Good Retail, Surging Sales Market and Co-Living Making a Comeback
Apologies to the great Sammy Cahn and Jule Styne but we can’t take another of these snow storms.
Yes, those of us ensconced in our East Coast apartments have it better than any unfortunates in the great State of Texas whose names do not rhyme with the words “Led Ruse”; however, we have nevertheless had enough. Give us something to carry us through to spring.
How about this: Retail had a pretty damn good month.
“Hogwash!” you say. “Retail has been in a tailspin, and it’s the height of foolishness to pretend otherwise. You, Commercial Observers, are just a bunch of puffed-up liars. You’re no better than Ted Cruz.”
We take exception to that. According to data released from the U.S. Commerce Department last week, retail sales rose 5.3 percent nationwide in January. This comes after three months of consecutive decline and, while economists were expecting a small boost, this was well above what was anticipated.
Need further proof? After a collapse last year amid the pandemic, the retail great Century 21 announced that it was reopening stores in New York. “Never count out a New Yorker,” the retailer said in a statement. Amen!
Oh, and did we mention that Andrew Cuomo also upped the capacity for indoor dining from 25 percent to 35 percent?
There was another unmistakably sunny sign last week: Property sales surged in New York in January.
No joke. A report from the Real Estate Board of New York showed that investment and residential sales totaled some $6 billion, a 38 percent increase compared to January 2020, two months before the lockdowns started.
And, any week where Amazon announces that it’s come crawling back to Long Island City on its hands and knees is a good week. (Well, it’s a 20,000-square-foot delivery station, so no need to get too excited.)
Speaking of Amazon, New York Attorney General Letitia James announced the state was suing the e-commerce behemoth over unsafe COVID-19 conditions. (Which comes after Amazon preempted her lawsuit with a suit of their own.)
If we’re really looking at our report card …
A number of REITs had earnings calls last week and the message was sorta mixed.
Empire State Realty Trust announced that they had strong office leasing activity in the fourth quarter of 2020 during their earnings call. The REIT saw a total of 395,035 square feet of renewals, relocations and expansions. (Its biggest deal was the 212,154-square-foot lease with Centric Brands at the Empire State Building.) But this isn’t to say that ESRT (like others) isn’t smarting in the pandemic; chairman Tony Malkin said during the call that total revenues dropped from $731 million in 2019 to $609 million in 2020. However, he remained bullish that once vaccinations are rolled out businesses will want to be back.
Columbia Property Trust also had some good news to report for their fourth-quarter earnings: 95.6 percent occupancy and fourth-quarter net income of $101.7 million, compared with a $21.9 million loss in the final three months of 2019. However, Columbia is bracing for the fact that several prominent tenants are soon leaving (including Amazon Web Services, which is vacating a 90,000-square-foot space at Columbia’s East Palo Alto, Calif., property).
Cosplain that to me.
There were less-than-satisfactory reports about WeWork (if you’re WeWork); the coworking company announced that it was cutting rental fees by 10 percent across the U.S. (But, hey, very good for its customers!)
But one surprise from the whole “co” phenomenon is that co-living is not doing as badly as one might expect. It’s true a number of co-living companies have shuttered or pulled back since COVID-19 hit, but others are preparing for a surge.