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Weekly Market Report - June 16, 2021


Wall Street’s return-to-office divide laid bare by Goldman, Citi

It’s a short stroll from Goldman Sachs Group Inc.’s global headquarters to Citigroup Inc.’s, but when it comes to reopening after the pandemic, the two Manhattan towers might as well be thousands of miles apart. Starting this morning, Goldman Sachs is requiring almost all employees at its perch over the Hudson River to report to their desks, marking one of Wall Street’s most ambitious returns to the workplace since Covid-19 besieged the city more than a year ago. Meanwhile, Citigroup won’t recall more of its staff to its mostly empty Tribeca tower in downtown Manhattan until July. Even then, the firm has told most workers that they can adopt a so-called hybrid schedule between home and the office longer term. Such divergences are popping up across Manhattan’s mighty financial industry, creating pockets of optimism within the city’s economy, but widespread anxiety inside workplaces. Bosses worry their teams will be less competitive if members are slow to come back. Parents fret about losing remote-work flexibility, but also that young, single colleagues and competitors may rush back sooner and soak up face time with executives or clients.


AmEx going hybrid, with most workers at home Mondays and Fridays

American Express is planning to allow its employees to work from home for at least part of the week on a permanent basis, as the finance industry continues to unveil plans to bring staff back to the office. Most employees in the U.S. and U.K. will ultimately work in the office Tuesday through Thursday and have the choice to work from home Mondays and Fridays, the credit-card giant said in a memo to staff. The firm said it will begin inviting more colleagues back Sept. 13, with plans to fully adopt its new hybrid schedule the week of Oct. 4. “We believe that being in the office together is an important part of what makes our culture special,” Chief Executive Steve Squeri said in the memo. “We also want to keep aspects of the virtual environment that have been working well for us, such as greater inclusivity across our global colleague base, increased work-life balance, an enhanced digital mindset and cutting through bureaucracy to get things done.” New York–based AmEx has nearly 64,000 employees worldwide. The firm’s announcement comes after Goldman Sachs asked its U.S. staff to begin returning to offices this week, marking the most ambitious return to the office among major Wall Street firms as the Covid-19 pandemic eases.


2021 already setting city records for life-science leasing

Life-science firms have already set a record in 2021 for the amount of space leased in New York City in a single year. Companies leased 257,000 square feet of lab space in the city through last month, according to a the most recent reports. The Icahn School of Medicine at Mount Sinai took 165,000 square feet of space at 787 11th Ave. That single deal was larger than all the life-science leases last year, when they spanned about 156,000 square feet overall, the report says. C16 Biosciences, a startup backed by Bill Gates, has taken 19,000 square feet at Silverstein Properties’ and Taconic Partners’ Hudson Research Center. And last Thursday, cancer medicine firm Black Diamond Therapeutics had inked an 18,120-square-foot lease at the Alexandria Center for Life Science on East 29th Street.


Covid-19 Rent Breaks for Retailers Are Becoming the New Norm

During the worst of the pandemic, many landlords offered deals where ailing retailers paid a percentage of their monthly sales in rent—rather than a fixed amount—to help them survive. Now, this once temporary way of charging tenants looks poised to outlast Covid-19. More shopping-center owners are signing new leases where rent is tied directly to a portion of sales, at least for a period. These percentage-rent leases are especially attractive to newer retailers, offering some flexibility so that they aren’t saddled with large losses as they are starting out. While most landlords tend to prefer the reliability of a fixed monthly rent payment, the wider use of percentage leases reflects how much retail has become a renters’ market. Fixed-rent agreements aren’t disappearing entirely. In most cases, percentage-rent agreements are limited to the first year or years of a lease, which would then revert to a fixed-rent model.

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