Is retail really resurging?

David Goldsmith

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"Ten biggest transactions in February totaled 116K sf, down 38 percent from a year ago.

The leasing of large retail spaces in New York City is still slowing, based on the 10 largest leases made public last month. Trader Joe’s secured the top spot, with mainstays such as gyms and restaurants filling out the rest of the list."
 
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David Goldsmith

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Apparently the problem with retail is that "tenants themselves have done an incredibly shitty job running their stores" according to Starwood Property Trust CEO Barry Sternlicht.

 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
yeah Im worried about retail and landlords too actually for next 1-2 months with everyone going into social distancing mode. There will be a lot of tentacles to this crisis that reach far and wide that are affected and unsure how fiscal bailouts will help at the moment..in a few weeks, i feel like everything will be dead and silent out there on lockdown as viral tests come back
 

David Goldsmith

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I agree. It was one thing decades ago when rent wasn't such a big percentage of a small retail business total monthly, but now even if your labor, cost of goods sold, etc shrinks to close to zero with rent at what it is being down for 1 or 2 months could kill your whole year. And in small buildings the retail space can provide 60% of the entire Rent Roll so if your store stops paying rent you could easily be under water. We saw this a lot in the early 1990s in Soho, East Village and other neighborhoods: first the store went out and then the building got foreclosed on.
 

David Goldsmith

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For Sam Zell, it’s all about “foreclosures and opportunities”
The Grave Dancer has billions in cash to deploy but will stay away from the sector he calls “a falling knife”

Sam Zell’s Equity Commonwealth real estate investment trust has $3.4 billion in cash ready to deploy in these times of distressed assets, but the self-described Grave Dancer isn’t ready to tango in one sector: Retail.
Zell, who is also chairman of Equity Residential and Equity Lifestyle Properties, said his companies “don’t buy markets, we buy deals.” And with retail real estate, he’ll likely steer clear, he said. In a Zoom interview with SkyBridge Capital founder Anthony Scaramucci, Zell called retail “still very much of a falling knife,” according to Crain’s Chicago.


Zell expects banks to be less forgiving with borrowers, choosing to jettison the “extend and pretend” strategy that many took during the last financial crisis. Banks tended to hold off on foreclosures back then, he said, with the hope those loans would resolve themselves as the economy recovered.

“I think the lending community this time around very much wants to, quote, clean the books,” Zell said, according to Crains. “And I think there are going to be a lot of foreclosures and opportunities.” He added that some investors who might have survived the last few months could falter when banks come knocking.

Zell built up a massive war chest of cash with a huge selloff of properties over the last several years. Equity Commonwealth sold around 150 office properties in recent years, leaving it with just five today.
Zell expects “some significant recovery” from the pandemic-fueled market crisis by year end, and appears optimistic about the economy generally.

“I think just what you have seen in the last few weeks since there’s been some partial openings of various places around the country, people have been willing to spend and in fact, seem to be very excited about the opportunity to get back into the commerce side of the world,” he told Scaramucci.
 

David Goldsmith

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NYC is now the worst place to do business, retailers say
New York City-based stores and restaurants -- like the homegrown sensation Shake Shack -- aren't showing the kind of promising reopening sales that chain owners are seeing in other locations across the country.NY Post photo composite
New York City’s progress fighting the coronavirus is doing little to help retailers, who say business in the city that never sleeps has become worse than anywhere else in the country.
National retailers — from Shake Shack, Applebee’s, and cap seller Lids — say their Big Apple stores are bouncing back more slowly than even neighboring states like New Jersey and Pennsylvania, which were also hard hit by the coronavirus.
The problem, sources say, is Manhattan, which used to be teeming with tourists and commuters — who have largely stayed away since the coronavirus pandemic hit in March. Wealthy Manhattanites also have more resources and flexibility to escape, indefinitely, to greener pastures, like the Hamptons, experts say.
The city’s ghost-town vibe has Shake Shack, which runs 162 restaurants in 20 states, reporting that its Big Apple stores will “take a longer period of time to fully recover than other parts of the country.”
The burger chain made the statement on July 7 as it reported that NYC same-store sales for the week of July 1 had fallen 58 percent compared to a year earlier — the steepest decline among all its regions. Sales in the chain’s Northeast and Southeast stores, by contrast, fell just 24 percent and 32 percent, respectively.
While Shake Shack didn’t mention Manhattan specifically, Zane Tankel, who owns 35 Applebee’s in the New York metro area, told The Post he’s reopened 18 restaurants in neighboring regions, including Brooklyn and Queens. But he sees no point in reopening his two Manhattan stores — not even for curbside pickup.
“I drive around the city all the time and it was an easy determination to see that there’s not enough traffic to open those restaurants,” said Tankel, CEO of Apple Metro. Prior to the pandemic, the Manhattan Applebee’s, located at 205 W. 50th St. and at 234 W. 42nd St., were his most productive locations — representing $25 million in revenues.
Macy’s, whose Manhattan flagship occupies over 1 million square feet of retail space, is also concerned. Asked how its NYC stores, which reopened on June 22, are performing compared to the rest of the country, a spokeswoman said it’s too soon to tell while also noting that “continued work-from-home trends mean fewer commuters coming into the city,” and that international and domestic tourism “remains low.”
 

