Real Estate News, Information, Data and Insights for New York City Real Estate
Shane’s Rib Shack closed earlier this year at 673 Ninth Avenue. The for lease sign has recently come down so perhaps the space has been leased. This space has changed hands frequently in the past five years or so.
For Manhattan, the Elliman Report concludes that “While new signed contracts increased year over year for the first time in a year and a half, new listings increased for the first time in sixteen months. All property types saw significant annual gains in newly signed contracts above the $1 million threshold.”
Full report and other real estate information can be found at Elliman.com.
November 01, 2023
For release at 2:00 p.m. EDT
Recent indicators suggest that economic activity expanded at a strong pace in the third quarter. Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation remains elevated.
The U.S. banking system is sound and resilient. Tighter financial and credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. The Committee will continue to assess additional information and its implications for monetary policy. In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lisa D. Cook; Austan D. Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Adriana D. Kugler; Lorie K. Logan; and Christopher J. Waller.
From FederalReserve.gov
By Lois Weiss, NY Post, Published Oct. 27, 2023, 8:57 a.m. ET
Not only has the retail apocalypse caused by the pandemic passed, Manhattan has rebounded so fast that prime locations are becoming hard to find.
“Retail is on fire,” said Eric Le Goff of Retail by Mona. “From Meatpacking to Williamsburg, all these areas are on fire.”
In recent years, rents on upper Madison Avenue between 59th Street and 86th Street had fallen into the $600s per foot. Now, a bevy of 75 transactions have pushed rents back toward $1,000 per foot.
The most recent lease was with Dolce & Gabbana which snagged a 23,338-square-foot former Hermès women’s store at 693 Madison Ave. after the other retailer moved down the block to the larger 706 Madison Ave. last year.
Additionally, Sotheby’s will take over the former Whitney Museum in the Breuer building at 945 Madison, adding new life to that stretch.
“There is a reduced amount of inventory,” said Matthew Krell of Alvarez & Marsal Property Advisor
Both Madison and Fifth avenues are going through many store changes
The opening of Tiffany & Co.’s redevelopment will allow its sister LVMH brand, Louis Vuitton, to move into the former Nike space to its east that Tiffany had occupied during its renovation.
Louis Vuitton will develop a new tower at 1 E. 57th St. and engulf 743 Fifth Ave., now occupied by brand cousin Hublot, sending it into the market to seek a new spot.
Gucci has renewed its large store on the Fifth Avenue base of Trump Tower. Swarovski is opening soon at 680 Fifth. Rolex is building its own tower at 665 Fifth Ave., while Marc Jacobs will take over the former Armani X on the north corner of East 51 Street at 645 Fifth Ave.
The area closer to 42nd Street is lagging, however, due to numerous big-box storefronts.
One problem for the entire retail market is that it takes so long to get deals done.
“You may have an agreed-upon term sheet, but you are not getting someone swinging hammers for a year,” said Matthew Chmielecki of CBRE. “The least scientific way to measure a market is to count empty storefronts.”
For instance, a new 10,000-square-foot deal in the base of the Virgin Hotel will bring Electric Shuffleboard to the city next spring.
John Few, of SRS Real Estate Partners, represented the concept.
“It has a very well-thought-out food and beverage program and will be good for dates and corporate events,” said Adam Weinblatt of Newmark who, along with Richard Tang of the Lam Group, represented the hotel, which has already scored a winner with Swingers minigolf.
In Noho, the 32,400-square-foot former Showfields space on Lafayette Street is up for grabs with Retail by Mona. Its asking rent is $3.5 million.
Across Lafayette, hip sneaker company Kith expanded into a big footprint.
“It’s madness with tons of people,” said Brandon Singer of Retail by Mona. “It’s like an upscale Times Square as it’s slammed and they’re not just looking, but shopping.”
On Broadway and on other Soho streets, many shops are preparing for their openings next spring while Meatpacking continues to see commitments by both luxury automakers and luxury retailers.
Saint Laurent, for instance, signed a 13,000-square-foot lease at 70 Gansevoort St., part of the Aurora Capital Associates and William Gottlieb Real Estate street revival.
“It’s full of energy and that neighborhood has transformed over the last five years,” said Adam Henick of Current Real Estate. “Gansevoort Row is beautiful with busy restaurants and popular retailers.” However, Times Square is still suffering despite lots of foot traffic.
“Not only have some of the large boxes sat vacant because it’s hard to find the right user, but the challenges the city has undergone the last few years have not helped,” said Henick.
The 245,000-square-foot retail in the base of the former New York Times building is in receivership, although the huge Bowlmor on West 44th St. is open, as is Los Tacos No. 1.
