Everything you need to know about last week's top real estate news.
Video Recap:
Last Week In Retail News...
Economists say consumer spending is not to blame for struggling retailers' weak results. These days it seems retail executives are blaming weak consumer spending for the challenges they're facing in the retail environment. According to Bloomberg, major brands like Target, Gap and Barnes & Noble insist the horrible retail environment is to blame for companies' weak results.
But Cowen & Co analyst John Kernan told Bloomberg the metrics related to consumer shopping are healthier now than they have been in the past couple of years. He said “the consumer is in a very good position right now," which is largely thanks to low gas prices, seemingly nonexistent inflation, strong job gains and wage increases.
On another note, grocers are also having a hard time attracting tech-savvy Millennials whose love of e-commerce has drastically shifted their shopping behavior.
In truth, Kernan says, it’s a challenging environment for specific companies whose products have become less relevant. Amazon is one obvious culprit—according to Bloomberg data, 55% of all product searches in the US begin at Amazon.com. At the same time, the US consumer is shifting to spending more money on experiences, like travel and classes, and less on retail.
Nielsen VP of consumer and shopper analytics Marty Siewert said he’s never seen shopping behavior change as drastically as it is today. “Those things in the past that have been real drivers for grocery in terms of freshness and quality aren’t the key drivers for Millennials.”
Baby Boomers once spent hours in the supermarket with long grocery lists, but shoppers in their 20s and 30s aren’t devoting the same time to supermarkets as their parents. Millennials are more likely to purchase through a variety of platforms, including online services like Amazon.com’s AmazonFresh, or even through retailers that carry a bit of everything like Walmart and Target, according to the Wall Street Journal.
In Economic News…
According to Bloomberg, The Fed says it will jack interest rates up higher if the next president pushes to further stimulate the economy by tampering with fiscal policies.
According to Bloomberg, both Donald Trump and Hillary Clinton have called for increased government spending on infrastructure, so if the next president follows through with that pledge it’s likely the Fed will hike rates one or two more times than it had otherwise planned.
US central bankers say they welcome such a step, but would need to raise rates to offset the extra demand brought on by a bigger budget deficit. With the economy already running close to capacity, there's no need for an additional boost in both monetary and fiscal policy.
In Local New York Government News...
Last Friday, Gov. Andrew Cuomo signed the long-debated “Airbnb bill” that imposes fines of up to $7,500 for advertising illegal units on home-sharing sites.
Although Cuomo spokesperson Rich Azzopardi said the decision was “given careful, deliberate consideration,” Airbnb immediately filed a suit in Manhattan federal court to block the law, claiming it violates Section 230 of the Communications Decency Act as well as the First Amendment.
The $30B company has more than 44,000 listings in NYC, which generated over $1B last year, and recently proposed a five-point plan to limit the number of listings a person can have on the site, crack down on repeat violators, and collect and remit hotel-like taxes. With an issue this big, many gave their two cents.
For Last Week’s Top Leasing News...
Brooklyn-based co-working space provider Industrious NYC will be setting up it first Manhattan location on the 12th floor of SL Green Realty’s 215 Park Ave South, after signing a 15-year, 17k SF lease.
The company recently closed an impressive Series B fundraising round, taking in $37M from VC firms Riverwood Capital, Outlook Ventures and Maplewood, raising its total funding to $51M. Industrious has several locations throughout the country, with its first at 594 Dean St in Prospect Heights and others in Atlanta, Chicago, Philadelphia and Los Angeles.
Industrious NYC’s co-founder, Jamie Hodari (left, with co-founder and president Justin Stewart), has said the company plans to add 12 new locations, including Kansas City, Dallas, Phoenix, Portland, Seattle, San Diego, San Francisco, Detroit, Charlotte, Pittsburgh and Miami.
And Finally...
Ziel Feldman’s HFZ Capital Group is closing in on $1.2B in construction financing—one of the largest loans for this cycle—for The Eleventh…
Located at 76 11th Ave, the two towers—one 400 feet tall, the other 300 feet—will hold 240 condo units (with prices ranging between $4M and $8M), a 137-key five-star hotel and 90k SF of retail.
According to The Real Deal, HFZ’s 950k SF, Bjarke Ingels-designed Chelsea mixed-use project is slated to cost $1.9B. The Children’s Investment Fund signed a term sheet earlier this month to provide HFZ with financing.
HFZ has also been looking for $250M in EB-5 funds, and is being financially advised by Howard Michaels’ Carlton Group, which brokered $1B in acquisition and pre-development financing from a group of lenders after HFZ bought the site for $870M in May 2015.