David Goldsmith

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Brookfield Property’s retail tenants paid 34% of rent in Q2
Company reported another big quarterly net loss, but CEO optimistic “worst of the economic shutdown is behind us”

Brookfield Property Partners collected just 34 percent of rent across its retail portfolio in the second quarter, helping drive another sharp decline in earnings this year. Its office holdings also took a hit.
The real estate arm of Brookfield Asset Management reported a net loss of $1.5 billion from April through June, compared with $23 million of net income over the same period in 2019.

At Thursday’s earnings call, company executives blamed its poor April through June results on coronavirus-caused mall closures. Most of its malls didn’t reopen until June, and the company has seen improved rent collections since July.

Brookfield Property Partners CEO Brian Kingston said the company was “cautiously optimistic that the worst of the economic shutdown is behind us.” He added that “our business is well positioned to handle any lingering impacts.” Brookfield is one of the largest mall operators in the U.S.

At its first quarter earnings call in May, company executives said they were negotiating with 2,400 of its retail tenants who had been unable to come up with the rent, and whose spaces were still closed at the time. That first quarter was also harsh for the Canadian giant, which reported a net loss of $373 million in Q1 compared with $713 million in net income year-over-year.

At its Q2 earnings, the company said cash flow from operations for its retail portfolio dropped to $140 million, compared to $170 million over the same period in 2019.
But the company’s core office portfolio also took a hit. It reported cash flow from operations of $126 million in the second quarter compared to $187 million in the same period in 2019. Occupancy fell slightly to 92.3 percent across the portfolio, with a remaining weighted average lease term of 8.6 years.

As other large office landlords have done, Kingston said he doesn’t believe the pandemic will have a lasting effect on the market.
“In the long run, we don’t think that remote working represents a threat to office,” he said.
The company also saw a decline in its liquid assets, which dropped to $5.9 billion, from $6.2 billion year-over-year.

“Operating with $6 billion in liquidity is more than adequate,” said CFO Bryan Davis. “We tend not to operate with lots of cash because it is not a good returning investment.”
Brookfield’s retail portfolio has come under close scrutiny by investors and analysts, who see it as a bellwether. Brookfield in May said it planned to inject $5 billion into major retail companies hit hard by the pandemic.

The company recently canceled plans to redevelop a mall in Burlington, Vermont, where it planned to build 10 apartment buildings and a 10-story office. It became involved in the project in 2017, but last month sold its interest to local partner Devonwood Investors.
 

