*** Back to the Office in 2022
With last week’s news that booster shots reduce the severity of the Omicron variant and the success of Paxlovid, Pfizer’s new antiviral pill, it’s back to the office in 2022 for most of us. But are we again vulnerable to a host of diseases, plus many inconveniences we’ve long forgotten? After more than 20 months of the roll-out-of-bed commute, many have zero tolerance for traffic or wearing pants, let alone clean clothes. Normal life is going to take some adjustment. We work in offices because we need to look people in the eye and gauge their sincerity or conviction. We go to meetings because body language often communicates better than words. We visit clients and build rapport to close deals—always be closing. We put up with oddball co-workers because we crave camaraderie.
We all miss and crave human contact: in-person work, picnics, cocktail parties, concerts, bars with sticky floors, overcrowded restaurants, even rubber-chicken conference meals. Humans are social. We build up immunity to all the bad stuff so we can soak up the best of other people, even the annoying ones. Being social is what makes us who we are. It’s time to get back to it.
*** Rudin’s 3 Times Square inks massive lease with university
The Rudin family’s 3 Times Square will be the future home of Touro College and University System, the New York Post reported. The university signed a long-term lease for 243,305 square feet at the 30-story office building, which includes its own entrance at the corner of Seventh Avenue and West 43rd Street. Seven of its schools will move to the third through ninth floors of the 885,000-square-foot building, as well as parts of the ground and second floors. The school will build a library, classrooms, laboratories and event spaces to fill those floors, in addition to lounges, cafes and other amenities. The office building was built in 2001 as the North American headquarters of Reuters Group.
Pandemic Turns Florida’s West Palm Beach Into Office Boomtown
An influx of financial firms from New York and other locations is fueling an office-leasing boom and new development in West Palm Beach, Fla. Related Cos. said Tuesday that it plans to build two office properties in the city with a price tag of about $750 million. The two projects and two other Related developments are set to increase the total office space in the city’s central business district by more than 50% to 4.3 million square feet, from 2.8 million square feet last year, according to data. With many companies’ offices closed for months, many finance professionals moved to South Florida to work remotely. Goldman Sachs Group Inc. and investment firm Elliott Management Corp. have signed leases at a recently completed Related development in West Palm Beach.
Gopal Rajegowda, a partner at Related, said that 75% of the West Palm Beach office space it leased out over the past 18 months went to companies new to the city. Related is also developing a 25-story office tower designed by David Childs, and it bought three West Palm Beach office properties. The firm would control close to 4 million square feet of real estate—including nearly 2.5 million square feet of office space—in West Palm Beach once the two latest projects are completed.
REITs Romped in 2021 as Property Values Soared
Investors who are planning to double down on this year’s REIT strategy might want to hold off for now on buying Dom Pérignon by the case, some analysts warn. For starters, REIT strength this year was partly a rebound after a bad 2020. With office, retail and other property types hammered by the pandemic, the sector fell 8% last year compared with an increase of 28% for the S&P 500, Green Street said. REIT shares, like those of numerous other companies, also could face a bumpy ride in 2022 from inflation and rising interest rates.
A few property types have continued to thrive throughout the pandemic. For example, total returns of industrial REITs have been over 40% since the pandemic hit because of the rise in online retail sales, according to analysts. Total returns of self-storage landlords have increased more than 80% during that same timeframe as people working from home have decluttered, analysts said. The rise in inflation, so far, has been good for REITs because it has helped drive up mergers and acquisitions volume, as well as sales volume and values of individual properties. Many investors consider real estate an inflation hedge because owners can raise rents to stay ahead or at least keep pace with rising prices.
Multifamily market refis lead biggest outer-borough loans
New York City rents have staged a major comeback, returning the city to its status as the nation’s priciest housing market and upping the value of its residential properties. Lenders, it seems, have taken notice. Big rental complexes drew the biggest loans last month, as debt on thousands of residential units were refinanced. The 10 largest loans in the outer boroughs totaled $749 million in November, well below the $1.3 billion from the top 10 last month and in November 2020. Brooklyn led the way last month with six of the biggest property loans. Projects in Queens secured three top loans while the Bronx had one.