Businesses getting creative as NYC commercial real estate tries to rebound
NEW YORK - Commercial real estate in New York City is deader than ever.
After sitting empty for almost two years, Barneys will be brought back to life--well, kind of--as the space will become a Spirit Halloween. While Saks Fifth Avenue will put in double-time--as the retailer will start offering office space to WeWork, in a partnership known as 'SaksWorks.'
"The Spirit Halloween stores are a great idea because they pop-up and they're there for two or three months--and then they're gone," says Barbara Denham, a Senior Economist with Oxford Economics. "But I know to the neighborhood... they're somewhat, you know, not quite the cachet that Barneys is."
According to Denham, the Spirit Halloween pop-ups do very well and help the economy and the shift away from a brick-and-mortar model was inevitable.
"The whole retail sector was struggling before Covid hit, the shift to e-commerce was building and building and building. And then of course during the pandemic, it just accelerated--so many people were buying clothing, everything, even groceries online. It was a kick while it was down in terms of how the pandemic hit the retail sector. So many stores were closing in 2019 and into early 2020. So this really just kind of almost was the nail in the coffin. Any signs of life in the retail sector are still very positive."
As for SaksWorks, Denham calls the partnership a 'home run.'
"It's a win-win. The demand for temporary flexible office space is very large. A lot of companies, small companies--smaller than say 5,000 square feet, 10,000 square feet--want to discontinue having a lease."
"If there's anything this past year has taught us, it's the value of connection. SaksWorks brings people together by offering stylish and flexible spaces for life, wellness, and work, all under one roof," said SaksWorks President Amy Nelson when reached by FOX 5 for comment. "I'm delighted to lead the team at SaksWorks and share this new concept that brings together work and life in a brand new way."
Denham also believes while the Delta variant may have slowed the rush back to the office, that real estate sector will recover.
"A lot of people want to get back to work. They want to be in an office setting. They want to be with their peers, especially young people. It's not only a part of their work-life--it's part of their social life," says Denham. "And, you know, there's productivity gains for working from home, but there's a lot of productivity gains from working onsite with your peers and seeing them on a regular basis."
According to the Wall Street Journal, Hudson's Bay Company which owns Saks plans to open its first five co-working offices in the NYC area next month.