David Goldsmith

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Small Businesses Need Rent Breaks. But Landlords Are in Crisis, Too.
Some landlords are adjusting rent, while others hold firm. Their decisions are reshaping New York City’s neighborhoods.After a laundromat in Manhattan said it could not pay its monthly rent in April and May, the manager of the property, Aaron Weber, asked for half the $7,200 bill. Mr. Weber allowed another struggling tenant in the neighborhood, an electronics repair store, to pay one-third of its $12,500 monthly rent.
A nearby clothing store in the Chelsea neighborhood also had its $10,000 rent cut by 50 percent. The drastic reductions are part of a desperate effort by Mr. Weber and his company, which manages nearly 40 commercial properties in Manhattan, to stave off vacancies, even as revenue plummets and taxes, utilities and other costs erode their own reserves.
“We kind of just take what we can get and work out a number,” Mr. Weber said. “As long as they are paying something, we’re happy.”
Thousands of small businesses that are a staple of city life have been ravaged by the pandemic, leaving them unable to pay basics like rent. That in turn has set off an extraordinary crisis for landlords, who have lost tens of millions of dollars in income since the city’s lockdown began in March, analysts said.
The landlords face an unpleasant choice: forgive or lower rent payments even as their own bills pile up, or hold firm and risk the prospect of losing a tenant who may not be replaced for months or even years.
Even as some landlords are cutting rents, others have been unwilling to consider any compromise, going so far as to threaten tenants with lawsuits even if a business faces permanent closure.
As a result, the relationship between tenants and landlords, often difficult in normal times, has become more complicated and a major challenge for New York’s recovery, with worries growing among industry figures, brokers, landlords and some business owners that a combination of high rents and mounting debt could yield rows and rows of barren storefronts.
“On the tenant side, the stakes are a massive wave of not temporary but permanent closures, which will mean damages to personal credit scores, many lost jobs and all the ripple effects,” said Ari Harkov, a broker who has worked with commercial landlords and tenants. “On the landlord side, you’re talking about potential foreclosure, you’re talking about people defaulting on their loans, not being able to pay their bills.”

He added: “That could be very, very painful for New York.’’
Louis Rossmann, the owner of the electronics repair store, Rossmann Repair Group, said he asked Mr. Weber for a rent reduction after he lost between $50,000 and $70,000 in revenue in April as foot traffic dramatically declined in Manhattan.
The store sits on West 27th Street, where signs seek new tenants for at least seven retail and office spaces. Other shops and restaurants, like one advertising pizza for 99 cents, remain shuttered. A page taped to the window of Kano Martial Arts said it has shut its doors to safeguard public health.
Mr. Rossmann said he appreciated the lower rent, which helped him keep workers employed. He has also been bolstered by an uptick in customers mailing their devices in for repair, and he was able to pay 60 percent of the rent in August, Mr. Weber said.Still, he is considering leaving New York since even his reduced rent is still higher than he would pay in other cities. Without reliable foot traffic, he said running a small business in Manhattan is probably impossible.

“I don’t know what the city is going to be next year,” Mr. Rossmann said.
Alimu Sow, the owner of the clothing store, Shaw and Barrie Enterprise, said he shut down from March until June. Mr. Sow said the store has had about half the customers it had before the outbreak.
Federal coronavirus relief and a pay reduction kept his three workers on the job, he said, but rent is Mr. Sow’s biggest cost, and he said he could not stay open without a lower monthly bill.
Even as the pandemic has receded in New York, the future for his small business, as for many others, is murky.
“That’s our hope, that it’s getting better,” he said. “But what it’s going to be we don’t know.”
There is no accurate way to gauge how many landlords have granted rent relief, but commercial real estate brokers say anecdotally that a growing number of tenants are getting some kind of decrease.
The pain varies. Commercial tenants like restaurants, shops, salons and others have been hit harder than companies in office towers.
Bigger landlords, who have apartments or offices as well as spaces for small businesses, can often help offset the rent lost from retail tenants.
And retail businesses have been particularly devastated in Lower Manhattan and Midtown, areas that depend on office workers and tourists and where rents were already high.
Government aid programs, like the now expired federal Paycheck Protection Program, have helped businesses stay open, and Gov. Andrew M. Cuomo recently extended a moratorium on evictions of commercial tenants until Sept. 20.
But most businesses are still required to pay rent, and not all landlords are being flexible.
In a survey of 500 restaurants, bars and other businesses released recently by the New York City Hospitality Alliance, about 60 percent said landlords would not defer rent payments in July. In another survey by the Brooklyn Chamber of Commerce, roughly 25 percent of small businesses reported receiving some sort of concession on rent.
“I think landlords to some degree are being cautious about renegotiating their rent and moving forward because they don’t know the extent of this crisis,” said Andrew Rigie, the alliance’s executive director.
In some cases, mortgages place restrictions on how much a landlord is allowed to lower the rent, and many landlords say they need income to pay mortgages, utility bills, property taxes and insurance premiums.

