The Daily Ten – New Yorkers & Londoners are ditching the city, Malls dragged into bankruptcy, PayPal further embraces Bitcoin…
The Daily Ten
1. New Yorkers and Londoners Are Ditching Cities for the Suburbs | Bloomberg
Real-estate companies are seeing clear evidence of New Yorkers and Londoners ditching city centers for suburbs as the pandemic changes the way they live and work.
IWG Plc, which operates Regus-branded serviced offices in cities around the world, said there was a “a strong pick-up in demand” for suburban space versus major cities, particularly in places reliant on public transportation, in a statement Tuesday. While deals for downtown New York offices have collapsed by 30%, activity in southern Connecticut is up over 40%, IWG said.
Across the pond, U.K. housebuilder Crest Nicholson Plc’s expected slump in full-year profit may not be as bad as expected, partly thanks to developments in southern England outside of London, it said in a quarterly update. A “structural change to the balance of office and home working” featured strongly in customers’ decisions, it said.
2. Mortgage IPO Boom Faces Market Turbulence | WSJ
Nonbank lenders have had a strong year, but October’s market shakeout could stall the fundraising train
Mortgage lenders hoping to take advantage of a surprisingly prosperous year are facing a big challenge: rising market turbulence.
The August market debut of Quicken Loans parent Rocket Cos. kicked off a flurry of planned public listings for mortgage companies, marking a major reversal for a group that just two years ago was under significant pressure. At least six of the 30 largest U.S. mortgage lenders have gone public this year or are seeking to, according to industry-research group Inside Mortgage Finance.
3. Redfin policy makes it harder to sell homes in minority neighborhoods, lawsuit claims | New York Post
Housing advocates have accused Redfin of “redlining” minority neighborhoods with a price policy that can make it harder for people of color to sell their homes.
Redfin will only act as a real estate broker for homes if they’re above a minimum price that varies for each housing market — meaning the company is less likely to offer its full range of services in predominantly non-white neighborhoods, according to the National Fair Housing Alliance.
The Washington, D.C.-based group brought a lawsuit against Redfin asking a court to put an end to the practice, which it likened to the racist redlining policies that shut black families out of the housing market for decades.
A two-year investigation by the National Fair Housing Alliance found that Redfin offered no real estate services to non-white ZIP codes at a disproportionately higher rate than white ZIP codes in 10 metropolitan areas, including Long Island, Baltimore, Detroit and Philadelphia.
4. Imagining a Second Life for Midtown Manhattan’s Empty Offices | Bloomberg
As workers stay home and office buildings sit vacant, some see a new role for New York City’s business district — as a site for affordable housing.
Midtown Manhattan, a dense grid of office towers normally pulsing with activity, has been called a “ghost town” so many times that you’d expect to see tumbleweeds rolling through Bryant Park. Back in July, the New York Times declared that the commercial district was in a “purgatorial phase zero” of reopening, painting an evocative scene of a food cart vendor scanning empty streets for signs of life. Months later, things have not improved much. Occupancy rates on city hotels, like those in Midtown South tied to tourism and corporate travel, have plunged below 10%. And most significantly, the workers who once crowded sidewalks on their way to the office have stayed away. Commercial broker CBRE found that just 10% of Manhattan workers have returned as of Sept. 18.
5. Indonesian logistics platform Logisly raises $6 million Series A to digitize truck shipments | TechCrunch
Indonesia’s logistics industry is very fragmented, with several large providers operating alongside thousands of smaller companies. This means shippers often have to work with a variety of carriers, driving up costs and making supply chains harder to manage. Logisly, a Jakarta-based startup that describes itself as a “B2B tech-enabled logistics platform,” announced today it has raised $6 million in Series A funding to help streamline logistics in Indonesia. The round was led by Monk’s Hill Ventures.
This brings the total Logisly has raised since it was founded last year to $7 million. Its platform digitizes the process of ordering, managing and tracking trucks. First, it verifies carriers before adding them to Logisly’s platform. Then it connects clients to trucking providers, using an algorithm to aggregate supply and demand. This means companies that need to ship goods can find trucks more quickly, while carriers can reduce the number of unused space on their trucks.
