Home Depot signs lease to take over New York Bed Bath & Beyond space
People wear protective face masks outside Home Depot in the Flatiron district as the city continues Phase 4 of re-opening following restrictions imposed to slow the spread of coronavirus on August 8, 2020 in New York City.
Noam Galai | Getty Images
The home improvement retailer has signed a lease for a Gazit Horizons-owned asset on Manhattan’s Upper East Side, at 410 E. 61st St., which spans more than 120,000 square feet over four floors.
Bed Bath & Beyond’s current lease expires in 2021. The deal by Home Depot marks one of the largest retail leases, by both size and total annual rent, on record to have been reached in Manhattan in recent years.
Home Depot will be paying roughly double in rent what Bed Bath & Beyond was paying, according to a person familiar with the terms of the deal.
“We signed the lease in April,” Jeff Mooallem, president and CEO of real estate company Gazit Horizons, said in an interview. “The biggest hang-up in the deal was neither party knew what it would cost to retrofit this. … Both of us needed to do some due diligence to see if the deal was even achievable from a structural stand point.”
“The reports of retail’s death in New York City have been greatly exaggerated,” he added. “The execution of this lease, at the peak of the Covid-19 pandemic, is an important sign of confidence in New York.”
In the midst of a multiyear turnaround plan, Bed Bath & Beyond has said it will close 200 of its namesake stores in the next two years. It has released the locations for roughly 60 shops that will close by the end of 2020, including the Upper East Side store. It still operates a handful of other locations in Manhattan, including on the Upper West Side.
Meantime, the retail real estate market in New York has been hit hard by the coronavirus pandemic, as it has in much of the rest of the country, with tenants unable to pay rent or being forced to vacate properties entirely.
Average asking rent for retail space in New York fell during the third quarter of 2020 for the 12th consecutive period, to $659 per square foot, down 12.8% year over year, according to data from commercial real estate services firm CBRE.
Home Depot currently has two locations in New York City, one in the Flatiron neighborhood and one in Midtown.
A representative from Home Depot did not immediately respond to CNBC’s request for comment.
Both Home Depot and Gazit Horizons, which is the North American subsidiary of Israel-based Gazit Globe, were represented by commercial real estate services firm Ripco.
Comcast says Universal theme parks could break even in 2021
A visitor takes a selfie at Universal Studios theme park on the first day of reopening from the coronavirus pandemic, on June 5, 2020, in Orlando, Florida.
Gregg Newton | Getty Images
Comcast CEO Brian Roberts said theme parks may have been “the single biggest drag” on NBCUniversal’s quarter, but executives are optimistic the division will break even in 2021.
Amusement parks were one of many industries that were battered by the coronavirus pandemic, particularly due to forced closures and limited capacity restrictions upon reopening. Revenue for Comcast’s theme parks revenue fell nearly 81% in the third quarter, to $311 million, the company reported Thursday.
Overall, CNBC’s parent company reported third-quarter earnings that beat analyst estimates on the top and bottom lines.
For now, Comcast has only been able to open its parks in Florida and Japan. Its California-based park will not be able to resume operations until Los Angeles County reaches a coronavirus infection rate of less than 1 case per 100,000 residents. It’s seeing 11 cases per 100,000, up from 10.1 a week ago.
The company is also gearing up for the opening of a new theme park in Beijing by summer.
Comcast will also face tough comparisons at its parks in the next quarter, in part because annual Halloween Horror Nights events are canceled this year. This would have been the event’s 30th anniversary.
Halloween Horror Nights take place after traditional park hours and require a separate ticket purchase. So Universal was making money from guests who visited during the day and those who ventured out after sundown.
Last year, Halloween Horror Nights helped boost fourth-quarter revenue for theme parks to $1.6 billion, up 3.2%.
NBCUniversal head Jeff Shell said the theme parks business is typically quite successful, but Covid-19 has weighed heavily on operations.
“I really feel that parks are going to be very strong business,” Shell said about the segment’s recovery. “Nobody can tell the pace of how that’s going to go given what’s happening, but so far, we’re rebounding fairly nicely in Florida and Japan where we’re open.”
Disclosure: Comcast is the parent company of CNBC.
Vast migration of over 14 million Americans coming due to remote work
A whopping 14 million to 23 million Americans are planning to relocate to a new U.S. city or region due in part to the growing acceptance of remote work, according to Upwork’s Remote Workers on the Move report released Thursday.
The survey of 20,490 Americans over the age of 18 was conducted Oct. 1 to Oct. 15.
The vast migration driven by the pandemic comes after many companies such as Facebook announced plans to permanently shift jobs to remote work and hired a director of remote work in September to help in the transition.
Companies of all sizes are following this path including small businesses. According to a recent survey from Intermedia, 57% of small and medium-size businesses plan to offer remote work plans to employees for the long term. What’s more, SMB owners have observed that employee availability has increased by 19% by shifting to remote work. They learned the advantages of having remote work policies during the pandemic. Among them: lower operating costs, increased employee availability and job satisfaction.
“Companies were thrown feet first into a massive experiment with remote work due to the pandemic. The experiment has gone well; and it’s changing the future of the workforce,” says Adam Ozimek, Upwork’s chief economist. “Remote work is the fastest gamechanger for the U.S. economy since World War II when almost overnight there was a mobilization of production to provide arms for war.”
The emerging trend has dramatic implications for local and state economies. “Big expensive cities may see financial crunches,” says Ozimek. “There could be tax hikes and a big impact on house prices.”
But the rise in geographic mobility points to an expected increase in economic efficiency for businesses — and the individual. “Remote work presents a potential solution for those seeking job opportunities that don’t want to pay the high housing costs of a major city,” Ozimek points out. “As our survey shows, many people see remote work as an opportunity to relocate to where they want and where they can afford to live. This is an early indicator of the much larger impacts that remote work could hav