The bills for the commercial property owners who are Mr. Weber’s clients amount to tens of thousands of dollars every month. The monthly water bill averages about $2,250 per building, and maintenance is about $2,000, electricity and gas is about $1,000 and insurance costs are another $1,000, Mr. Weber said.
And then there is the biggest expense, property taxes. For the building with the laundromat, which also has two other commercial businesses, monthly taxes are roughly $18,000. For the building that houses the repair shop and the clothing store, which also has residential units, the tax bill is about $10,000 per month.
“We have a year’s worth of taxes saved up,” he said. “That’s kind of the standard amount that owners hold in their reserve account. Once that’s dried up, it’s going to be scary.”
In some cases, the pressure of those costs can torpedo negotiations with tenants.
The Banty Rooster, a restaurant offering southwestern fare, opened last December in a West Village building owned by Shelley Azapian.
Declining to provide specifics, she said she offered to pay Ms. Azapian a lump sum and then continue paying a monthly percentage of her revenue until that amount increased to the equivalent of her $23,000 rent.
“I made an offer that I felt was fair and also what I was able to do with the resources I had,” she said.

But Ms. Azapian said the proposal would lock in too low a payment for too long. Ms. Tronco-DePierro closed her restaurant in August.
“I can’t change my expenses,” Ms. Azapian said, adding that she had enough money saved up to hold out for the market to improve.
“I’m not a doom-and-gloom person,” she said. “Having lived through 9/11, and the ups and downs of the economic situation, we’ve gone through a number of very deep recessions.”
Vinny Minissale, 60, bought a commercial property in Park Slope, Brooklyn, about 30 years ago where he could run his pizza restaurant, Pizza Town.

The building has another commercial space that had been filled by a clothing and jewelry store called Dearest.
When the pandemic shut businesses, Mr. Minissale said he did not collect rent from Dearest for two months, but then started asking for the regular monthly amount of about $7,000.
“You do whatever you can do,” he said. “If you can’t help no more, then you leave it up to them to do whatever they decide to do.”
Dearest closed for good. People associated with the store did not respond to requests for comment. Mr. Minissale said he has not been able to find another tenant and wonders how long he can keep operating his own business.“If I got to lower it for a year, $1,000 to $2,000, I will do that, if it will give somebody a chance to start up again,” he said. “But I got to keep up with the expenses.”
A few blocks away, Daniella Stromberg, the owner of d’mai Urban Spa, is preparing to shut down at the end of September after 15 years. Her revenue, from skin care and massages, dropped from about $200,000 per month to zero after the spa shut down in March. She furloughed more than 30 employees.
Still, she said she paid her $28,000 rent through July, while trying to negotiate relief from her landlord. The spa reopened under limited-capacity rules in July.
She said she offered to pay 50 percent of her rent through September 2021 when her lease ended or until she could operate at full capacity. The landlord countered by saying he could offer half rent for three months if she extended her lease by five years, she said.
“I said, ‘Well, I can’t meet those terms, and I’ll be out on Sept. 30, your place will be broom swept,’” she said, adding that she was planning to file for bankruptcy.
The landlord, Greg Fournier with Greenbrook Partners, did not respond to requests for comment.
“It’s just another really sad story, of many more dozen people losing their livelihoods, myself included,” Ms. Stromberg said.
Other negotiations have produced happier outcomes. Blaire Papagni has owned Anella, a restaurant in Greenpoint, Brooklyn, since 2009. Anella shut down in March, opened for takeout in the middle of May and for outdoor customers in late June.
She laid off 22 employees, but was able to bring back eight. She has been kept afloat in part, she said, by her landlord’s willingness to cut her a break. Ms. Papagni declined to provide specific numbers, but said she has been paying roughly half her normal rent.“It’s something that we’re trying to work out with our landlord on a monthly basis,” she said.
At the Brooklyn Navy Yard, a vast city-owned complex that houses hundreds of artisans, artists and small manufacturers, David Ehrenberg, the president and chief executive of the nonprofit corporation that manages the Yard, is trying to help struggling tenants. A typical adjustment includes forgiving one-third of the rent, deferring another third and requiring tenants to pay the remainder.
“Demanding that small businesses pay 100 percent of their rent in the worst pandemic in 100 years and the worst recession since the Great Depression hardly seems like a winning business proposition,” Mr. Ehrenberg said.
https://www.nytimes.com/2020/08/13/business/commercial-landlord-loan-foreclosure.html?action=click&module=RelatedLinks&pgtype=Article
 

David Goldsmith

All Powerful Moderator
Staff member
Nearly 90 Percent Of NYC Restaurants & Bars Couldn't Pay Full Rent In August

A new restaurant industry survey offers a sweeping view of just how precarious the financial situation is for the majority of restaurants and bars in the city: nearly 90% of those businesses were unable to pay full rent in August, with 34% unable to pay any rent at all.

