Major Developments:
Life sciences leasing in New York leased 257,000 square feet, far above the 156,000 square feet rented in all of 2020. The city will throw at least another $500 million into life sciences development, bringing total investment up to $1 billion and signaling more expansion to come.A group of banks led by Wells Fargo and Goldman Sachs provided $3 billion in refinancing for SL Green’s One Vanderbilt. SL Green Realty Corp, the National Pension Service of Korea and Hines Interests own the 67-story skyscraper. The refinancing will pay off $1.75 billion in construction debt on the property.
Zeta Charter Schools has signed a long-term lease and is set to open for the 2023-24 school year at 400 West 219th Street. Bolivar Development will construct an eight-story building. Bolivar’s Peter Fine acquired the site for $16 million.
Hotels across the city are reopening, though travelers are coming back slowly. The city’s tourism agency, NYC & Company, is working on a $30 million advertising campaign to woo tourists back. It hopes to draw 10 million visitors this summer.
New York’s foreclosure moratorium on commercial properties, which runs through Aug. 31, has stopped a wave of hotel and other building and unit foreclosures. There have been some UCC foreclosures and a number of owners have walked away from their properties. New York’s hotel stock has seen several distressed properties trade hands and hundreds of others close.
The slow return to work is weighing heavily on business districts in major cities, where in addition to office landlords, retailers and restaurants rely on corporate workers for business. It is unclear when, if ever, things will return to pre-pandemic levels. Despite a push by large companies to reopen, employees prefer to continue working from home at least on a hybrid basis.
Throughout the pandemic, landlords and real estate trade groups have filed lawsuits seeking to end the federal eviction ban. So far, none has succeeded. Now, with the moratorium set to end on June 30, property owners are asking the Biden administration not to issue another extension.
New York office landlords can rejoice but not too much. Employers project 62% of workers will come back to Manhattan offices in September. That’s up 47% from projections made in March. Most of these workers will only be coming back three days a week. And as of the end of May, 12% of Manhattan employees had returned to the workplace.
Many companies are opting for a hybrid work schedule, where employees will come into the office a few days and work from home the other days. These hybrid schedules are resulting in some companies ditching their office space. Manhattan’s office availability rate hit an all-time high of 17.1% in May.
