While New York City is in the infancy of coronavirus Phase 2, the impact of the pandemic on the NYC economy has been stark and highly visible!
This includes the large number of boarded-up stores lining the streets, and the dearth of any car/foot traffic on those same streets!
The current state of the NYC economy includes job furloughs, unemployment, store and restaurant closings and many companies working remotely for the foreseeable future. The real estate market includes rent and eviction moratoriums creating confusion for building owners, landlords and those who own, lease and rent in New York City.
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But, at the same time, as we have seen too many times in the past, difficult times can potentially offer great opportunity for those willing to take the risks.
Pain and Potential
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Commercial Space
I was struck by an article I read this morning at the NBC NY website, describing how the McDonald’s in Times Square was closing for good. And although there’s another McDonald’s close by on 45th and Broadway, I view this as a big deal.
Times Square, ‘The Crossroads of the World’, is tailor-made for fast food given the fact that on a typical non-coronavirus day upwards of 50,000 people move through it.
Pre-coronavirus, ground floor rents there were in the $1,900 psf range. But during and after a pandemic price discovery for this space and other commercial space, if/when it occurs, may offer some great opportunities for those willing to enter the market.
This same scenario will play out all over New York City both on the street and up the elevator in office buildings as current tenants look to renegotiate, reduce their space or move out all together.
A Potential Bright Side: For any business looking for ground floor retail space or office space in NYC, the probability is that the owners/management companies will be listening and sharpening their pencils!
Residential Space
I was equally struck by an article in Bisnow, with the title ‘The 6 Luxury Condo Buildings In New York With The Most Unsold Inventory‘.
Forgetting for a second that word on the street is that a significant number of current New York City owners may be looking to sell and move to less dense environs, anyone who has walked around or driven into NYC must have noticed the new official bird of the city, the crane.
Whether Long Island City, Brooklyn or one of the other boroughs, the number of unsold new construction condominiums tops 15,000, with 2,600 of them located in just six buildings!
An example is Skyline Tower in Long Island City, gleaming new construction that dwarfs the Citibank building, offering 802 units at an average price of $1.2MM. As of this writing 500 units are unsold!
Brooklyn Point in Downtown Brooklyn is the tallest building in the borough at 720 feet. Offering 485 condominiums for sale, over 300 remain unsold!
The other 4 condominium buildings with an abundance of unsold units are One Wall Street, One Manhattan Square, Front & York, and The Towers of the Waldorf Astoria.
A Potential Bright Side: Market turmoil and the turnover of residents living in existing buildings can potentially cause angst for sellers, but for buyers it may present an opportunity to have price discovery work in their favor. While sellers including new construction can sometimes be hesitant to lower prices, the longer coronavirus lingers the more motivated they will likely become!
“If opportunity doesn’t knock, build a door.”
Milton Berle
Michael Haltman, CEO
Hallmark Abstract Service
(646) 741-6101
mhaltman@hallmarkabstractllc.com
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