Retailers across New York City are closing, and amid the uncertainty and the layoffs, landlords are now faced with the choice of cutting their tenants loose, forgiving the rent or putting their faith in the government and insurance to pay them back down the road.

Restaurants and bars in New York City can now only serve takeout, while gyms, movie theaters and casinos have all been ordered to close. Thursday, Gov. Andrew Cuomo announced a new rule that requires companies to only allow 25% of their staff in the office, with some exceptions for businesses he has deemed essential. 

Stores, though not legally forced to shut their doors, have been closing across the city — putting both landlords and retailers in a precarious position. Both are hoping that insurance companies will pay out or the government will step in with some sort of relief in order to blunt the economic pain.

“We are listening and tell them we are in it with them,” said Marx Realty CEO Craig Deitelzweig, whose company owns about 200K SF of retail space in the city. A few tenants have reached out, he said, but it is too early to say what course of action the company will take.

The retail market was already deeply strained in New York City, with widespread vacancies and multiple bankruptcies forcing closures. Retailers and landlords had been banking on a brighter 2020, with rents starting to come down and experiential and digital-native brands entering the market.

But the impact of the pandemic has been as brutal as it has been swift. Major national retailers like Macy’s, Nordstrom, Bloomingdale’s and Saks Fifth Avenue have all announced they will temporarily close. 

Tuesday, Related closed its 1M SF mall at Hudson Yards, which opened a little over a year ago. Downtown’s Westfield World Trade Center — connected to a large public transit terminal — is still open, though its website notes most of its stores are temporarily closed. Brookfield Place, connected to Westfield via underground walkway, is still open, but with reduced hours.

Most of the stores at Staten Island’s Empire Outlets are now closed, and a spokesperson told Bisnow the new shopping center is “now evaluating how this new measure impacts our outdoor spaces.”

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