“Larger tenants are looking at it,” said Chmielecki, the agent for the block. “It’s hard to overstate the excitement in the retail market.”
This article appeared in the NY Post.
The construction landscape in New York is slowing, with fewer construction starts taking place in 2023 compared with recent years.
This year, developers already have completed 8.3 million square feet across the first three quarters and are on pace to finish less than 10 million square feet, considering construction starts have declined in the past two quarters.
The projected year-end total is a notable drop, compared with the nearly 16 million built in 2022, and the 11 million built in both 2021 and 202
Adrian Ponsen, CoStar’s national director of industrial analytics, said the root cause of the slowdown is “the series of interest rate increases initiated by the Federal Reserve in early 2022, which has helped curtail the record wave of new distribution center development that was underway. Throughout the summer of 2023, industrial tenant demand softened and the pullback in groundbreakings grew more extreme.”
The slowdown in construction starts is occurring as completions are rising. About 11.7 million square feet has been completed so far in 2023. This figure is forecast to rise to nearly 17 million square feet by year’s end.
The completion of these newer industrial properties has played a part in the rise in industrial availability, as supply outpaced demand, with leasing activity underwhelming over the past 12 months. The availability rate in New York stands at 8.2%, a notable increase from the 5.7% measured at the start of 2022. The relative slowdown in leasing demand, the completion of more than 18 million square feet of new industrial space since 2022, and the negative 2.8 million square feet of annual negative absorption — or change in occupancy over a given period of time — driven by home goods retailers vacating distribution centers have been the main causes behind the rise in availability.
About 19.1 million square feet of industrial space is still under construction, which is a figure not far from the high of 22.6 million square feet during last year’s third quarter. This bevy of future supply is the driving force behind the continued vacancy increase forecast over the next 12 months. However, if the rate of new construction starts were to continue moderating, vacancy levels may begin tightening again by 2025 once the bulk of new buildings now under construction have been completed.
From Euronews:
The US state promised the first retail licenses to previously convicted marijuana sellers. In most cases, it didn’t happen.
Only about two dozen marijuana dispensaries formerly convicted by New York authorities have opened their doors since legal recreational cannabis sales were launched in the state in December last year.
Officials promised many of the first retail licences to sellers with past drug convictions, hoping to give them a chance to succeed before competitors crowded in.
However, legal challenges over the state’s permitting process have left more than 400 provisional licensees in limbo. Marijuana farmers are also staggering because there are too few stores to sell their harvest.
Amid these troubles, New York regulators are now expanding the market. They recently opened up a 60-day general application window to grow, process, distribute or sell marijuana, expecting to issue more than 1,000 new licenses.
The move should boost the number of legal dispensaries in a market now dominated by illegal sellers who simply opened retail stores without permission.
New rules also will allow companies licensed to grow and sell medical marijuana in the state to get into the recreational market.
But the prospect of competing with medical providers worries some farmers and retailers who fear being squashed by deeper-pocketed companies.
“My concern is that they have all the money to bleed us out,” said Coss Marte, who is opening a dispensary in Manhattan next week, after it was pushed back by a lawsuit against New York regulators.
“They’re vertically integrated. So, they could grow their own product at the cheapest price and basically outbid all the farmers, all our products and all our pricing,” he added.
CONBUD, Marte’s shop, was among those temporarily blocked by a judge from opening after a group sued on behalf of disabled veterans, saying they were wrongly excluded from applying for a licence. So Marte, who has a past drug arrest, was left paying rent on a store he could not open.
A judge recently ruled that CONBUD and several other shops could open. But they didn’t all get the same luck.
Like many other provisional licence holders, after months of delays in opening his store, Carson Grant was debating whether to reapply for a licence again in this 60-day general round. “It’s very difficult,” he said.
Reginald Fluellen, senior consultant to the Cannabis Social Equity Coalition, accused the state of a botched rollout.
“They’ve failed miserably in providing the justice-involved individuals the kind of head start in the market that they promised,” Fluellen said.
To guard against monopolies, the medical providers will be limited to three retail outlets. And in a nod to farmers, their shops will initially have to devote half their shelf space to products grown and processed by independent businesses.
Still, critics say regulators should have allowed more time for economically and socially diverse entrepreneurs to succeed before letting in larger competitors.
Office of Cannabis Management executive director Chris Alexander said the new regulations maintain New York’s commitment to social and economic equity, while making the market more competitive.
Alexander acknowledged there was some “frustration” in getting retail stores open, but added that the state has shown that a market supplied by small farmers can work.
“We’ve got some of the top-performing dispensaries in the country right here in New York,” he said.
And there’s still room to grow. Regulators have estimated New York will eventually require at least 2,000 dispensaries to meet demand.
