended through Jan. 31 from the previous deadline of Jan. 1, as more businesses in the city face closures and struggle with making rent payments. The announcement comes three weeks after he shut down indoor dining in the city as the number of Covid-19 cases began to rise late last year. This is Cuomo's sixth time extending the moratorium since the original 90-day moratorium he implemented on March 20 last year. He also signed new legislation last month protecting residential tenants from evictions and foreclosures until May 1 if tenants can show they've faced financial hardship due to the pandemic. ***

It’s been 10 months since most city office workers have been back in their buildings, and since thousands of chain stores and small businesses have shuttered due to the pandemic — and with the slow-rollout of the COVID-19 vaccine on top of an already devastating economic downturn, some experts say the financial impact on commercial real estate will likely continue well into next year, and beyond. More than 1,000 chain stores citywide have closed over the last year, according to a new report from the Center for an Urban Future. At the same time, the number of new construction filings last year was the lowest it has been in 10 years, the Real Estate Board of New York reported last month. The city and state also collectively lost $1.6 billion in tax revenue. A large chunk of those losses can be attributed to a 49% drop in investment sales and residential sales, according to another December report from the board. That downward trend will likely continue if New York doesn’t expedite the distribution of the COVID-19 vaccine, said national real estate appraiser Jonathan Miller, co-founder of the real estate appraisal firm Miller Samuel Inc.


New York Gov. Andrew Cuomo said the state would expand broadband internet access, create public health training for citizens and support the conversion of vacant commercial space into housing as the Empire State strives to overcome the coronavirus crisis that has taken a stunning economic toll. The Democratic governor laid out the agenda items during his annual State of the State address on Monday. Mr. Cuomo used war metaphors to describe the effects of the pandemic on the state, where the disease it has killed nearly 32,000 people. The governor will expand on his proposals in three additional online speeches this week, a state official said, focusing on infrastructure spending and developing clean energy.


A global investment firm has purchased a 99-year lease on an office building in Manhattan’s Meatpacking District for about $230 million in one of the few office-building deals in New York City since the pandemic hit. Meadow Partners, based in New York and London, closed late last year on its purchase of 860 Washington St., a 120,000-square-foot tower known for a Tesla Inc. showroom on its ground floor and office tenants that include Alibaba Group Holding Ltd. Thanks to the growing popularity of the trendy Meatpacking District, the building is almost fully leased at rents comparable to the top boutique buildings in Midtown Manhattan, according to participants in the deal.


Office landlords have fared better than shopping-mall owners during the pandemic so far. However, they may soon be competing with their own tenants as companies sublet space they no longer need. Asking rents for offices in global hubs like London and New York have been surprisingly stable in 2020, even as many employees continue to work from home. Manhattan rents fell 3% in the third quarter compared with the same period of 2019, while rates for the best locations in the U.K. capital are down by roughly the same amount according to a top brokerage firm. Scratch the surface though and these markets are becoming tougher for landlords. Few businesses will commit to a new lease until they understand how remote working will change their real estate needs, so competition for tenants is intensifying. Any company that is willing to sign a 10-year lease in London or New York could look at getting 2-3 three years of free rent.


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