“We wanted to send a message that New York is still here. It’s not going away,” Tompkins advised CNN Business.
“2021 is certainly going to feel more upbeat than 2020 did, but I think there will also be some disappointment,” mentioned Douglas Hercher, managing director at RobertDouglas, a personal actual property funding financial institution. “If people are thinking Times Square, by the summer, is going to look like the Times Square we all know and love, that’s probably not going to be the case.”
Hotels and retail
Tompkins says about 43% of Times Square’s street-level companies are at the moment closed, down from 87% within the spring. Hercher estimates 25%-30% of retail rental areas in Midtown have “gone dark” because of tenants shuttering indefinitely.
“That’s the state of affairs right now,” he advised CNN Business on Wednesday. “You’re going to see those retailers reducing their footprint to bring their costs in line with their sales. … I think rental rates are going to have to come down tremendously to attract tenancy to those spaces.”
Hercher expects the downturn will worsen via February, making it extraordinarily troublesome for essentially the most revenue-starved retailers to keep up their presence on the Crossroads of World. But Paimaan Lodhi, senior vp of coverage and planning for the Real Estate Board of New York, notes that Time Square’s hire charge reductions have additionally creating alternatives for brand spanking new tenants.
“Rents for Times Square retail space haven’t been this low since 2012,” Lodhi advised CNN Business on Wednesday. “This is an opportunity for other companies to lock in these rates.”
The firm broke floor on the 46-story mixed-use facility on the nook of 47th and Broadway in northeast nook of Times Square again in March 2019. Once it is accomplished, the situation will probably be dwelling to 75,000 sq. ft of recent retail house, a 4,000-square-foot efficiency venue with an out of doors stage, a meals and beverage terrace and a luxurious resort.
L&L managing director David Orowitz says the pandemic hasn’t shaken the developer’s religion within the $2.5 billion venture, which continues to be set to open on the finish of 2022.
“We’ve been really fortunate in that we raised the original capital for the project prior to Covid,” Orowitz mentioned. “At the end of the day, from the perspective of an entertainment and tourism Mecca, I think Times Square continues to evolve and will continue to be what it always was.”
Times Square’s attraction amongst workplace house tenants can also be some extent of competition. For years, firms like Ernst & Young, Reuters and Allianz have occupied skyscrapers overlooking the glitzy and vibrant theater district, which was frequented by practically 380,000 pedestrians on a typical day previous to the pandemic.
Hercher mentioned it is an open query whether or not the change in demand for Times Square workplace house will drive down hire costs since most leases are set between 5 and 15 years.
“We’ve definitely seen in the residential market, rents have dropped 10-15% this year in Manhattan,” he mentioned. “That’s probably a little bit of the canary in the coal mine.”
Lodhi, the Real Estate Board of New York SVP, acknowledged some older, less-desirable workplace buildings round Times Square could also be transformed within the close to future.
“There’s talk about whether it makes sense to make those into residential usage,” he mentioned. “The name of the game here in the Covid era is flexibility.”