He is baaaack.
Two years after the start of the agony, WeWork shares have started trading Thursday at the New York Stock Exchange. And the company’s bloody but unyielding founder, Adam Neumann, wasted no time party the same morning at the standard hotel.
For those who don’t remember how it all started and escalated, WeWork began the IPO process in 2019 as a global leader. second most valued startup with a valuation of $ 47 billion. In a few months, the company transformed into a reeling company, $ 2.9 billion in brothel with the erratic Neumann being shown the door after antics like smuggling weed on international flights and hire Darryl McDaniels from Run-DMC to play just after layoffs in the company.
But on Thursday, Neumann had reason to be happy: the initial public offering bode well. WeWork’s shares started trading at $ 10.38 a share and quickly surpassed $ 11 by mid-morning of the opening. The dude still owns a lot of WeWork shares, so he’s wound up hundreds of millions.
Perhaps the market trusts a guy with a lot of experience in struggling real estate: current WeWork CEO Sandeep Mathrani.
Mathrani will have his work cut out for him if the coworking giant is will really live up to its current valuation. But at Commercial Observer Future Forward event earlier this month in Miami Mathrani pointed out that WeWork may already be on the way:
âWe leased 9.2 million square feet in the third quarter,â Mathrani said. “I don’t think there is an office owner in the world who has done so much in this neighborhood, which says a lot about our business model.”
And, while WeWork is certainly interested in painting a rosy picture of not just their business but the office scene in general, they’re not the only ones with a great story to tell. At another CO event this month owners and brokers were clearly positive on the future of office leasing.
âI think the market has the same elasticity and ultimate resilience as the sectors that have rebounded more clearly,â said Douglas Durst, conference speaker. âThe trajectory of the commercial office market at the start of the summer was extremely positive, but the delta variant caused many tenants to delay their return. Yet we have seen a steady increase in office occupancy rates this fall.
This cautious optimism can be supported by rentals and sales, which have increased over the past month.
Venable, the Washington, DC-based law firm, just nailed 157,800 square feet at Durst’s One Five One in Times Square.
And on SL Green Realty Corp’s earnings call this weekCEO Marc Holliday said the mega-owner has leased 1.4 million square feet so far this year.
âA lot of the leasing is done by financial services companies in particular, who have leased 40% of our current pipeline. [and] in TAMI, which represents about 28% of our current pipeline, âHolliday said on the call.
In addition to the phenomenal success SL Green has enjoyed at One Vanderbilt, which just opened its four-level, 65,000 square foot entertainment space called The Summit at the top of the building, the owner could boast Chelsea Piers became their first tenant at One Madison, having signed a 55,780 square foot lease for a four-level fitness center in the 1.4 million square foot project. (Oh, and speaking of top floor amenities, we’d be remiss if we didn’t recount this KKR has purchased a controlling stake in the 30 Hudson Yards Observation Deck for $ 508.5 million.)
All of this is good news for Manhattan’s expensive new office park.
As recently as last month, the $ 4.5 billion Manhattan West development opened to the public with much fanfare and fanfare. (Questlove and The Roots performed at the opening, with food courtesy of Danny Meyer.) And the story told by its developer, Brookfield, has been largely positive.
âI think it’s a phenomenal opportunity for us to be able to present what probably looks like the future of work, the future of life and the future of play with all the different components that encompass the 7 million feet. squares, âBrookfield’s Ben Brown told CO. in our dive into the project. âI actually think it could be perfectly timed, and projects like Manhattan West will likely be what we see real estate development continuing to do. [aim for] go forward; things that have mixed uses, things that have a health and wellness focus and an experiential focus.
Of course, one of Manhattan West’s biggest selling points has always been that it is close to public transportation, especially Penn Station. However, Penn Station’s status is a bit more complicated than it was just a few months ago.
The rebuilding of Penn Station was something the government of the day did. Andrew Cuomo had donated a lot of time, effort and political capital, calling it the Empire Station Complex. Vornado owns millions of square feet of real estate around the station, which he planned to redevelop in tandem with New York City, spending billions of dollars to improve the station and surrounding areas.
But is Governor Kathy Hochul so excited to invest billions in this? This is the question that anyone who cares about Midtown South must ask right now.
Mandates, permits and rezoning
Governor Hochul’s colleagues were also busy this week.
With just over two months remaining in his second tour of duty, New York Mayor Bill de Blasio issued an order requiring all municipal employees to be vaccinated against COVID-19 before the end of the month, without the possibility of being tested every week. The order applies to some 160,500 city employees, including cops and firefighters (correctional officers have until December 1 due to staffing issues at Rikers). And de Blasio added a sweetener: Anyone vaccinated before October 29 will receive a bonus of $ 500. (So ââif you followed the rules and acted responsibly months ago, you don’t getâ¦ nothing.)
We also learned this week that the city and the Town Planning Commission are prosecuted by a group called New Yorkers for Tourism to stop the proposed special permit for hotels across the city. This is the proposal to ban the construction of hotels in the five arrondissements without a long review process.
About the town planning commission: finally, after several years of debate, the CPC unanimously approved the rezoning of SoHo and NoHo, paving the way for thousands of potential new apartments in these areas. (It should be noted that this was not popular with all parties. “What [the rezoning] will do is threaten hundreds of affordable rent-regulated housing units in these neighborhoods, driving out the massive numbers of long-term, low-income and older residents, âsaid Andrew Berman, head of the Greenwich Village Society for Historic Preservation. âThis will push back small independent and arts-related businesses in the struggling neighborhood, while rewarding the mayor’s sponsor-donor friends with a massive giveaway from the city’s real estate and an almost unimaginable windfall. Berman wasn’t the only one upset.)
Hooray for Hollywood!
Of course, Manhattan isn’t the only place to do good business.
TO THE, Warner Bros. sells the Ranch Studio to Stockbridge and Worthe Real Estate Group, then relets the property after a big half billion dollar makeover.
It’s Worthe’s second mega-chord this month. Almost two weeks ago, along with their partner Invesco, they sold the Gensler-designed 100,000-square-foot 325 North Maple Drive called The Post in Beverly Hills for $ 153.2 million.
Don’t forget Florida
In Miami, Washington-based company Lerner Enterprises (which owns the Washington Nationals) announced that it pick up motion at Dadeland, a 294-apartment tower that includes some 8,246 square feet of retail space and a future nursery school, for $ 114 million.
The Boston-based Rockpoint Group took over the Yankee Clipper hotel in Fort Lauderdale for $ 117 million.
And, no one to overlook for the purchase, the related group seeks to purchase the undamaged sister buildings of Champlain Towers South. (But it can be a bit tricky; the buildings are condominiums, so they should get 95% owner approval.)
At the regional level, there are a lot of different trends that we see in real estate, but there is only one constant: the industrial sector is booming.
The supply chain issues that have cropped up over the past two weeks only underscore that America’s industrial and warehouse space still has plenty of room for growth.
Namely, CO decided to go straight to the horse’s mouth. We spoke to the former Exxtell executive Dov Hertz, founder of DH Property Holdings, on America’s continuing thirst for e-commerce and why this trend continues to gain momentum.
And finally â¦
Speaking of people who are baaack (or maybe never left) Former President Trump launches with new social media platform, and to do this, it uses each developer’s favorite vehicle to go public: a SPAC.
See you next week!