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bed bath beyond

Empty Bed Bath & Beyond Stores Are Hot Commercial Real Estate Opportunities

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Commercial real estate retailers are seeing a major rise in available spaces due to the influx of empty Bed Bath & Beyond stores. 

When superstore retailers go out of business, other companies have the chance to take over the space for a faster turnaround due to its larger size. For example, Burlington Stores CEO Micheal O’Sullivan stated that some of their best stores were created “from carved-up Kmart or Sears locations.”

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Burlington has also already taken over 44 former Bed Bath & Beyond locations. According to CNN, this is the first holiday season in more than 50 years where there won’t be any physical Bed Bath & Beyond stores. The chain went out of business earlier this year, and closed its last 360 stores in what’s been referred to as the largest retail bankruptcies in years; 120 buybuy BABYs also closed down.

Overstock.com bought the Bed Bath & Beyond brand and transitioned it to relaunch exclusively online. The relaunch also included the famous 20% off coupons from the former retail giant. 

As the hundreds of empty Bed Bath & Beyond stores are continuously being auctioned off, the industry has realized how valuable these spaces are for real estate opportunities. 

According to CNN, Burlington, Michaels, Barnes & Noble, Macy’s, Homegoods, and many other chains have already replaced old Bed Bath & Beyond stores. Some of the vacant spaces have even been taken over by recreational services such as pickleball courts, bowling alleys, and trampoline parks. 

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While the retail industry itself has been slowing down as of late, the vacant Bed Bath & Beyond locations are a hot ticket item for retailers and other developers due to an overall lack of big box store spaces to move into. In fact, there hasn’t been a major increase in new retail spaces since the financial crisis in 2008, CNN reports, especially with the rise in online shopping. 

“Bed Bath & Beyond spaces have been grabbed up swiftly at rents of up to 50% what Bed Bath & Beyond was paying. Landlords are taking advantage of the vacancies, with some dividing former Bed Bath spaces into smaller sizes,” said Brandon Isner, CBRE’s head of retail research for the Americas.

“There is little to no concern that any of the spaces will go vacant for long,” he said.

Kimco Realty, a real estate owner with 26 former Bed Bath & Beyond leases, said that “new leases were 38% higher than Bed Bath & Beyond rents.” 

“We have a very strong real estate team that has a lot of experience dealing with retail bankruptcies,” Burlington CEO Michael O’Sullivan said. “Many of our most successful and productive stores today were once upon a time Circuit City, Toys R Us, Sports Authority, Linens ’N Things.”

Shakespeare

Development Of Now Open Luxury Residential Tower In London Led To Discovery Of Shakespearean Theater

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A new £750 million complex of 412 apartments in a 37-story development named ‘The Stage’ has officially opened in London. The project itself, however, initially made headlines during its development, when archaeologists discovered the remains of a 16th-century Shakespearean theater during excavations.

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What’s Happening With Governor DeSantis’ Ban On Chinese Homeownership In Florida?

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In May, Republican Governor Ron DeSantis of Florida signed a bipartisan law, SB 264, which banned certain Chinese nationals from buying property within the state as a means of avoiding “the malign influence of the Chinese Communist Party in the state of Florida.” 

According to reports from NBC, a group of Chinese immigrants that are backed by the American Civil Liberties Union and additional civil rights groups, have been working to invalidate the new law, and the Justice Department even backed their effort in an official court filing this summer. The Justice Department stated that the law is unconstitutional, however, a judge ruled against that challenge back in August and settled with an appeal. 

Many workers within the real estate industry have stated their disdain for the law, claiming that it’s ambiguous and is fueling a major risk for discrimination against Chinese buyers. According to the law, sellers who violate the restrictions knowingly could face up to $1,000 in fines and one year in prison while Chinese nationals who buy property in Florida face up to 5 years in prison and even higher fines. 

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Khalid Muneer of the Greater Orlando chapter of the Asian American Realtors Association recently spoke to the media regarding the discriminations and difficulties this law created. 

