The crisis of urban real estate identity


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Stuart Elliott

Here is a brief overview of where the highest real estate market in the country is located, more than six months in a pandemic that affected our lives.

Worrying numbers are related to two of the few major themes of this problem: How our biggest cities are going through the biggest change in decades, and how the full impact of a pandemic may not be reflected in company books as it should.

In New York:

-O 10 percent workers from Manhattan returned to the office.
—The year-on-year comparison increased the number of people moving outside the district by about 500 percent.
—The number of rental apartments on the market tripled a year ago.
—Leasing offices in Manhattan does not work 50 percent, and this year ‘s total will be the lowest on the track since the turn of the century.
—Average revenue per room in the city’s hotel market fell by 70 percent.
—The pandemic has shaved $ 16 billion outside the planned construction expenditures in 2020 and 2021.
—Mortgage crime rate tripled a year ago.
—One clear point: Industrial leasing has increased 70 percent compared to last year.

Based on these numbers, work will be completed in New York and many other major cities – especially theirs business district. As reporters Kathryn Brenzel and Rich Bockmann write in our story, “Metamorphosis of the Metropolis,” there is “an existential question facing New York and other alpha cities: Postpandemic, can their central business districts survive?”

Right now, the workforce is widely distributed because most employed Americans work remotely. The key to the future will depend on how cities approach long-term planning and how the office market shakes after the economic crisis.

According to some experts, the long-term thinking about New York should include the creation of additional shopping centers outside of Manhattan. In the same way, the idea of ​​a “15-minute” city emerges in Europe, where residents should be a short walk or bike ride from most of their basic needs. This includes the proximity of work and the negation of the need for long commutes (one of the major obstacles to today’s return of workers to office).

Obviously, this would involve huge changes in our cities, but on the other hand, we are already going through a period of huge changes.

Meanwhile, our cover story this month focuses on a giant landlord Brookfield Property Partnersexamines exactly how its financial statements reflect the decline in the retail and office markets. The questions depend, perhaps surprisingly, on the fact that Brookfield is a Canadian company and therefore not subject to the same standards as US-based companies.

Looking ahead to the declines in shopping centers, Brookfield claims that its main retail portfolio fell by less than 2 percent in the first half of the year.

And in Las Vegas – where the unemployment rate is higher than 15 percent and the Strip was shut down for the first time in half a century – the company actually stated that the value of its investments had hit since the pandemic.

It turns out that Brookfield is not required to hire an external appraiser to determine the value of its properties – the company itself can decide how they will be reserved. While Brookfield claims to use third-party appraisers to value parts of its portfolio, one forensic accountant said The real solution more generally, the shortcomings of the foreign accounting system it uses may be “bullshit” that “is not sufficiently exposed in Canada.” Canada.

Elsewhere in the issue we have “survival guide” for American department store owners, which is exploring some possible solutions to the problems faced by shopping malls. One vendor mentioned using more space for polling stations and community meetings, which does not sound so lucrative.

Finally, for your last election fix, check out our latest coverage of the controversial race in between Joe Biden and Donald Trump. It is hard to believe that when our next issue comes out, we will (hopefully) know who is the country’s president for the next four years.

Enjoy the problem.


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