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New York City real-estate market shows signs of hope

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New York City real-estate market shows signs of hope

New York City’s pandemic-battered property world resembles a nerve-wracking “seesaw” of “flights and drops,” as Henry James wrote of his neurotic protagonist’s mood in “The Turn of the Screw.” With any luck, Gotham will come through in better shape than James’ tragic heroine.

On the dark side, office towers hit a near-historic high vacancy rate of 15 percent, and remain 85 percent physically unoccupied. Investment sales have grounded to a halt. The Partnership for New York City, in a new report, says that companies are so eager to leave that states including Florida, Texas, North Carolina and Maryland “have established aggressive programs to recruit talent and attract jobs from New York . . . literally every New York employer is being courted.”

Retail’s a disaster and might worsen. Ominously, 90 percent of restaurants didn’t pay their December rent, according to the New York City Hospitality Alliance — raising the prospect that thousands more dark eateries will soon swell the vacancy plague.

And yet . . . and yet. Signs of underlying stability and renewed energy are increasingly common. Apartment sales are up, especially in Brooklyn. Stimulated by reduced rents, more Manhattan rental leases were signed in December than for the month in a dozen years, according to Douglas Elliman and analyst Jonathan Miller — although vacant units remain at a near all-time high.

Investment and residential sales of $6 billion in January 2021 saw a 38 percent jump over January 2020, the Real Estate Board of New York found — yielding the city and state $190 million in badly needed transfer-tax revenue, 31 percent more than in the previous January.

Downtown Brooklyn’s MetroTech has clocked renewals totaling 132,000 square feet since the start of the fourth quarter of 2020. The signings — including for SoulCycle and HeartShare Human Services of New York — reflect the complex’s evolution under new owner Brookfield from mostly a banking back-office into a destination for tenants as diverse as Slate and Think! Architecture and Design. MetroTech’s 5.5 million square feet are now 91 percent leased.

Concrete evidence of overall market stability also permeates Vornado Realty Trust’s just-released 10-K annual SEC filing for 2020 and its fourth-quarter earnings call last week.
The giant developer/landlord saw a net loss of $209 million for the quarter, compared with net gain of $193 million the year before. But it’s typical of results for publicly-traded REITS during the pandemic.

CEO Steve Roth noted in the call that Vornado closed on $1 billion of apartments at 220 Central Park South — “a big number which was added to our cash balances and enhanced our financial strength.” His company is spending more than $1 billion to redevelop the Farley building — where Facebook signed the largest office lease of 2020 at 750,000 square feet — and the Penn 1 office tower “off our balance sheet without debt.”

Vornado CFO Michael Franco said on the call that even “with post-COVID leasing activity down dramatically, we still leased 2.2 million square feet and 54 separate leasing transactions in New York” in 2020.

Starting rents remained strong at $89.33 per square foot, and the average lease term was for 14.4 years, Franco said.

The year ended with Vornado’s Manhattan office occupancy at 93.4 percent. Despite anecdotal tales of widespread rent holdouts, Vornado collected 95 percent of owed rents in the fourth quarter — 97 percent including rent deferrals from office tenants and 88 percent from retail tenants, according to the 10-K.

Meanwhile, SL Green, the city’s largest commercial landlord with interests in 29 million square feet of offices, reported similar strength in its fourth-quarter results.
The REIT collected 97.9 percent of office rent and 80.8 percent of retail rent for the entire year of 2020.

Even in a low-demand market, SL Green properties saw 464,000 square feet of deals in the fourth quarter and 1.25 million square feet for the full year. The most recent major commitment was Beam Suntory’s lease for 100,000 square feet at 11 Madison Ave., with a starting rent of around $90 per square foot.

Beam Suntory will move its US headquarters to New York from Chicago while keeping some space in the Windy City — a sign that companies still see value in being here.
There might even be hope that office workers will return to their desks this year. The widely followed Kastle Back-to-Work Barometer reports an uptick in physical office occupancy last week from 13.3 to 14.7 percent. The needle’s been stuck for months but could start to move with increased vaccinations and a renewed sense of public safety.

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El Salvador volcanoes to power bitcoin mining

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El Salvador volcanoes to power bitcoin mining

Bitcoin is red-hot in El Salvador — and the country says it plans to use power from its volcanoes to mine it.

El Salvador President Nayib Bukele — just hours after the country’s legislature approved the “Bitcoin Law,” making it the first to accept Bitcoin as legal tender — revealed Wednesday that the nation’s state-owned geothermal electric company will harness volcanic energy to mine the cryptocurrency.

Bukele said the country is already designing a mining hub that will use “very cheap, 100% clean, 100% renewable” energy from volcanoes to power the operation, which effectively would be a bank of super-powered computers that solve the complex mathematical equations required to mine Bitcoin.