“Are we supposed to be FBI agents investigating people and asking them all kinds of questions?”

A veteran Florida real estate agent, Frank Lin, told the media that his business has been cut in half due to the fact that he has to turn down clients to comply with the law. 

Additionally, Chinese nationals who already own property in Florida “are required by the new law to register with the state’s Commerce Department, but they don’t even have a form yet or place or website, so that’s confusing everyone. Failure to register by 2024 could trigger fines of up to $1,000 a day,” Lin said. 

According to a Florida Commerce Department spokesperson, “a hearing is set for this week over a proposed rule on the registration requirement, the agency is dedicated to implementing SB 264 as outlined in law.” 

Muneer spoke further on the discriminations that this law has created and the potential hostility it could create. 

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“If somebody comes in and is Asian-looking, you’re automatically going to start asking questions about where you’re from, which never used to happen.”

Many Asian American community members are viewing the Florida law as resembling xenophobic “alien land laws” of the early 20th century, which were later deemed unconstitutional. 

The restrictions of the law cover both commercial and residential properties and apply to all Chinese nationals who aren’t US citizens or permanent residents and/or already owning property in China. 

“If somebody comes in and is Asian-looking, you’re automatically going to start asking questions about where you’re from, which never used to happen,” said Khalid Muneer, founder of Jupiter Properties in Central Florida and president of the Greater Orlando chapter of the Asian American Realtors Association.

“Is this racism? Is this stereotyping? We are very well aware of the fact that we can have issues. We can be accused of discrimination. Some of [my] associates with heavily Chinese or Venezuelan clientele have seen a major, major drop in business,” Muneer said.

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In recent months, some of the realtors are afraid to deal with [Chinese nationals] because they are looking at getting prosecuted for ‘not doing their job.’ But then again, are we supposed to be FBI agents investigating people and asking them all kinds of questions?” Muneer continued. 

“The law is upending peoples’ lives.”

Florida in general receives about 23% of all foreign buyers throughout the US, the highest percentage of any state, according to the National Association of Realtors. 

NBC reported that “five percent of Florida’s closed sales were to foreign buyers, according to a separate report from Florida Realtors. However, the bulk of Florida’s foreign buyers are Latin American, at 46%, and Canadian, at 24%. Among Chinese buyers, California is the most popular destination, drawing 33% of Chinese buyers to Florida’s 16%.”

“When you get a situation like this, where your main cash buyers are not allowed to buy, it does start hurting the market as well as sales agents who will depend on those sales for their living,” Muneer stated. 

Gregory Burge, an economist, said “ownership bans like Florida’s don’t make a lot of sense from an economic standpoint. Top talent coming from these nations would certainly involve families wanting to retain their citizenship in their home countries, and then facing the barrier of buying in Florida under the new law,” he said. “That could act as a negative factor for slowing economic growth.”

NAR

Online Real Estate Broker, Redfin, Leaves The National Association Of Realtors

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The online real estate brokerage, Redfin, is now requiring many of its agents to cancel their memberships with the National Association of Realtors (NAR) brought on by allegations of sexual harassment from the association, and other problems within the organization.

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construction

NYC Architects Are Adding More Floors To Skyscrapers To Convert Empty Offices Into Apartments 

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New York City real estate is still recovering from the shifts in work from home culture that increased during the pandemic. This shift left many commercial real estate properties vacant. Now, architects and developers are converting these empty office spaces into housing. 

According to Business Insider Magazine, real estate development and investment firm the Vanbarton Group and architecture firm Gensler are currently finishing up a 1970s office tower on Water Street in lower Manhattan to become 586 apartments. 

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For most of the estimated 96 million-square-feet of vacant office spaces in New York City, it would be too expensive, or illegal, to turn into housing, however, in some cases it’s very doable. 

One of the biggest challenges is the lack of air flow and light in the center of many of the larger commercial spaces, as well as a lack of windows available for apartments, which could lead to pricey renovations. 

For the projects on Water Street, Vanbarton described that they needed to cut holes in the center of buildings, add new floors, and replace all of the windows to make the spaces livable. 

