Hot in the pot! – Trade Observer
Over the past decade, one by one, states have reassessed US federal marijuana restrictions and, one by one, have come to the conclusion that the United States has gone too far in its cannabis regulations and penalties. .
However, even though 37 states (and the District of Columbia) have permitted some form of medical or recreational use of marijuana, the federal government has remained adamant in enforcing laws making weed possession a federal crime and categorizing cannabis as a Schedule 1 drug, like heroin and ecstasy.
Well, since last week, the position of the federal government has collapsed.
On October 6, President Biden announced that he was pardoning some 6,500 people federally convicted of possession of marijuana, reconsidering pot’s status as a Schedule 1 drug, and asking governors to similarly consider mass pardons for those convicted of simple possession.
This comes at an interesting time for the marijuana retail legalization. There is already a flourishing but not exactly street legal weed bodega scene affecting nearly every neighborhood in the city. Let’s face it: these places are “outright illegal,” as we note in Commercial Observer’s story about them. And as the rules are clarified and licenses granted, these stores will likely be harder to start or maintain.
“It’s a tough industry,” said Ryan George of 420 Property. “I would say it’s probably three to four times harder than starting a liquor store, and probably 10 times harder than any other business.”
The fun is over
Despite the feel-good nature of President Biden’s announcement, storm clouds seemed to stalk the week.
Remember how every landlord in commercial real estate did everything they could think of except create giant gingerbread houses to lure tenants into the office? Remember the auditoriums, private gyms and Michelin chefs provide catering?
Well, it’s still a pleasant memory, but that’s for sure is no longer the current case.
Goldman Sachs, for its part, snatched up its free coffee cart. (They take away coffee??) They also cut free meals and car rides to and from the office. And they’re not alone: JPMorgan Chase and Morgan Stanley have stopped giving away free tickets to ball games and tennis matches to their top earners.
This probably represents a transfer of power from the worker to the boss.
“The benefits are hard to take away once people get used to them,” Allison S. Weiss, director and founder of CRE Recruiting, told CO. “Perhaps the pendulum has swung from a candidate-driven market to an employer-driven market.”
Pay attention, owners. Last month work numbers maybe mediocre, but you don’t want tenants to take drastic measures like putting everything in storage while they work out their real estate options. ‘Cause that’s what some companies started doing.
“People didn’t come to the office and companies decided to break their lease or not renew their lease,” said Lior Rachmany, CEO of Dumbo Moving and Storage. “In terms of storage, there’s not a lot back in the office. Day to day, in 2022, we see a lot more downsizing. They hire us to remove furniture and deliver items to liquidation centers or junkyards.
And beyond the benefits, there was some other not exactly welcome news this week.
Remember how tech companies were going to be the thing that would save real estate in New York, and how they-have-more-money-than-god-and-don’t-care-they-have-it?
It turns out there is limits to how much, say, a Facebook will take from a real estate point of view.
Last week Meta, the parent company of Facebook, announced that it was giving up the 200,000 square feet of space it had at 225 Park Avenue South. (While it’s not as bad as it sounds, ownership has always been kind of a stopgap as Meta and Farley rolled out bigger real estate projects,” spokeswoman Jamila Reeves said.)
And, as its riskiest bonds lost value due to default risk, Credit Suisse saw its stock price fall at the start of the week before bouncing back after the bank offered to buy back $3 billion in bonds.
We haven’t even mentioned the court case, downsizing and default values that we saw last week.
Hey, rejoice, people!
Maybe we’re just starving. There is a solution to this. In late September, Urban Hawker, a Singaporean food hall, opened on West 51st Street between Seventh Avenue and Avenue of the Americas and attracted bold names like Eric Adams at the opening.
The following night, thousands of people thronged the Tin Building, the new food hall of the Howard Hughes Corp. that Jean-Georges Vongerichten organized, where people feasted on caviar, sushi, gourmet sliders and Iberian ham.
It’s as if there was a beautiful revival of the New York food hall scene (which naturally suffered during COVID-19).
And in continuation of last week’s string of monster leases, there was a huge one at 1 Court Square in Long Island City, where the New York City Schools Construction Authority took a 20-year lease on 350,000 square feet. (I bet they still get coffee!)
It appears the (somewhat controversial) rezoning request for 2945 Bruckner Boulevard in the Bronx to be rebuilt as 349 apartments is move to city council for a vote after getting approval from the Land Use Committee, so there you have it.
And it’s not like Florida hasn’t had a better week than the last week of September, and that includes real estate!
Cohen Brothers scored $534 million in refinancing for properties in New York and Fort Lauderdale; One Financial Plaza in the aforementioned Florida city signed 17 (!) leases totaling 52,000 square feet, and related companies secured a $242.5 million loan on One Flagler, the West Palm Beach office tower designed by David Childs.
CO’s old friend Jordan Barowitz, a longtime spokesman for the Durst organization, announced that after 16 years he leaves to create his own consulting firm solidify.
To the south (way, way south – Florida south), we learned that Colliers hired Stephanie Rodriguez away from Duke Realty to run his national industrial business. (This comes after Prologis finally closed on its $23 billion acquisition of Duke.)
And, in a surprise gesture, Denis Hickey resigned as CEO of Lendlease’s US office, and handed over the reins to Claire Johnston.
Recharge your battery
Tomorrow is Indigenous Peoples Day, so it’s a good time to rest and let go of your real estate obsession for 24 hours.
Maybe spend it thinking about electric cars instead. Because there is a lot of money allocated to bring much-needed charging stations to various places across the country. A perfect thing to ponder on your leisure day. (Don’t think about the guy who produces all these electric vehicles and what he does with Twitter. Only he knows.)
See you next week!