The Daily Dirt: Coping with the coronavirus

An analysis of New York's top real estate news

Mar.March 02, 2020 01:00 PM
Real estate stocks tumble as coronavirus fears send markets into tailspin. (Credit: iStock)

Real estate stocks tumble as coronavirus fears send markets into tailspin. (Credit: iStock)

Global markets are starting to feel the impact of the coronavirus.

For the past year we’ve heard predictions of an impending recession — but a pandemic wasn’t really part of those projections. Now, following the World Health Organization’s decision Friday to increase its risk assessment of the coronavirus to “very high,” markets across the globe took a massive hit. The virus has reportedly infected more than 80,000 people in 35 countries and killed 2,800.

According to CNBC, the Dow Jones Industrial Average this week plunged more than 12 percent, the largest weekly loss since the 2008 financial crisis. The Dow dropped 350 points Friday and more than 3,500 during the week. The S&P was down about 11.5 percent for the week, according to S&P Global Market Intelligence. The drops have led to more rumblings of a global recession.

Massive stock sell-offs this week even hit what is often viewed as a relatively safe investment during periods of volatility: public real estate investment trusts. The SNL U.S. REIT Equity index fell 2.5 percent Friday following a 12.3 percent plunge Thursday, Mary Diduch reports. REITs that are focused on hotels and shopping centers may be particularly vulnerable, as people cancel travel plans and avoid congregating in public spaces. According to the S&P, Hotel REITs’ prices fell 18.4 percent this week.

Arne Sorenson, CEO of Marriott International, addressed concerns during an earnings call Thursday, saying the impact of the coronavirus was temporary.

“This will pass,” he said. “And when it does, the impact to our business will quickly fade.”

Other real estate companies saw shares drop. Reology, which reported earnings this week, was down 4.43 percent Friday.

The virus is also affecting travel decisions of real estate professionals. Some of the industry’s biggest companies — including Blackstone Group, Cushman & Wakefield, Savills, Knight Frank and PGIM Real Estate — have opted not to send representatives to a major commercial real estate conference in Cannes, France, Property Week reports. Let us know of any steps being taken by you or your company in light of the illness.

What we’re thinking about: What is a realistic timeline for New York to overhaul its property tax system? Send a note to [email protected].


Residential: The priciest residential closing recorded Friday was for a condo unit at 15 Hudson Yards, at $13 million.

Commercial: The most expensive commercial closing of the day was for a mixed-use building at 1601 Avenue U in Homecrest, at $5 million.


The largest new building filing of the day was for a 38,100-square-foot hotel at 634 86th Street in Dyker Heights. Xiaojun Chen filed the permit application.


The priciest residential listing to hit the market Friday was for a condo unit at 70 Greene Street in Soho, at $9.9 million. Compass’ Michael Graves has the listing.

— Research by Ashley McHugh-Chiappone

A thing we’ve learned…

Mortgage recording taxes do not apply to co-ops, thanks to the ownership structure in such buildings (buyers purchase shares in the property, not the individual unit). Thank you Erik Engquist for providing this smackeral of tax knowledge.

Elsewhere in New York

— Rudy Giuliani says he has “five friends left.” The former mayor uttered this lament after not realizing he had failed to hang up after speaking to a Daily News reporter. He was reportedly referring to former Gov. George Pataki, who claims in his upcoming book that Giuliani privately asked him to call off the city’s 2001 mayoral election so he could remain in office after the 9/11 attacks. “I just keep getting disappointed. I got about five friends left,” Giuliani said.

— Speaking of former mayors, progressive groups plan to launch a #NeverBloomberg campaign, Politico New York reports. The Strong Economy for All coalition is slated to march to Mike Bloomberg’s Upper East Side townhouse Saturday and call on voters to vote for, well, anyone else.

— The city is considering capping the commissions that GrubHub and other food-delivery companies take from restaurants at 10 percent, Gothamist reports. Restaurants have complained that these services take as much as 30 percent commissions, effectively wiping out profits.

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