The US Fed expects interest rates to fall only half a percentage point in 2024, lower than market expectations.
Federal Reserve Chairman Jerome Powell arrives for a House Financial Services Committee hearing in Washington DC, US. The US Fed has ‘dialled up its expectations’ for a soft landing of the economy despite higher interest rates for longer [File: Andrew Harnik/AP Photo [Andrew Harnik/AP Photo]
The United States Federal Reserve held interest rates steady on Wednesday but stiffened its hawkish stance, with another rate increase projected by the end of the year and monetary policy kept significantly tighter through 2024 than previously expected.
As they did in June, Fed policymakers at the median still see the central bank’s benchmark overnight interest rate peaking this year in the 5.5 percent to 5.75 percent range, just a quarter of a percentage point above the current range.
But from there the Fed’s updated quarterly projections show rates falling only half a percentage point in 2024 compared with the full percentage point of cuts anticipated at the meeting in June.
With the federal funds rate falling to 5.1 percent by the end of 2024 and 3.9 percent by the end of 2025, the central bank’s main measure of inflation is projected to drop to 3.3 percent by the end of this year, to 2.5 percent next year and to 2.2 percent by the end of 2025.
The Fed expects to get inflation back to its 2 percent target in 2026, which is a later date than some officials had thought possible.
“Inflation remains elevated,” the rate-setting Federal Open Market Committee (FOMC) said in a policy statement that included projections incorporating stronger economic and job growth than prior forecasts, and keeping prospects for a “soft landing” squarely in view.
Financial markets had widely expected that the Fed would leave rates unchanged. But investors have also been banking on significant Fed rate cuts next year, an expectation clouded by the projections showing 10 of 19 officials see the policy rate remaining above 5 percent through next year.
After the release of the statement and projections, bond yields moved higher in the face of a higher-for-longer monetary policy stance, with the two-year Treasury note rising to its highest level since 2007. Stocks initially weakened while the dollar erased its losses for the day against a basket of major currencies.
Economic growth
The new projections include a substantial markup of projections for economic growth: After expecting growth as weak as 0.4 percent for this year in earlier projections, the Fed now sees the economy growing 2.1 percent in 2023.
The unemployment rate is also seen remaining steady at about 3.8 percent this year and rising to just 4.1 percent by year’s end – a vote of confidence in the possibility of containing the worst breakout of inflation since the 1980s without significant job losses.
But the projections also threaten companies and households with the possibility of even tighter credit conditions and higher borrowing costs than they have already absorbed during the Fed’s aggressive two-year battle to contain inflation, embodying a philosophy of “higher for longer” into the latest projections.
In the wake of the Fed statement, economists saw central bank officials as more confident they will be able to quash inflation without causing broader economic pain.
“The message conveyed in their upward revision to growth and their downward revision to the unemployment rate in 2024 clearly indicate a Fed that has dialled up their expectation for a soft landing, despite higher for longer rates,” said Olu Sonola, head of US economics at Fitch Ratings.
The Fed’s forecasts caught some observers off-guard, especially in the new view of a slower-than-thought decline in inflation pressures. Omair Sharif of forecasting firm Inflation Insights said that given the Fed outlook it was not surprising to see a hawkish shift in the monetary policy outlook, while adding that when it comes to officials’ outlook, “it’s oddly optimistic on the labour market and equally oddly pessimistic on core inflation this year.”
The Fed statement was approved unanimously after a two-day meeting that marked new Fed Governor Adriana Kugler’s debut on the central bank policymaking stage.
SOURCE: REUTERS
By Post Editorial Board
Published Sep. 6, 2023, 7:26 p.m. ET
As New York’s legal-cannabis rollout continues to stumble, it grows ever more obvious that the decision-makers were all far more focused on scoring symbolic points than on silly things like actually making it work.
The companies already OK’d to sell medical marijuana could have led the way to broader pot sales; instead, they got shut out.
Rather than pursuing its legislated mandate to develop licensing, regulations and guidelines for the sale of legal weed products, the state’s Office of Cannabis Management focused on a social-equity agenda by prioritizing applicants who had prior drug convictions.
Medical-MJ firms — who were the first in the state authorized to peddle any cannabis — just slammed the Hochul administration for blocking them from selling to all adult consumers.
“OCM has ignored the collective wisdom of every other state with an adult-use cannabis program — most recently Maryland — to permit existing medical operators to stand up the adult-use market,” the companies wrote in an Aug. 31 letter to Gov. Kathy Hochul.
Of course, the gov’s brain trust at OCM also shut out the veterans that the law also directed them to prioritize for licenses; that’s led to a lawsuit that has all licensing on hold.
Meanwhile, OCM’s slow start in licensing anyone at all has led to just 23 licensed dispensaries open across the whole Empire State.