The survey of 450 restaurants, done by the NYC Hospitality Alliance, found that the number of businesses who couldn't pay rent had risen over the last three months, despite the addition of outdoor dining and other measures. In June and July, 80% and 83% of restaurants, respectively, said they were unable to pay full rent.

Of those restaurants that said they couldn't pay full rent in August, nearly half said they'd be able to pay 50% of their current rent, with another 30% saying they could only pay less than 50%. About two-thirds of those surveyed said their landlord had deferred some of their rent payment during the crisis, but almost 60% say they haven't been able to renegotiate their leases with their landlords.

"New York City restaurants have been financially devastated, and it's unfortunate but not unsurprising that month after month, more restaurants that we survey have been unable to pay their full rent," said NYC Hospitality Alliance executive director Andrew Rigie.

While the addition of outdoor dining, the return of indoor dining at 25% capacity next week, and the COVID-19 Recovery Charge are great steps forward for restaurants, the overwhelming consensus by restaurateurs is that those things aren't enough to offset the incredible damage COVID has wrought on small business owners.

"There's no way small business owners are going to be able to pay back multiple months of missed rent, nor will they be able to pay 100% of pre-pandemic rents anytime soon," Rigie said. "In perspective, it was difficult enough for New York City restaurants to survive pre-pandemic when they had 100% occupancy."

David Rosen, owner of several eateries including Williamsburg’s the Breakers, told the NY Post that the scariest part of this new survey is what it implies about what's to come as winter approaches: “What’s concerning about this report is I would assume given the past two months and with outdoor dining unfortunately will be peak revenue season during this pandemic for restaurants. As we head into the winter even with indoor dining on the horizon I don’t think that 25 percent indoor will exceed what exists already outside. This inability to pay rent trend will continue, if not worsen,” he said.

The Long Island Restaurant on Atlantic Avenue STEVEN PISANO
As for restaurants renegotiating with their landlords, Rigie said he's heard that "it's been really all over the map. We've heard some really positive stories, but we've just heard way too many negative stories where landlords have been unwilling, or in some cases, maybe unable to reduce or forgive enough rent to make it viable for that restaurant to survive. So it's been really tough and we're not going to solve this rent crisis simply by relying on people to negotiate unfortunately."

David Schneider, founder and owner of Oaxaca Taqueria and managing director of food and beverage at the McCarren Hotel and Talk Story Rooftop, told Gothamist that even those whose landlords have cut their rent during the first months of the pandemic are feeling the pressure six months in. "Landlords are not going to be patient much longer," said Schneider. "There needs to be relief for landlords too so they're not relying on us."

Schneider stressed that with such a slow recovery on the horizon, it will take the entire industry "working together as opposed to each individual place trying to survive on their own."

That sentiment was echoed by Salil Mehta, chef/owner of Laut and Laut Singapura. "We've suffered incredibly, we've lost more than half our savings so far," Mehta told Gothamist. "How do we resolve landlord-tenant disputes at this time? Some landlords are being helpful, some are playing hardball. The big underlying issue is people not being able to make rent during this time. We're used to paying $40-50,000 rent even with 25 seats, and I don't think we can afford to pay $20-25,000 in rent now, after our landlord discounts us."

"I think the only way any restaurant will survive is through the help of their landlord, that they all understand we're in it together," he added, saying NYC's recovery can only happen if . "If they help the tenant out, the tenant will survive. But the city hasn't helped landlords much either, so it trickles down to restaurants and trickles down to the economy."

A recent report from the New York State Restaurant Association [NYSRA] found that two-thirds of New York restaurants said they are likely to close by the end of the year without a comprehensive relief package specifically for restaurants, with half of those restaurants saying they're likely to close by November.

The problems aren't just in NYC of course: in a report last week, the National Restaurant Association found that almost 100,000 restaurants countrywide—nearly 1 in 6 restaurants—are closed either permanently or long-term; nearly 3 million employees are still out of work; and the industry is on track to lose $240 billion in sales by the end of the year.