“There was essentially dead space at the back of these units, and so instead of adding that to the unit and creating these extremely long units, we took that out and then put it elsewhere in the building where it made much more sense,” Joey Chilelli, Vanbarton’s managing director, told Insider.

“The blind shafts were “probably the biggest planning challenge in the project. We couldn’t just wall it off and leave the floor slab. We had to physically remove the floor slabs so that it became a true shaft,” Robert Fuller, a principal at Gensler who led the design of 160 Water, said.

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Insider also reported that the team placed lateral reinforcements within the building to support the new floors they built. 

“The alternate to that would have been to reduce the size of the overbuild, but then you’re losing square footage. Most developers are not looking to lose square footage if they can avoid it. So it’s a cost-benefit analysis that the client has to do during design,” Fuller said. 

Fuller went on to discuss the potential opportunities in the financial district and midtown Manhattan for future developments like the one on Water Street. 

“Any good designer embraces that challenge, trying to come up with creative solutions. At first blush it would be easy to look at a building like 160 and say, ‘Oh, it doesn’t work. The floor plate is too deep.’ But we were able to come up with a solution,” he said.

“It really does breathe new life into these buildings. You’re creating this buzz and this new life, and you might have 1,000 or more residents and the effects of that on this street, this corner, this neighborhood and the amount of foot traffic as well as other retail activity — it really boosts the area and changes the streetscape,” Chilelli said.

development

Real Estate Developer Evergrande’s Bankruptcy Could Lead To Housing Crisis In China 

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Evergrande was known for decades as one of China’s most successful real estate developers, however, as China’s economy struggled within the past few years, the developer acquired debt, leading to their bankruptcy in the US. 

The demand for housing in China was so strong that builders would pre-sell apartment units before they completed construction. Shifts in policies in China within the last two years have also left property developers without a lot of money, leading to a lot of risky financial decisions. 

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In 2021, the central government tried to curb excessive borrowing to slow the rise of home prices, which led to the removal of funding for property developers. Evergrande acquired $300 billion in liabilities, which it wasn’t able to pay, leading to market panic. 

Building and construction was then suspended for dozens of projects, leading to many buyers who pre-purchased housing with no new home and a mountain of debt. 

Evergrande filed for Chapter 15 bankruptcy last Thursday, which is a way for foreign companies to utilize US bankruptcy laws to restructure their debt, which takes time and Evergrande has around $19 billion in offshore debts.

The next step for the developer will be to restructure those billions of dollars in offshore debts which could have a major impact on the financial system in China. 

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Other large builders and developers in China have also been struggling to cope with the now low demand for housing.

China’s property and housing market accounts for around 30% of the nation’s economic activity, as well as two-thirds of general household wealth. 

The “zero Covid” strategy in China has also hindered its economic growth, leaving many potential buyers skeptical when it comes to buying new homes and investing in real estate in general. Unemployment levels are also on the rise while property values fall. 

Beijing has worked to increase demand for housing and provide cash for developers in need, however, it’s not nearly enough, and state-funded bailouts seem to be on a massive decline in general. 

“We must maintain historic patience and insist on making steady, step-by-step progress,” President Xi Jinping said in a recent speech.

Americans Are Moving Further Away To Afford Homes

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Americans are moving further away from their original homes in order to find properties that are more affordable, according to the National Association of Realtors (NAR).

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How AI Is Helping Potential Homeowners Find The Best Time To Buy Their Dream Home

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According to a recent survey, approximately 12% of people are planning to buy a home this year, which when compared to other averages, is low. The same survey concluded that the remaining 27.19% of typical potential buyers are holding back due to an inability to find a home in their price range. This, however, could change with the utilization of Artificial Intelligence.

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homes

The Netherlands Introduces Restrictions On Investors, Making Homeownership More Accessible 

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Some of the Netherlands largest cities have introduced restrictions on investors from renting out the real estate they buy as certain neighborhood populations change, increasing rent while house prices remain the same. 

