Restaurants have started to reopen. But to stay open, many are finding they need to rework their leases.
Under phase two of reopening, eateries can serve diners on sidewalks and parking spaces. As of Wednesday morning, about 4,800 restaurants had opened for outdoor dining, an increase of 50 percent in two days. Indoor dining isn’t expected until phase three, and even then, restaurants can only operate at partial capacity.
Restaurants that rely on indoor dining have found that they need to negotiate new lease terms. Some landlords have been willing to defer rent payments or take temporary cuts based on the health of their tenants’ business, Sasha Jones reports.
“There was definitely some conflict and combativeness early on, but I think for the most part, there was sort of a general consensus that none of us know what’s happening, let’s take a breath,” said Andrew Moger, the CEO of BCD Development, a restaurant-focused real estate brokerage and advisory firm. “Now, there is definitely a willingness to have those conversations.”
But things are looking pretty dire out there. The NYC Hospitality Alliance found nearly 90 percent of 483 industry businesses it surveyed could pay only a portion or none of their May rent. A study of publicly traded restaurant companies by Aaron Allen & Associates found that six of every 10 restaurant chains are at risk for bankruptcy.
“Once a few landlords crack down, it’s really going to be Armageddon,” said Aaron Allen, the founder of the global restaurant consulting firm. “What’s currently happening is armies are being created to renegotiate leases.”
President Trump is in a bit of a 1031 exchange-related pickle.
The Trump Organization is mulling whether to sell its minority stake in a pair of office buildings: 1290 Sixth Avenue in Manhattan and 555 California Street in San Francisco.
Because Trump purchased the stakes through a 1031 exchange in 2005, he’d have to make another like-kind exchange — or pay the capital gains taxes on the sale and the taxes on the 2005 deal, Rich Bockmann reports. It’s not clear how much that would be, but one source said there must be “an enormous gain left over from that deal.”
So, what’s the problem? Just do another 1031! Well, any such agreement would certainly face a lot of scrutiny. Cutting a real estate deal with the president could be viewed as a vehicle to gain Trump’s favor. The two office buildings account for roughly a quarter of the president’s fortune.
What we’re thinking about: How will the primary results change once all the absentee ballots are counted? Send guesses to [email protected]
Residential: The priciest residential closing recorded Wednesday was for a house at 488 13th Street in Park Slope, at $4.24 million.
Commercial: The most expensive commercial closing of the day was for four condos units at 37-12 Prince Street in Flushing, at $9 million.
The largest new building filing of the day was for a 39,262-square-foot community building at 34-38 98th Street in Flushing. Tzuchun Chen of Queens New York Holdings LLC filed the permit application.
NEW TO THE MARKET
The priciest residential listing to hit the market was for a Townhouse at 505 East 84th Street in Yorkville, at $8 million. Nest Seekers has the listing.
— Research by Orion Jones
A thing we’ve learned…
The Los Angeles Department of City Planning has a page on its website dedicated to racial inequality. “We aim to chart a new course towards inclusive planning for all communities in Los Angeles,” the agency states. Thank you to Jerome Dineen, who sent over the website link.
Elsewhere in New York
— New Jersey, New York and Connecticut are requiring those arriving from areas with high coronavirus infection rates to quarantine for 14 days, Politico New York reports. These restrictions could apply to some 131 million Americans.
— A married couple from New Jersey allegedly scammed 33 people out of $6 million using various dating apps, the New York Post reports. Martins Friday Inalegwu and Steincy Mathieu, who live in Maple Shade, are accused of forming “relationships” through sites including Match.com and Plenty of Fish, and then asking their virtual suitors to wire money for fake emergencies.
— Five regions in New York — Central New York, Mohawk Valley, the North Country, the Southern Tier and the Finger Lakes — are poised to enter the fourth and final stage of reopening Friday, NBC New York reports. However, shopping malls, gyms and movie theaters are no longer part of phase four, and it’s unclear when the state will allow them to open.