Sunday Summary: Distractions For a Terrible Week

Unfortunately, the best we can offer after this tragic, horrific week is some measure of distraction.

A big sale in Times Square

Apollo Global Management (APO) and Newbond Holdings put down $165 million to buy the 317-key Renaissance New York Times Square Hotel at 2 Times Square from Sherwood Equities.

“Timing is everything for Sherwood,” said Jonathan Sniders, the aforementioned company’s senior vice president. “And while certain sectors of the commercial real estate industry are still struggling, with the pent-up demand for travel, Times Square hospitality has never performed better. We felt this was a good time to harvest the hotel while the wind was at our back.”

And, while the 200,000-square-foot property is changing hands, Sherwood will continue to own the tower’s extremely valuable signage as well as its retail portion, which is currently tenanted by Olive Garden, Van Leeuwen Ice Cream and Max Brenner Chocolates.

Taylor Swift and Beyoncé

There are few surer things in Hollywood than Taylor Swift and Beyoncé’s respective Eras and Renaissance concert tours, which have minted money by the ton and spawned two movies. But, in addition to the success of Swift and Beyoncé at the box office, retail and malls are benefitting, too.

Swift’s Eras tour has been responsible for some $10 billion in spending on retail and restaurants (her beau, the Kansas City Chiefs’ Travis Kelce, has also gotten in on the gravy train, pulling in cash for jersey sales, TV audiences and more). And it’s looking like savvy mall owners are also trying to capture some of the runoff of a “Taylor Swift experience,” begging the question: Is Taylor Swift the woman who saves retail?

Indeed, experience is ever more important.

“Experience can mean different things for different brands or concepts,” said CBRE (CBRE)’s San Francisco-based Laura Barr, who was just named the top executive on their retail team, in an interview with Commercial Observer. “But a purely commodity retailer or brand has to have some other reason to get people in. And, often where you see that reason as price, experience might be less of a consideration. So what is the environment like in a store? That all plays in.”

Big picture, retail remains a mixed bag. CBRE’s third-quarter report in Manhattan indicates that asking prices are edging up (2.7 percent) — but leasing velocity is slowing (down 2.6 percent from the previous quarter).

CO’s South Florida conference

CO was on the ground at the Bath Club in Miami Beach for our South Florida Development & Capital Leadership Forum, which saw heavy hitters such as Savanna’s Christopher Schlank, Related Group’s JP Pérez, Terra’s David Martin, Royal Palm Companies’ Daniel Kodsi, Dacra’s Craig Robbins, The Peebles Corporation’s Don Peebles, and many more talk about the state of Florida CRE.

“If you want to be a founding shaper of New York, you’d need a time machine,” said Rebecca Fishman Lipsey, president and CEO of philanthropy booster The Miami Foundation. “If you want to be a founding shaper of this community, pull up a chair.”

Attendees spent the day delving into Citadel’s move to Miami, the Miami Worldcenter, inflation, rising insurance costs, permitting problems, and other topics that real estate pros could geek out on.

Mathias leaves SL Green (SLG)

We were surprised to learn that Andrew Mathias of SL Green Realty is stepping down as president of the real estate investment trust (although Mathias is remaining a member of the board and an adviser to CEO Marc Holliday).

“Andrew’s imprint will be felt on this company for years to come, as his vision and leadership live on across our entire portfolio and the countless team members he has mentored,” Holliday said in a statement.

Indeed, since starting at the company in 1999, Mathias has been one of the key figures in shepherding along projects like 1 Vanderbilt.

But there have been a number of industry moves of late. Several of the many recent exits from investment sales firm B6 have wound up at the Nashville-based Matthews Real Estate Investment Services, which is making a play to get into New York. Last week we learned that Maria D’Angelo, Jermaine Pugh, Bobby Lawrence, Henry Hill, Will Cheng and Jameson Hill took positions at Matthews (which, incidentally, already includes B6 alums DJ Johnston, Brock Emmetsberger and Cory Rosenthal).

Smart thinking

The Silicon Valley-based artificial intelligence hardware and software company NVIDIA is one of the most successful companies in the world. It posted earnings in the second quarter of this year of $13.51 billion — double what it was the year before. That’s the kind of company that’s doing something very right. But, unlike a lot of other top-tier companies that have insisted on returning their workforces to the office, NVIDIA has pretty much fully embraced remote work, even post-COVID. And the numbers that they’re doing seem to indicate that they’re doing something right. That might not be what landlords want to hear, especially if other companies follow NVIDIA’s lead, but it’s important to know that it can be done.

Artificial intelligence and tech were very much on CO’s mind this week (and not just because we were back from the Blueprint conference in September) as we unveiled our second annual list of the most powerful people in proptech.

If anything would be a welcome distraction it’s this — a list of people who are thinking about a better future. It’s an ethos we can embrace during a week where the present feels so painful.