The latest report released by the Bureau of Labor Statistics (BLS) showed that the U.S. labor market added 187,000 jobs in August 2023. Despite this steady pace of hiring, the unemployment rate jumped 0.3 percentage points to 3.8%, marking its highest level since February 2022.
The headline number of 187,000 additional jobs in August represents an uptick from the downwardly-revised 105,000 and 157,000 positions added in June and July, respectively. However, August jobs growth still marks a continued cooldown from the average monthly gains of 271,000 jobs reported over the prior 12 months.
While the unemployment rate rose to an 18-month high in August, the 3.8% level remains relatively low by historical standards. The jump in unemployment also came amid an increase in job seekers, as the civilian labor force grew by 736,000 during the month.
“The whisper number, or unofficial forecast, for August payrolls was weaker than the 187K gain we got, so that is encouraging. While some might be concerned about the uptick in the unemployment rate from 3.5% to 3.8%, it looks like it is mostly driven by an increase in the labor force as opposed to a jump in those unemployed,” remarked Shawn Snyder, Executive Director, Global Investment Strategist for J.P. Morgan. The BLS counts only those who are actively looking for work in its unemployment calculation, so the number of workers entering or rejoining the job market contributed to the uptick in the unemployment rate.
Although the persistent level of hiring suggests that the labor market remains resilient, the BLS also reported a more moderate pace of wage growth in August, which could indicate a reprieve in inflationary pressures. Average hourly earnings for all employees rose 0.2% in August, compared with a bump of 0.4% reported in July. This caused the year-over-year (YoY) wage increase to dip to 4.3% from the level of 4.4% recorded in the previous month.
Jobs growth in the construction industry trended higher in August, with gains of 22,000 slightly higher than the average monthly additions of 17,000 over the prior 12 months. Employment in social assistance saw similar results, with August’s increase of 26,000 topping the monthly average of 22,000 jobs added over the previous year. Healthcare posted strong gains, adding 71,000 positions in August. Despite monthly gains of 40,000 in leisure and hospitality, employment in the industry remains 1.7% below the pre-pandemic level of reported in February 2020.
Weakness in the labor market was concentrated in the transportation and warehousing industry, which shed 34,000 jobs in August. These declines stem primarily from the closure of a key trucking business.
The addition of 187,000 jobs in August speaks to persistent strength in the labor market, even as the pace of hiring continues to cool from the accelerated levels of 271,000 over the prior 12 months.
The uptick in unemployment may not be the most welcome news for those seeking jobs or monitoring the labor market. However, the labor force participation rate – the percentage of people who are either employed or seeking a job – rose 0.2 percentage points in August after remaining flat over the prior two months. At 62.8%, labor force participation has reached its highest level since the sharp declines witnessed at the onset of the pandemic.
In addition to the previously mentioned trucking shutdown, the ongoing strikes by actors and writers in Hollywood may have dampened jobs growth in August.
According to a CNBC report, the Gulf state of Qatar signed an agreement to purchase the Plaza Hotel in New York for about $600 million through the state-owned Katara Holding.
Katara will assume full control of the hotel while Sahara India Pariwar will retain a 75 percent interest.
The purchase was made just a few days after Sahara India Pariwar chairman Subrata Roy and Sahara’s U.S. division were sued by United Capital Real Estate Development, alleging they broke a contract by looking for other purchasers for the Plaza Hotel, according to Arabian Business.
In a case submitted on June 22 to a state court in New York, United also claimed that Roy and Sahara U.S. had deceitfully persuaded United to sign contracts, produce financial documentation, and put money in escrow. In addition to interest and legal fees, United is requesting $1 billion in damages for the claims.
Additionally, according to the group’s complaint, United consented to buy Sahara’s 85% ownership of the Dream Downtown hotel in New York. On behalf of his company, Roy signed two contracts for these sales on February 19 and February 27, 2018.
This lawsuit was filed in response to a May 2018 complaint filed by Ashkenazy Acquisition and Kingdom Holding, alleging that their agreement to match an offer had been broken. They accepted a bid of $600 million for a purchase deal that was supposed to close on June 25th, matching the offer made by a company led by Shahal Khan. The president of Sahara U.S., Sandeep Wadhwa, planned to respond in court, stating that he did not agree with Ashkenazy and Kingdom Holding’s assertions. The group hasn’t yet submitted that response, though.
The Plaza Hotel has had multiple owners in the past, including the president of the United States, Donald Trump. When he declared bankruptcy more than 20 years ago, Trump sold the hotel. During its tenure, the Plaza’s majority was turned into condominiums by the Israel-based Elad Group. The property is now managed by AccorHotels under the Fairmont Hotels & Resorts brand.