Sunday Summary: COVID Hits Miami Cryptocurrency Conference
Part of the emergence of Miami as a more and more realistic alternative to New York for businesses has been (at least, in part) driven by the politics of COVID.
Florida Gov. Ron DeSantis was one of the first governors to suspend all COVID restrictions in the state, has cheerfully ripped the Center for Disease Control and Prevention, and is currently locked in battle with Norwegian and Carnival cruise lines for requiring vaccine passports of passengers. This was always a political bet on DeSantis’ part; he suspected that openings would become safer, that most people would welcome this, and that Florida would likely reap the benefits of this looser posture.
Until a few days ago, it was looking like a shrewd wager. Every week, a new tenant announced that they were picking up from, say, Boston and moving to South Florida, or a big tech conference was ditching plans to open in L.A. and heading for Mana Wynwood instead.
That is, until last week’s big 12,000-person cryptocurrency conference (billed as the biggest in Miami since COVID struck) turned into a potential super-spreader event.
There was no mask mandate at the conference and no proof of vaccination required … which, as it turns out, could lead to quite a number of cases of COVID.
There is no word yet on how many people have been infected, but attendees are reporting on Twitter at least dozens of positive tests, along with plenty of photos of people crammed together at Mana Wynwood maskless.
If not for that, it would have been a pretty stellar week for Miami. Commercial Observer learned that Wix, the web developer, was doubling its footprint to 50,000 to 60,000 square feet. Also, the Atlanta-based Cortland plunked down $70 million to buy an apartment complex in Deerfield Beach. A prime 1-acre site, which had originally been intended to be the mixed-use project Triptych Miami, situated perfectly between Wynwood and the Design District, hit the market after its previous owners declared bankruptcy. And Moishe Mana (of Mana Wynwood fame) purchased two retail and office buildings for $27.2 million, which will be part of an assemblage that he plans to convert into a tech campus and cultural hub.
Actually, it was a stellar week everywhere!
It was not so very long ago that we considered the billion-dollar-plus refinance having gone the way of the dodo bird — something the figures of yore talked about in some long, long ago past…
But, this week, Blackstone landed a $1.63 billion refinancing of its industrial portfolio! (Speaking of Blackstone, CO sat down with their mortgage trust’s new CEO Katie Keenan, if you’re looking for a longer dive into their thinking and personalities.)
Likewise, there were mastodon-sized leases, which reminded us of the legendary era of 2019.
In L.A., one of the biggest of the bigs, Hulu, signed a 351,000-square-foot lease with Boston Properties at Colorado Center.
Even bigger, in terms of square feet, was in Brandywine, Md., where XPO Logistics signed a 400,000-square-foot industrial lease with Link Logistics Real Estate.
And, in the center of Manhattan, SL Green signed 124,000 square feet worth of leases at One Vanderbilt with a mystery tenant, TD Securities, and InTandem Capital Partners and Sagewind Capital. (Oh, and in case you’re hungry, it sounds like Daniel Boulud’s newly opened Le Pavillon at One Vanderbilt is a real winner. But if the $125 prix fixe is too much, there’s always the legendary bagel hawker, Kossar’s, which announced it was opening a second location in Chelsea.)
Beyond leases, Mayor de Blasio announced on Wednesday another half-billion dollars in investment in the life science sector through the LifeSci NYC initiative.
Oh, and there were also sales in Gotham. Andrew Chung shelled out $102.5 million on an industrial site in the Hunts Point section of the Bronx currently occupied by the New York Expo Center.
The ground is looking so good that a lot of private equity cash that had been parked on the sidelines throughout the pandemic is starting to wonder if the time is ripe to jump in the game.
Well, it’s not stellar everywhere
Despite the recent surge in AMC stock, it’s not like the movie theater business is out of the woods any time soon. Attendance at the three major chains is only about 60 percent of what it was in 2019 at the theaters that are open.
Likewise, while coworking and flex office might have stopped the bleeding, it’s also got a long, tough slog ahead. Last week, Mark Dixon, CEO of IWG, said it would take a “miracle” for Dixon’s competitor WeWork to become profitable. (Meanwhile, his company lost more than $879 million last year, so maybe he never heard the expression about people who live in glass houses.)
And, in the whole work-from-home vs. work-from-office battle, the latter absorbed a dreary statistic that Manhattan business owners are anticipating only 62 percent of their workforce returning to the office post-Labor Day.
One sees the problems still facing hospitality, too: Katara Hospitality scooped up the ground lease for the Dream Downtown hotel after Sahara India Pariwar defaulted on its $80 million loan to Katara.
For some Sunday distraction
Did you know that off-campus student housing could be more profitable than malls, hotels or offices?
Well, it’s not like those other assets have been having a particularly great year. But CO revealed this week that net operating income at off-campus housing is expected to grow 2 percent by 2025, which is roughly the same as self-storage or senior housing, considered the very safest of assets.
For a longer discussion, check out our feature in this week’s CO.
See you next week!