Sunday Summary: Roe v. Wade Is Officially Overturned

In a followup story, CO spoke to site-selection experts who said the pending decision would have bad repercussions for red states trying to entice new businesses.

“Between developers and major real estate brokers in Texas, nobody’s excited about abortion becoming illegal,” said John Boyd, principal of The Boyd Company, a national site-selection firm. “There’s a concern from states in the Sun Belt that have been so successful that you can’t take the economic development success for granted. There’s legitimate concerns that this could eliminate a Texas city or put a rival location over the top.”

On Friday, various New York officials began speaking out about the decision. “This decision attacks what has been a fundamental right for Americans for the last half-century and profoundly reverses so much progress that has been made for health and economic equity,” said New York Senate Deputy Leader Michael Giannaris. “New York State will act, and I am pleased our Senate majority has already codified Roe. We will continue to seek ways to expand access to reproductive health care for everyone.” Some businesses have already said that they’ll pay out-of-state travel expenses for employees in states that are losing access.

Before Friday, we were having a nice week …

There’s a lot to worry about in commercial real estate — from rising interest rates, to the lack of office foot traffic, to a looming economic slowdown and the resulting layoffs — but for a few hours Thursday night the real estate world was cast back to a pre-COVID arcadia of drinking, carousing and CRE celebrity sightings. We’re talking, of course, about the Real Estate Board of New York’s “New York Forever: A Celebration of our City” gala.

There were some definite differences between pre- and post-COVID REBNY galas. But almost all of the differences were for the better.

In previous years the affair felt almost like a bar mitzvah; the high and mighty of the business donned tuxedos and after a productive cocktail hour were herded into the New York Hilton Midtown’s immense ballroom. There were speeches from the dais that nobody listened to (honorees like Chuck Schumer or REBNY presidents like John Banks spent considerable time and effort shushing the audience), there were the rubbery chicken and questionable fish dinners, there were the old reunions accompanied by warm embraces and earnest promises to “email my assistant tomorrow.”

This time was somewhat different.

First off, the tuxes were gone. “Cocktail attire” was the suggested dress code, and many collars were open. (At least one guest was dressed in what looked like jean shorts.)

Second, REBNY wisely ditched the Hilton for The Glasshouse, a venue overlooking the Hudson River on the far West Side.

Third, REBNY dispensed with the sit-down dinner aspect of the party, Instead, some of the best restaurateurs in the city like Daniel Boulud and JJ Johnson were on hand, where they served items like grilled shrimp with a cold corn velouté, or salmon with piri-piri sauce and pineapple black rice; and there were specialty cocktail stations rather than the tired, old “Johnnie Walker, neat” requests that you usually heard.

Fourth, rather than having speeches throughout the meal from honorees and special guests, the speeches were unrolled early in the evening in a mix of video and live formats, and were much more succinctly presented with only a limited amount of shushing. (You can read about all this year’s honorees here.)

Of course, there were still traces of the old REBNY gala; Gov. Kathy Hochul was on hand as one of the early speakers. One still saw real estate royalty like Douglas Durst queuing up at the bar, and Mary Ann Tighe holding court with junior brokers. Yes, we were promised a few follow-ups with an assistant on Friday. But most of the people Commercial Observer spoke with agreed that the new format was a welcome change and the party a great success.

However, the cocktail chatter also revealed notable nervousness. Some of the brokers CO cornered were sober when the topic of office leasing came up. Also, the fact that less than two weeks ago 421a had expired without a replacement was acknowledged as worrisome. (Although a lot of people at REBNY were more sanguine on that one; once the November elections are over, they are reasonably confident that something will replace it.)

Indeed, there’s a lot that REBNY has on its plate right now. And, while return to work has been an ongoing headache, it’s not as if the organization hasn’t had its share of good news recently. The Adams administration is generally considered a touch more sympathetic to CRE’s needs than the previous mayoral administration. Eric Adams brought in political veterans like Dan Garodnick to run the Department of City Planning, and he spoke to CO earlier this month about everything from zoning to the skyrocketing rent on apartments in Manhattan. Just this week the Rent Guidelines Board handed landlords of affordable housing their biggest rent increase in a decade. And, while there will always be considerable grumbling on the question of Local Law 97, a number of developers have seemingly made their peace with carbon-cutting regulations.

Beyond NYC

One region that isn’t worried about losing its office mojo is South Florida; this week Ken Griffin’s Chicago-based Citadel investment house revealed that it is moving its global headquarters to Miami.

Also, the luxury fashion brand Hermès also decided to increase its corporate presence in Miami’s Coral Gables, inking a 4,623-square-foot office lease at 150 Alhambra Circle. 

And, earlier this month Ripple, a cryptocurrency exchange company, leased a 6,500-square-foot office at The Gateway at Wynwood.

And, while office is still mired in a national funk, there are other commercial categories that are booming. For instance, did you know there is a skyscraper movement afoot in … Boise, Idaho?

It’s true. With Boise’s population growing at almost 15 percent between 2010 and 2020, the city has been on a building kick of high-rise apartments. (As well as low-rise ones.)

But Boise is probably best described as an example of a larger trend; in the last quarter of 2021, multifamily construction in small cities (defined as ones with 250,000 people or fewer) made up nearly a quarter of all national construction, as per the NAHB Home Building Geography Index — this is a 43.5 percent annual increase!

Did somebody say retail?

Well, it’s still rough out there for a retailer. But that doesn’t mean there haven’t been some interesting developments in the last week.

First, in Southern California, Tiffany and Shops, the 28,421-square-foot retail property in Pasadena, Calif. — which is home to Tiffany & Co., Crate & Barrel and Foot Locker’s House of Hoops — was sold to Felson Companies and Blatteis & Schnur for $52.3 million, or $1,838 per square foot. This was a record, according to CBRE, which brokered the deal for the buyers and the seller, Rockwood Capital.

Second, while it’s not a retail lease, Dine Brands, the franchisor of some of the nation’s biggest chains (think Applebee’s and IHOP) took 92,000 square feet in LPC’s 10 West development also in Pasadena.

Finally, ShopCore Properties (a subsidiary of Blackstone that owns and operates 65 different shopping centers nationwide) named Marc Ricks as its new CEO, replacing Mark Gilbert, who departed in November for Cushman & Wakefield.

On another sad note

Friday marked a grim milestone: On June 24, 2021, the Champlain Towers South condominium in Surfside, Fla., collapsed, killing 98 people.

It was something that captured the attention of the nation as rescue efforts unfurled and recriminations flew. Legislation was passed, lawsuits were settled, and a number of local condo boards nervously investigated their own aging buildings to make sure they weren’t also vulnerable to disaster.

But one thing that Surfside did not do was hinder the local real estate market. In fact, the market around Champlain Towers has only gotten more expensive and desirable since the tragedy. Developers have been on a buying spree of older condos along the water with the intent of tearing them down and rebuilding.

See you next week.