“Our engineers just informed me that they dug a new well,” Bukele tweeted, saying it would generate 95 megawatts of energy — enough to power more than 500 homes for a year. “What you see coming out of the well is pure water vapor.”

Bukele — who is looking to lower transaction fees on the $6 billion in yearly remittances sent to its citizens from abroad — has yet, however, to reveal when the new operation will be live or how many Bitcoins he expects to be able to mine.

It’s been a bullish week for Bitcoin in El Salvador. The digital coin can now be used as payment for goods, services, and taxes in the public and private sector. Bitcoin rose 6 percent on the news, according to data from Coindesk.

According to a study by Cambridge University, Bitcoin mining consumes more energy per year than the Philippines. Elon Musk has met with Bitcoin miners about environmental concerns, recently citing them as he announced Tesla would no longer accept Bitcoin as payment.

Details about the mining efforts and how El Salvador will widely adopt Bitcoin remain vague. The law states it will provide “the necessary training and mechanisms” to allow the 70 percent of its citizens that don’t have access to traditional banking services to understand how they can use Bitcoin but didn’t elaborate.

Still, Bukele remains an enthusiastic advocate for the currency and his mining project. Late Thursday he tweeted drone footage of the new mine with a rainbow in the background.

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China arrests 1,100 crypto users on money laundering charges

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China arrests 1,100 crypto users on money laundering charges

China’s crackdown on cryptocurrencies is heating up with a series of arrests that suggest digital currency users can be traced.

More than 1,100 people who allegedly used cryptocurrencies to launder profits from frauds were arrested Wednesday, the country’s Ministry of Public Security said in a statement. 

The busts involved 170 criminal groups who authorities say hired “coin farmers” to open crypto accounts after bank accounts they used for their alleged scams had been seized.

“The high illegal income attracts a large number of people to participate, causing serious social harm,” the ministry said of the alleged plots.

The arrests may cast further doubt on the supposed un-traceability of cryptocurrencies. On Tuesday, the price of bitcoin fell almost 12 percent after it was revealed that US authorities were able to reclaim most of a bitcoin ransom that Colonial Pipeline paid to hacker group DarkSide in May. 

“Criminals have been using bitcoin because of the supposed inability of governments to get at it,” Anthony Denier, CEO of trading platform Webull, told the Post on Tuesday. “If governments can claw it back, that hurts its appeal.” 

Wednesday’s arrests are part of a broader Chinese crackdown on crypto. They come less than a month after the government called for greater regulation of digital currencies.

A committee presided over by a member of China’s Politburo wrote in May that it is necessary to “crack down on bitcoin mining and trading behavior, and resolutely prevent the transmission of individual risks to the social field.” 

Worries about bitcoin’s traceability and the looming threat of government regulations have sent the cryptocurrency plummeting from its peak of more than $63,000 in April. Bitcoin was trading at about $37,600 Thursday morning. 

Additional reporting by Will Feuer

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Burger King flambes Chic-Fil-A online, donates to LGBTQ foundation

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Burger King flambes Chic-Fil-A online, donates to LGBTQ foundation

They just served them a double whopper.

Burger King may have lost the restaurant-chain battle, but they’re charging ahead in the sandwich wars: The burger monger flame-broiled queer-rights critic Chick-fil-A in a Pride Month tweet in which they pledged to donate the proceeds from their new chicken sandwich to an LGBTQ charity. The provocative post currently boasts over 7,000 likes online.

Burger King tweeted last week that 40 cents from every one of their new hand-breaded Ch’King sandwiches sold during June will go to the Human Rights Campaign, which is the world’s largest LGBTQ-rights organization, Fox News reported. BK will contribute up to $250,000, according to the tweet.

The patty purveyor doubled down with a shot at Chick-fil-A, writing that the deal is good “even on Sundays,” when the devoutly Christian chicken chain shuts its doors.

The verbal whopper comes after years of opposition to Atlanta-based Chick-fil-A, which contributed millions to organizations that opposed same-sex marriage. In turn, that got the restaurant banned from several airports and schools across the country.

In 2019, Chick-fil-A announced that it would no longer donate to the Salvation Army, the Fellowship of Christian Athletes and other groups that have been criticized for their stances on LGBTQ issues.

BK is surely hoping the charitable act will help give the chain a leg up in the ongoing battle for chicken-sandwich dominance, which Chick-fil-A is currently winning in terms of total sales.

The chicken-driven competition began in 2019, when Popeyes’ new sandwich sold out at many of its stores after just two weeks on the menu. 

Since then, the largest US fast-food chains, from KFC to Wendy’s, have introduced new chicken-laden menus or announced plans to do so.

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