Century 21 files for bankruptcy and will close
all stores, including New York City locations
BY TIMOTHY BOLGER
Century 21 Stores, the New Yorkbased
discount department store,
is closing all 13 of its locations
nationwide, including its six New York
City locations.
The nearly 60-year-old company fi led
for bankruptcy in Manhattan federal court,
blaming insurers for non-payment of $175
million it says was due under policies after
business was interrupted by the coronavirus
pandemic.
The clothing brand has six locations in
New York City: two in Brooklyn at 472
86th Street and 445 Albee Square; three in
Manhattan at 21 Dey Street, 22 Cortlandt
Street and 1972 Broadway; and one in
Queens at 61-35 Junction Blvd, Rego Park;
as well as two on Long Island in Westbury
and at Green Acres Mall in Valley Stream.
“While retailers across the board
have suffered greatly due to COVID-19,
and Century 21 is no exception, we are
Shoppers leave the Century 21 department store in New York on March 1, 2002.
confi dent that had we received any meaningful
portion of the insurance proceeds,
we would have been able to save thousands
of jobs and weather the storm, in hopes of
PHOTO BY REUTERS/CHIP EAST CME.
another incredible recovery,” Century 21
co-CEO Raymond Gindi said.
Besides New York, Century 21 also has
stores in New Jersey, Pennsylvania, and
Florida.
The news comes after Lord & Taylor,
the oldest department store in the United
States, announced last month that it’s also
closing all of its stores after it fi led for
Chapter 11 bankruptcy on Aug. 2, the same
day as Men’s Wearhouse owner Tailored
Brands.
In the U.S., several big name brands,
including storied U.S. retailers such as
Neiman Marcus, Brooks Brothers, and J.C.
Penny, which is also closing LI locations,
began restructuring relatively soon after
the crisis erupted.
Apparel retailers have been among
the worst hit from the coronavirus crisis
as their businesses were considered nonessential
and their stores had to be closed.
They were forced to limit operations to
online, which led to furloughing of staff
and unpaid leases and rents.
For more information about Century 21’s
going-out-of-business sales, visit c21stores.
com.
BY HERBERT LASH
REUTERS
New York is facing a glut of workspace
as fear of COVID-19 has
reduced the daily usage of offi ce
buildings to almost nothing, a devastating
sign for a city already reeling from the highest
unemployment rate among the largest
U.S. cities.
Manhattan’s density and sea of skyscrapers
together hamper a return to the offi ce
on the island and that is unlikely to change
until a vaccine allows the subway and elevators
in offi ce towers to run at full capacity.
Just 8% of employees have returned to
Manhattan offi ces as of mid-August, the
Partnership for New York City, a non-profi t
of nearly 300 chief executives, found in a
survey of major city employers. The real
estate industry is the most aggressive in
returning, with 53% already back, the
partnership said.
“The economy and people’s sense of
their health go in lock step,” said Michael
Cohen, president of the tri-state area at
brokerage Colliers International Group
Inc <CIGI.TO>.
“Until people feel safe enough to go back
to the offi ce, you can stand on one leg and
spit nickels – they’re not going to revive this
economy,” he said.
An increase in subletting and short-term
lease renewals to more than 70% of deals
shows management is uncertain about a
company’s real estate needs after the success
of working remotely.
New York office glut signals
market downturn as COVID bites
The Empire State Building and Middle Manhattan are picturedfrom Weehawken,
New Jersey U.S. June 7, 2020.
Subletting now makes up more than
25% of space availability in two of Manhattan’s
three submarkets, a level where
supply outstrips demand, and at 23% for
the island’s entire market, is at the highest
level since 2010, Colliers said.
Average asking rents continued to climb
to records in the fi rst quarter when they
peaked in Manhattan, and have since
declined $2.03 per square foot to $78.01
in August.
PHOTO BY REUTERS/EDUARDO MUNOZ/FILE PHOTO
Signs of increased subletting and its
pressure on prices appeared relatively
late compared to past recessions because
brokers could not show clients offi ce space
until late July.
Leasing activity in August was almost
64% lower than the average monthly volume
of 3.58 million square feet last year,
according to Colliers.
“It’s no surprise that many tenants are
seeking short-term lease extensions and are
hesitant to make any long-term commitments
towards their offi ce space needs,”
said Craig Bender, head of commercial real
estate Americas at ING.
“This situation is going to persist until
there is a clear path forward beyond the
pandemic,” he said.
The downturn is not unique to New
York and can be seen in the price of real
estate investment trusts (REITs) that invest
in East and West Coast offi ce buildings.
While the stock market has climbed more
than 55% from the depths of the sell-off in
March, the share price of offi ce REITs have
basically fl atlined.
The market capitalization of office
REITs that invest in mostly large coastal
U.S. cities is about half what it was in
mid-February when concerns about a
coronavirus-induced recession drove investors
to dump equities across the board.
The value that companies put on their
offi ce space is lower than it used to be,”
said Scott Crowe, chief investment strategist
at CenterSquare Investment Management
in Philadelphia.
Cohen, like other executives involved in
commercial real estate, doubts working remotely
will become predominant as people
will want to be near the boss as they look
to step up the corporate ladder.
Schneps Media Sept. 17, 2020 3