Everything you need to know about last week's top real estate news.
Video Recap:
WeLive Expansion On Pause Until It Can Be '10 Times Better'
WeWork's co-living concept, WeLive, is only six months old. And while the $16B co-working giant planned to open several more WeLives around the country this year, that's on pause while the startup "iterates," according to East Coast GM Dave McLaughlin.
Dave spoke on a panel at Bisnow’s annual national multifamily conference last week and said: "There’s a lot of refinement of the idea, tweaking certain things we tried and improving…We’re really in that iterative cycle now. WeLive 2.0 is not going to be 10% better, but 10 times better, and we want to nail that down before we make more deals."
Dave didn't specify what exactly that would entail, but WeWork has its sights set on buying its own properties, and has said that unexpected construction costs are part of the reason it slashed profit projections earlier this year.
US Economic Update
Rising gas prices and housing costs pushed consumer inflation in September by the largest amount in five months—a good sign for the Federal Reserve, which has been on the fence about hiking interest rates in hopes that inflation would rise to 2%. Within the past year, consumer prices have moved 1.5%, the largest annual gain since late 2014, according to MarketWatch. The consumer price index was up by 0.3% in September, meeting economist expectations. Cost of shelter grew at its fastest pace since May, and energy prices saw the largest increase since the spring.
Janet Yellen said at a conference of policymakers in Boston that the Fed may need to trigger a “high-pressure economy” to undue damages from the 2008 crisis before they become permanent features of the US economy. While she did not directly address interest rates or particular policies, Yellen communicated a deepening concern that the US economy may need aggressive steps taken to safeguard it, Reuters reports.
That could mean temporarily pushing robust aggregate demand while tightening the already tight labor market. While Yellen’s comments were posed as questions that need more research, one idea she mentioned was pursuing policies that continue to lower unemployment while boosting consumption, even at the risk of triggering high inflation.
In Local New York Government News...
The New York Daily News reported earlier this week that things aren’t going well for the Bedford Union Armory redevelopment in Crown Heights. After losing Knicks star Carmelo Anthony’s support for the proposed sports center, the project continues to face resistance, and officials are now calling for all of its units to be affordable. Rep. Yvette Clarke, state Sen. Jesse Hamilton and assembly members Walter Mosley and Diana Richardson wrote a letter to the Economic Development Corp pointing out that the city-owned site is the last large-scale vacant site in a gentrifying neighborhood and the EDC shouldn’t waste its “one chance to get this project correct."
The City Planning Commission has approved the sale of air rights from Pier 40 to Atlas Capital Group and Westbrook Partners’ 550 Washington St in the West Village, allowing the two to build a larger apartment complex at the former St. John’s Terminal. Curbed reported the rights could have a $100M price tag.
Airbnb Changing Policies To Appease Regulators and Prevent Fine Bill's Passing
The bill that would impose fines of up to $7,500 on illegal Airbnb operators sits on Gov. Andrew Cuomo’s desk, but Airbnb’s doing everything it can to prevent its passing, including offering concessions to appease regulators. Starting Nov. 1, the home-sharing company will institute a policy that forces hosts to list only one apartment for rent and will start a “three strikes policy” that will permanently ban repeat offenders. It's also developing a database that NYC hosts will have to register with.
Last Week’s Top Leasing News...
Major League Baseball signed a 400k SF lease for six floors at the 48-story, 2.1M SF 1271 Avenue of the Americas Thursday morning. MLB and MLB Advanced Media will take control of the space in 2019. The office—previously occupied by Time Inc—will consolidate MLB’s employees from Midtown and Downtown locations. MLB will have the right to use Rockefeller’s street-level plaza for public events and exclusive use of the eighth floor’s outdoor terrace.
Prodigious—a subsidiary of PR and advertising firm Publicis Groupe—is bringing a 15k SF creative campus to Industry City in Sunset Park. Prodigious already has studios at 75 Hudson and 1675 Broadway in Manhattan. The campus will have recording and post-production facilities and will be on the sixth/top floor of Building 2 (220 36th St).
Fast-Casual Overexpansion Leaves A Graveyard Of Failed Chains In Its Wake
Fast-casual is exploding in the US, but not every eatery can keep pace and the casualty list keeps growing as the US experiences one of the largest restaurant shake-ups in years.
Three restaurants went under in just one week, with Cosi; Don Pablo’s parent Rita Restaurant Corp; and Garden Fresh Corp, operator of Souplantation and Sweet Tomatoes, seeking Chapter 11 bankruptcy protection, according to the Wall Street Journal.
At least five other eateries have filed for protection this year. One reason for the consolidation is the disparity between restaurant supply and foot traffic—between 2006 and 2014 the number of restaurants in the US jumped by 7.3% while the US population grew at 6.9% and foot traffic didn’t keep pace.