And that's why Rigie and so many others say it is imperative that politicians in Washington pass the RESTAURANTS Act, a bipartisan federal bill that would create a $120 billion fund to aid small and locally-owned restaurants, and cover the difference between revenues from 2019 and estimated revenues through the rest of the year.

On a more local level, Governor Andrew Cuomo extended the commercial eviction moratorium until October 20th for tenants that haven't paid their rent yesterday, another positive temporary measure. It's still unclear whether outdoor dining will be extended past its current October 31st deadline (or even become permanent) or if indoor dining capacity will be increase to 50% by November 1st.

"It's going to take really a restaurants Marshall Plan that's going to have various policies from all different levels of government for a long time until businesses can get back to something like a pre-pandemic operating environment," Rigie said.

According to a recent report by Comptroller Scott Stringer, at least 2,800 small businesses in the city closed between March 1st and July 10th, including about 1,289 restaurants.
 

David Goldsmith

All Powerful Moderator
Staff member
Nothing is coming back without foot traffic.
Foot Traffic Still Down More Than 90% in Seven NYC Zip Codes, According to Cell Phone Location Data

Helen Pearsall-Barksdale sold women’s undergarments for thirty years from a few locations in Harlem. Her shop, Gemini II Specialty Boutique, specialized in serving full-figured women.
“We wanted to do something helpful, but we wanted to make money, too,” she told NY1.
They stopped making money when the pandemic hit, according to Pearsall-Barksdale, and were forced to close their doors for good.
“It kind of took us by surprise that suddenly this happened” she said.
It took everyone by surprise.
Take a look at how quickly foot traffic dropped in the city.



An analysis of cell phone locations by the company SafeGraph shows a quick peak of people rushing to grocery stores after Governor Andrew Cuomo shut down the state in March, but then all retail and restaurant business plummeted. By April, clothing store foot traffic fell by nearly 100 percent.
“That’s something that we saw in New York and across the country, that clothing saw the biggest decline,” said Nick Huntington-Klein, a Seattle University professor of Economics.
Huntington-Klein analyzes the data for SafeGraph and said foot traffic has recovered to about half of what it was before the pandemic, but some neighborhoods are still struggling.



Foot traffic was still down more than 90 percent in Lower Manhattan around the World Trade Center and in areas of Midtown from August 2019 to August 2020, according to SafeGraph.
Without the streets packed with office workers and tourists rubbing elbows, it’s what you’d expect.



But some neighborhoods in Queens are even worse off: from August 2019 to August 2020, SafeGraph says foot traffic went down 92 percent in Ditmars Steinway, Corona down 98.9 percent, and Elmhurst is stuck at negative 99.3 percent.
"The area in Queens in particular was the epicenter of the epicenter of this pandemic," said Queens Chamber of Commerce President and CEO Thomas Grech. "We read and saw awful stories about Elmhurst hospital being the focal point in many regards. That was the domino.”
Grech said the high infection and fatality rate during the worst of the coronavirus is still keeping people away from Elmhurst and Corona, but the Ditmars Steinway section has separate struggles, namely, the loss of some chain stores before the pandemic.
"Even before the COVID, retail in that area was going through a transition,” Grech explained. “Retail is under assault as we know nationwide. People’s skillset for buying things online only increased during the COVID, but before that it was a challenging environment."
Pearsall-Barksdale isn’t giving up.
She brought her stock home, making house calls for her clients and trying to build a website to keep some semblance of her business afloat.
“I’m just kind of walking through this one day at a time,” she said.
 

David Goldsmith

All Powerful Moderator
Staff member
Report: Half of NYC Restaurants Could Close in Next Six Months

