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Pier 1 to close 450 US stores; tech firms topped NYC office leases in 2019


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Pier 1 to close 450 US stores; tech firms topped NYC office leases in 2019

Commercial real estate

* Home-furnishings retailer Pier 1 Imports Inc. plans to close nearly half of its U.S. stores, along with some distribution centers, The Real Deal reported, citing a filing. The retailer will be closing 450 stores out of a total of around 950 U.S. stores. The retailer did not specify which stores would be shuttered, according to the report.

As of the second quarter of 2019, SITE Centers Corp. had 25 leases with Pier 1, Kimco Realty Corp. counted 30 leases with the retailer, and it comprised roughly 1.1% of First Industrial Realty Trust Inc.'s portfolio tenancy, according to an S&P Global Market Intelligence report.

* Law firm Debevoise & Plimpton LLP leased 530,000 square feet at Tishman Speyer's Spiral development on Manhattan, N.Y.'s far West Side, The Wall Street Journal reported. The deal occurred due to Facebook Inc.'s 1.5 million-square-foot lease at the nearby Hudson Yards, where the law firm was initially negotiating for space.

The publication noted, citing JLL, that the technology sector accounted for more than 5.6 million square feet of New York City office leases in 2019, beating finance firms' total of 5.5 million square feet. The tech industry's increased appetite for Manhattan space that had traditionally been associated with banks and financial firms reflects a change in the city's real estate landscape, according to the Journal.

* New York Gov. Andrew Cuomo announced a proposed expansion of Pennsylvania Station in Manhattan that could see the state take over an entire block to the south of the station to add eight new tracks, the Journal reported. Some of the properties on the block are owned by major landlords, and the governor did not mention a price tag for the project, The Real Deal reported.

* The Long Island City neighborhood of Queens, N.Y., was the borough's top office market in 2019, accounting for eight of the 10 biggest Queens office leases despite losing out on Inc.'s headquarters, The Real Deal reported.

* During the six months since state lawmakers enacted new tenant protection laws in New York, evictions in the city were down almost 20% year over year in the second half of 2019, the New York Daily News reported.

* The 3.3 million-square-foot American Dream mall in East Rutherford, N.J., has secured a nearly 90% occupancy rate ahead of its planned opening in the spring, Bloomberg News reported, citing a filing. When factoring in leases that are under negotiation, the occupancy rate jumps to 100%.

The $5 billion project, more than 17 years in the making, seems to buck the current retail real estate outlook of high vacancies and closures, the news outlet noted. The mall is owned by Canada's Triple Five Group and had a partial opening in October 2019, with its roughly 450 businesses expected to start opening in March. It is counting on its attractions, which include a Nickelodeon Universe park, an ice skating rink and a ski slope, as well as its proximity to New York City, to beat the bleak retail outlook.

* Investment levels in Washington, D.C.'s office market appear to be peaking in the current cycle, partly due to a pullback from international investors, REBusinessOnline reported.

* An affiliate of Comstock Holding Cos. Inc. paid approximately $128.8 million for the nine-story Hartford office building in Arlington, Va.'s Clarendon neighborhood, the Washington Business Journal reported, citing land records filed with the Arlington County Recorder of Deeds. The affiliate, Comstock 3101 Wilson LLC, acquired the property in partnership with Comstock Partners LLC, which is controlled by Comstock Holdings Chairman and CEO Chris Clemente, the report noted.

The 211,450-square-foot building, sold by Heitman Capital Management LLC, is around 90% leased. It previously changed hands in 2010 for $112.6 million, according to the report.

* Bell Partners Inc. paid $91.6 million for a new 222-unit apartment property in Redmond, Wash., the Puget Sound Business Journal reported. The 94%-leased property at 6335 180th Place NE has been renamed Bell Marymoor Park.

After the bell

* Alexandria Real Estate Equities Inc. said it closed the $525.5 million purchase of the Arsenal on the Charles campus in the Cambridge/Inner Suburbs submarket of Greater Boston in December 2019.


* Manhattan has 7,050 newly built unsold condominium units, and nearly 6,000 of the units have not yet been listed for sale, Bloomberg News reported, citing Halstead Development Marketing. The news outlet said the high inventory is troubling at a time when sales of higher-end properties have sharply declined.

With the sales rate seen in 2019, the present inventory could take more than six years to sell. The glut is a result of a construction boom after the recession, and the targeted international buyers are no longer flocking to own luxury Manhattan homes.

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng gained 0.34% to 28,322.06. Nikkei 225 was up 1.60% to 23,575.72.

In Europe, around midday, the FTSE 100 was up 0.11% to 7,583.60, and the Euronext 100 increased 0.12% to 1,157.28.

On the macro front

The international trade report, Redbook, the factory orders report and the ISM nonmanufacturing index are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

Now featured on S&P Global Market Intelligence

Data Dispatch: Investors continue to commit to US real estate ETFs in Q4: Chart Watch: U.S.-focused real estate ETFs accumulated an additional $701.6 million during the recent quarter, bringing total inflows for 2019 to almost $5.82 billion.

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