As a means of making homeownership more accessible for middle-income households, the “Opkoopbescherming” (purchase protection) law strongly discourages investors from buying real estate, and states that any property with a value below a cap set by municipalities can’t be leased for four years after its purchase. 

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More than a year after this policy started, housing prices have yet to drop while rent prices are increasing with a smaller supply available. 

One of the main reasons the law was passed in the first place is because concerns were growing about investors driving up the real estate market by out-pricing home-buyers, and decreasing the livability in neighborhoods because tenants are more likely to stay for shorter periods of time.

According to Statistics Netherlands, house prices in the Netherlands have been regularly increasing, and prices of Dutch real estate grew by 13.4% in 2022, adding to a 15% growth from 2021. 

While the policy was drawn up at a national level, it’s up to municipalities to decide whether to implement the law. All Dutch cities with more than 200,000 residents introduced the investment-restriction policy in 2022. 

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The study regarding this law overall found that residents in the Netherlands would have a higher chance of buying homes in areas where real estate investors were not included. Nationwide, around 2,000 homes were sold to buyers, which otherwise would have been sold to investors. 

The research on the new law also showed, however, the absence of real estate investors hasn’t impacted rising home prices, meaning their investments may not contribute to price rises. 

According to Newsendip, Matthijs Korevaar, Assistant Professor at the Erasmus School of Economics, said that “investors usually have a more solid financial background – larger borrowing capacity, no resolutive conditions, etc. – which can give them an advantage in front of sellers compared to household buyers who need a high mortgage. Investors would pay similar prices but have better chances of buying a house thanks to their finances.”

The study also suggested that the ban on investors in certain areas has more so impacted the populations of a given neighborhood, as renters are normally younger, and homebuyers in the area are more often older and wealthier. 

pride house

LGBTQ+ Real Estate Alliance Celebrates Pride Month 

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The LGBTQ+ Real Estate Alliance is celebrating 2023 Pride Month with a wide variety of events, meant to educate the community on home owning opportunities, as well as showcase the community within the real estate industry.

On June 8th and the 29th, the Alliance is offering two sessions on their Alliance Certified Ally course. Led by director of education Alex Cruz, the sessions are meant to help participants learn about the LGBTQ+ community and how to better interact with, and find properties for, individuals in the community. 

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The course is meant to give professionals a deeper understanding of the struggles and discriminations members of the community face, and how they can be the best ally in terms of real estate. 

“Pride Month is incredibly important to the LGBTQ+ community, and so much of what occurs this month comes from the allies who care about us,” said Erin Morrison, national president and chair of the board of the LGBTQ+ Real Estate Alliance. 

“This month around the globe, millions will attend parades and events, and in most cases experience a genuine outpouring of love and support. Pride Month also allows the LGBTQ+ community to reflect on how far we have come in societal acceptance,” she explained. 

“But the reality of today’s environment, where there are more than 700 anti-LGBTQ+ bills being discussed, voted on or passed in statehouses around the nation, we are reminded of the fight we are still engaged in for basic civil rights.”

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“It’s also critically important for all of us in real estate to remember that sexual orientation and gender identity are still not protected classes under the 1968 Fair Housing Act leaving the LGBTQ+ community susceptible to housing discrimination,” Morrison concluded. 

Another event on June 22nd will showcase “LGBTQ+ Leaders in Real Estate. According to RIS Media, “Farrah Wilder, an Alliance member and former vice president of Diversity, Equity and Inclusion for California REALTORS®, will host the program, which allows LGBTQ+ people in real estate to share their perspectives and experiences as ‘out’ leaders in the industry. Guests include: 

Tommie Wehrle, chair of Anywhere LGBTQ+ ERG group and Alliance National Treasurer, Jennifer Green, director of DEI for Mortgage Investor’s Group. Ryan Adams, VP of government affairs for Birmingham REALTORS, and Cody Gilkeson, head of DEI for eXp Realty.”

To learn more about the multitude of events the Alliance is holding, and to register for any of them, check out their official Pride Month event calendar!