New York City restaurants are in critical condition after having to significantly reduce operations in the pandemic. And because they often operate on tight margins, there are growing fears many establishments will have to close their doors for good.
Various estimates suggest that one-third to half of city restaurants that existed prior to the pandemic could permanently close in the next six months, according to a report released Thursday by New York State Comptroller Thomas DiNapoli.
Irene Siderakis is one of them. She says her restaurant, Kellogg’s Diner, is hanging on by a thread due to the pandemic. The Williamsburg staple dates back to 1928.
"25% is not cutting it. They know, they know that can’t happen. It just can’t,” Siderakis said
But it’s not just the industry that will suffer. Restaurants are the lifeblood of the city, and critical to its economy.
According to the report, restaurants in Manhattan’s central business districts attract millions of visitors who spend $46 billion annually. Behind lodging, the industry is the second largest component of tourism spending.
“Restaurants are one of the keys that make New York City a world-class metropolis," the report said. "Restaurants are essential to defining what New York City and its neighborhoods are, from a tourist and international business destination to the City’s rich cultural identity and immigrant communities. These businesses are a vital element that helps draw concentrations of retail and arts and entertainment to thrive in the City, and imbue neighborhoods with character and individuality. They also provide a launching pad for entrepreneurs and immigrants looking to achieve the promise that New York offers."
Siderakis was not surprised to learn about the report.
“And it’s not only me. It’s my workers, the families behind them and the employees behind them. What’s happening to our city?” she said.
Siderakis is also no stranger to overcoming hardship. Her husband Chris bought the diner back in 2013 but died suddenly five years later.

At the time, she was a stay-at-home mom with no restaurant experience, but she persevered. She even caught COVID and recovered, but she says regulations and restrictions are making it impossible to keep the diner afloat.
“If Chris' death didn’t kill me and COVID didn’t kill me, this is gonna kill me, these closures are gonna kill me,” she said.
Last year, the city’s restaurant industry consisted of 23,650 establishments responsible for 317,800 jobs and $10.7 billion in total wages paid citywide, according to DiNapoli's office. It delivered nearly $27 billion in taxable sales.
In August 2020, restaurant employment was at 55 percent of its level in February before the pandemic hit.
More than 60 percent of restaurant workers living in the city were immigrants in 2018. Hispanics accounted for 44 percent of restaurant workers living in the city, and Asians made up 20 percent.
In order to survive, the industry is calling for opportunities to expand operations.
“It’s important that the state and city continue to be creative and bolster the industry. The city’s decision to extend outdoor dining year-round to help keep restaurants afloat is a step in the right direction along with opening for indoor dining,” said DiNapoli.
Indoor dining in the city resumed Wednesday for the first time in more than six months. But due to safety measures aimed at reducing the spread of coronavirus, restaurants must abide by a 25 percent capacity rule, which owners say is not sustainable.
“While we are appreciative of the government actions taken so far to support our restaurant community and the hundreds of thousands of people it employs, many more polices must be enacted by all levels of government to help save these small businesses and our economy,” Andrew Rigie, executive director of the NYC Hospitality Alliance, said in a press release.
Siderakis just hopes political leaders will hear her plea as she continues to support her four boys.
“We have nothing if I don’t make this work. This has to work. A better plan has to go out. This can’t be happening. Someone has to help fast,” she said.
Capacity could be bumped to 50 percent when the state reevaluates conditions on Nov. 1. Health officials consider indoor dining to be a risky activity. According to a recent CDC report, adults with coronavirus were twice as likely to have dined in restaurants as those who tested negative.
 

John Walkup

Talking Manhattan on UrbanDigs.com
Here's my take. No doubt many businesses are facing a very fluid situation currently and will have a hard time well into the next year. Luckily, it's time for a new mayor which - I sincerely hope - means we will see competing ideas and visions and of how to rebuild and how to strengthen the city going forward. Positive platforms that help small business, support the middle class, and reward those who choose to make this city their home. It'll be a bumpy ride for a while, but buckle up and hang in there.
 

David Goldsmith

All Powerful Moderator
Staff member
Now that Corey Johnson has dropped out, and Ruben Diaz Jr retired from politics, who is going to lead the city? I wouldn't mind Scott Stringer but I'm not sure he's electable in the current environment.
 

John Walkup

Talking Manhattan on UrbanDigs.com
Yeah - it's a good point, but I think we'll start to see more candidates come out of the woodwork come Jan/Feb. I'm sure there will be some crazies (it's NYC after all), but I think common sense will be the new black.
 

David Goldsmith

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Staff member
One of Soho’s priciest retail spaces heads to foreclosure
SL Green bought 106 Spring Street at a 25% discount, but it wasn’t enough to stave off lender

A 25 percent cushion wasn’t enough to save what was once one of Soho’s most expensive retail properties.
The roughly 6,000-square-foot retail space at 106 Spring Street, which has sat largely empty for years, is heading to foreclosure. Owner SL Green Realty bought the property in 2019 from 60 Guilders and Carlyle for $79.5 million — a steep discount from the $105.4 million those investors paid three years earlier.
Lender Citizens Bank scheduled a UCC foreclosure auction for SL Green’s interest in the property as well as one nearby at 133 Greene Street, according to marketing materials and sources familiar with the properties.
Eastdil Secured is marketing Citizens Bank’s interest in the properties at the foreclosure auction, which is scheduled for December. Representatives for the brokerage declined to comment.

