COMMERCIAL REAL ESTATE IN A TAILSPIN. Akris, a Swiss luxury clothing company, has bought three vacant buildings along Madison Avenue’s retail strip for $45 million or about $1,340 per square foot.
In 2014, at the island’s real estate peak, a building six blocks away sold for $7,589 a square foot.
Akris’s 80-percent discount from peak prices is the neighborhood’s lowest recorded sale price since 2010, according to broker Cushman & Wakefield.
The stock price of SL Green, New York’s largest office landlord, began the year at $88.91; on 16 October, it closed at $47.30. Shares of European office-space owners Derwent London and Inmobiliaria Colonial are trading 27 and 37 percent, respectively, below their portfolios’ listed values.
Even as more employees work from home, corporations still retain office space for meetings and to be close to transport hubs, analysts say, buoying landlords’ outlook for better days after the pandemic ends.
WEWORK SLASHES RENTS. The provider of flexible office space is negotiating rent discounts of up to 50 percent for a few months, reviewing each tenant’s situation and seeing how long they pledge to remain a tenant, to find a workable fee.
The company lost 12 percent of its tenants and 20 percent of its revenue during the first and second quarters of this year.
WeWork has seen its valuation plummet from $47 billion in January 2019 to $2.9 billion on 31 March this year.
YOGAWORKS GOES BUST. The California-based chain will close its 66 studios but will continue online classes and teacher training, the company said.
The company will sell its assets to Serene Investment Management, which will provide YogaWorks with a $3.35-million loan to work through the bankruptcy process.
Founded in 1987, the chain was acquired by Great Hill Partners, an equity capital firm, in 2014 and boasted three million students by 2016.
The fitness industry has been a notable casualty of the economic shutdown, with Gold’s Gym and 24 Hour Fitness among the chains that have claimed bankruptcy protection.
CASINO GOES TO PART-TIME HOURS. The Encore, a Wynn Resorts hotel and casino in Las Vegas, now will be open only from 2 PM Thursday through Monday noon “until consumer demand for Las Vegas increases,” the company said in the announcement.
The hotel’s poker room will still be open seven days a week.
WALGREENS TO CLOSE MORE STORES AMID SAGGING PROFITS. Walgreen’s Boots Alliance, with about 9,000 pharmacy stores in the U.S. and Europe, will close 250 U.S. stores, more than the 200 originally announced.
The company expects the shutdown’s effects to weigh on foot traffic, sales, and profits through the first half of 2021, with gradual improvement in the second half of the year as COVID vaccines become available, said CFO James Kehoe.
AMC DESPERATE FOR CASH. AMC Entertainment Holdings, owner of the world’s largest chain of movie theaters, has reopened 83 percent of its theaters but attendance is averaging 85 percent below last year at those sites, the company reported.
If AMC cannot raise additional funds or fill more seats, it will be out of cash by the end of this year, it warned.
Weak ticket sales, due significantly to social distance requirements that keep 60 to 80 percent of seats empty, has led movie studios to delay the release of major new films, giving audiences even less incentive to go to theaters.
Also, only 48 percent of the company’s U.S. theaters are open, with its cinemas in New York and California still closed. Those two markets made up 23 percent of the AMC’s 2019 revenue.
“We will continue to make decisions on reopening based on the data, science, and when global health experts determine it is safe to reopen without jeopardizing public health,” said a company spokesperson.
The company ran through $230.4 million of its cash in July and August, AMC reported in a recent regulatory filing. It had about $500 million cash on hand at the end of August, enough to carry it into, but not through, November.
AMC’s stock is down more than 51 percent this year and slid 13 percent on 6 October alone.
The company’s woes stem, in part, from its string of purchases, which left it $4.9 billion in debt last February. In 2016, for example, it paid $1.1 billion to acquire the Carmike chain of theaters, which had 276 sites across 41 U.S. states.
This year through 4 October, U.S. movie theater ticket sales had fallen 76.2 percent below last year’s, according to Comscore, a media data firm.
