In 2021, COVID-19 continued to impact commercial real estate transactions in New York City and throughout the United States...
Last year, COVID-19 continued to impact commercial real estate transactions in New York City and throughout the United States. While some sectors quickly rebounded, others continued to struggle. Thankfully, the projected influx of foreclosures and bankruptcies largely never materialized, and the forecast for 2022 is looking up.
Below are some of the commercial real estate developments that we discussed over the past year:
Landlord-tenant disputes: Disputes between landlords and tenants over unpaid rent continued in 2021. Overall, commercial tenants that were prevented from using their leased space due to government-imposed restrictions have had limited success relying on force majeure clauses and impossibility of performance arguments to completely avoid rent obligations. Given improving economic conditions and the uncertainty of how courts will rule, many disputes have been successfully resolved out of court.
Evictions/foreclosures: On May 4, 2021, former New York Gov. Andrew Cuomo signed legislation extending the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 and the COVID-19 Emergency Protect Our Small Businesses Act. The legislation extended the moratorium on covid-related residential and commercial evictions and foreclosure proceedings for those filing a hardship declaration until August 31, 2021. Upon taking office, Gov.Kathy Hochul signed legislation further extending both lawsthrough January 15, 2022.
Rise in lease assignments: While commercial landlords are often reluctant to consent to a lease assignment, COVID-19 has changed everything. With so many businesses struggling to stay afloat, landlords were often more willing to consider the assignment of a lease to add to the prospect that rent payments continue and buildings remain occupied. In this article, we discussedhow the lease assignment works and how both tenants and landlords can protect their legal rights.
Buyer’s market: Due to impact of the pandemic, it is still largely a buyer’s market in New York City, with prices not yet returning to pre-COVID levels in most areas. While it can be tempting to act quickly to close a deal before prices rise, buyers should be sure to engage in a rigorous due diligence process. As we discussed here, failing to conduct due diligence prior to acquiring a New York City residential or commercial property is one of the biggest mistakes that real estate investors make
Reduced tax assessments: One of the upsides of decreased valuations of NYC commercial properties is reduced tax assessments. Building owners and tenants should expect tax rates to remain relatively flat for the next few years.
What’s Ahead for 2022?
Looking ahead to 2022, the commercial real estate market appears poised to rebound, even in the face of the new Omicron variant. Improved demand for both office and retail space is encouraging, with New York City commercial leasing activity increasing 18% in Q2 2021.
As the commercial real estate market recovers from the pandemic, some changes may be here to stay. As we discussed here, even when the COVID-19 pandemic is over, many employees will not be returning to the office. At least, not full-time. The transition to remote and hybrid work models is forcing many businesses to rethink their use of office space, which will impact both inventory and prices. Businesses that are looking for all types of commercial space are increasingly looking for buildings with modern HVAC systems and touchless technology. It’s important for building owners to take these new trends into account to stay competitive.
If you have questions, please contact us
Given how quickly the market and legal landscape continue to change, we encourage landlords, tenants, and lenders to be proactive in following legal updates. For in-depth guidance, we advise you to contact a member of Scarinci Hollenbeck’s NYC commercial real estate practice group at 201-896-4100.
Short Form Merger: Streamlining the Process for Businesses
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, like all M&A transactions, it is important to understand the legal nuances and proper due diligence in mergers and acquisitions. What Is a Short Form […]
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Common Causes of Partnership Disputes and How to Resolve Them
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Businesses Are Facing Financial Headwinds—A Practical Guide
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
President Trump's Termination of Member Gwynne Wilcox
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Breach of Contract Explained: Types and Consequences
Breach of contract disputes are the most common type of business litigation. Therefore, nearly all New York and New Jersey businesses will likely have to deal with a contract dispute at least once. Understanding when to file a breach of contract lawsuit and how long you have to sue for breach of contract is essential […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