A spokesperson for SL Green declined to comment and representatives for Citizens Bank, headed by CEO Bruce Van Saun, did not immediately respond to a request for comment.
Situated at the corner of one of Soho’s most heavily trafficked intersections, 106 Spring Street was one of the neighborhood’s most expensive retail deals ever when hotshot investors Kevin Chisholm and Bastien Broda of 60 Guilders bought the co-op unit with the Carlyle Group in 2016.
By then, however, many believed the bottom had fallen out of the luxury retail rental market. Tenants were balking at the high rates investors were asking in order to justify the large checks they were writing to acquire properties. SL Green, which had lent to 60 Guilders and Carlyle, bought it from them last year for nearly $80 million, or roughly 25 percent off of what they paid.

The trajectory from record-setter to foreclosure is one of the biggest boom-to-bust stories in Soho, and could be a precursor to what many believe will be a wave of distress to come for high-street retail.
A UCC foreclosure action allows a lender to take over a defaulted borrower’s equity interest in a property, rather than the way a borrower would foreclose on the property itself. It’s often a much quicker process than a traditional foreclosure and has become more prevalent, especially as the coronavirus pandemic has tipped many struggling properties into default.
It’s not clear how large Citizen Bank’s mezzanine position is in the two properties, which are the retail components of Soho co-op buildings. The properties at 106 Spring and 133 Greene streets carried a combined $53.5 million in senior and mezzanine debt as of late June, according to SL Green’s second-quarter financials.

SL Green took control of both properties in 2018 and 2019 for a combined $110 million from 60 Guilders and Carlyle, which used the properties as collateral for loans provided by the REIT. SL Green notes in its financials that it acquired the properties through “negotiated transaction” with the sponsors.
The 106 Spring Street loan has an original maturity date of January 2021, and 133 Greene Street’s original maturity date was listed as this past August, according to SL Green’s financials.
 

John Walkup

Talking Manhattan on UrbanDigs.com
Crazy.... luckily ownership churn /= viability. Sure SoHo's got some challenges but - just as airlines will still exist even after owners go broke - the area is a classic NYC destination. Plus ça change....
 

David Goldsmith

All Powerful Moderator
Staff member
I just wish more landlords would bargain in good faith with current tenants rather than having to go through businesses closing, prolonged vacancy, wasted money, etc
 

David Goldsmith

All Powerful Moderator
Staff member
Eatery’s reopening is litmus test for Manhattan restaurants
Theater District mainstay will try to beat the odds

Although Broadway is shut down until next year, one restaurant in the Theater District has decided the show must go on.
Joe Allen on 46th Street, which long served as a meeting ground for Broadway performers and show-goers, is reopening Thursday after closing its doors in March, according to the Wall Street Journal.

The eatery’s attempted revival will serve as something of a litmus test for restaurants that are trying to survive in an uncertain climate, particularly those in areas of the city where foot traffic has plunged and quality-of-life complaints have arisen.
“It makes me feel good I can do something for Broadway, but I don’t know if it’s going to work,” Julie Cronauer, who runs Joe Allen with her father, told the Journal.

In recent months, debate has persisted about to what extent New York can come back. Many areas have begun to fill up with outdoor diners, and the state recently allowed restaurants in the city to serve customers indoors at a reduced capacity. But with temperatures falling and Covid remaining a potent threat, the jury is out. The challenge is most daunting in areas that relied on tourists and office workers, including the Theater District.
“There’s no one in Times Square,” Jeffrey Bank, chief executive of Alicart Restaurant Group, told the Journal. The group owns famed establishment Carmine’s, which has yet to reopen its Theater District location.

But a few other high-profile eateries in Manhattan have decided to fire up their grills, including 11 Madison Park.
The wider restaurant industry is already severely damaged, with about a third of restaurants and bars that were open before the pandemic now closed, according to a recent audit.
The same number could close in the next six months, the audit warned, threatening more than 100,000 jobs.
 
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