6. AMC’s revenue plummets by more than 90 percent as theaters remain empty | The Verge
Things aren’t getting better anytime soon
AMC Entertainment didn’t try to hide the immense financial duress the company has faced the last several months and the increasingly uncertain future that lies ahead if AMC can’t find new ways to make cash.
The company posted a revenue of $119.5 million in its third quarter, down 91 percent year over year. The same quarter last year brought in more than $1 billion. AMC noted in its earnings that it’s “operating approximately 539 of its 600 domestic locations,” as of October 2020, but cities like New York City and Los Angeles remain big obstacles. The issue is getting people into those theaters on a consistent basis without any big movies to encourage attendance. On Monday, the company also filed new documents stating it was trying to sell 20 million class A shares in an attempt to secure just under $50 million.
“The duration and impact of this pandemic are still affecting us to this day and are certain to continue to affect our results going forward,” CEO Adam Aron said in the report.
7. PayPal plans a much wider embrace of cryptocurrency, including Venmo use | Fortune
PayPal CEO Dan Schulman provided new details about the company’s recent embrace of Bitcoin and other cryptocurrencies on Monday, describing plans for shopping tools as well as potential partnerships with central banks.
Schulman’s remarks, which came during an earnings call after PayPal posted record third quarter revenues, follows the company’s announcement last month that it will soon allow users to buy cryptocurrency within its app.
According to Schulman, starting in the first half of next year PayPal will let users draw from cryptocurrency accounts to pay for goods and servants at 28 million merchants that use the company’s platform. The arrangement, he says, will not result in any incremental fees for either consumers or merchants.
8. Malls Dragged Into Bankruptcy by Carnage at Retail Tenants | Bloomberg
(Bloomberg) — America’s ailing malls suffered a pair of body blows over the weekend as two major landlords followed their ever-growing list of bankrupt tenants into Chapter 11 protection.
Pennsylvania Real Estate Investment Trust and CBL & Associates Properties Inc. sought protection from creditors Sunday, citing pandemic-induced pressures on their tenants and, in turn, themselves. Together the two REITs account for some 87 million square feet of real estate across the U.S., according to court papers.
The pandemic worsened an already dire situation for brick-and-mortar retailers, with a steady stream of chains falling victim as their customers shifted to online shopping. J.C. Penney Co., J. Crew Group and the owner of Ann Taylor are among the dozens of chains that have sought court protection since Covid-19 lockdowns throttled in-store shopping this year.
9. New York City Tech Startups Rethink Their Office Space and Culture | WSJ
Coronavirus pandemic is driving small firms to sublet offices, break leases and negotiate lower rents
New York City tech startups are reacting to the workplace upheaval caused by the coronavirus pandemic by subletting their spaces, breaking their leases and negotiating lower rents.
Manhattan office leasing is on track to end the year at the lowest volume of the past 20 years, and tech-firm leasing has also slowed, with real-estate brokerage firm Colliers International estimating that it will total 2.8 million square feet, the slowest activity since 2015. Last year, by contrast, tech companies signed more than 7.5 million square…
10. Boeing looks to offload 30% of its real estate | The Real Deal
Tough quarter brings downsizing in space, layoffs
Boeing may reduce its real estate footprint by as much as 30 percent because of the pandemic.
The Chicago-based company announced on Wednesday it is exploring its options for selling some of the real estate it owns around the country, the Puget Sound Business Journal reported.
“We’re reviewing every piece of real estate,” CFO Greg Smith said. “Every building, every lease, every warehouse, every site to see how we can be more efficient.”
Smith said the review aims to take advantage of “new and flexible remote work possibilities” that arose from the coronavirus pandemic, according to the Business Journal.
Job cuts will also allow the company to reduce space. The company plans to cut 30,000 jobs by the end of the year and announced 7,000 layoffs on Wednesday.