Already reeling from a spiraling economy brought on by the coronavirus, U.S. commercial real estate was buffeted by a new threat this week: sweeping unrest that saw properties set ablaze, retailers looted of their wares and buildings riddled with graffiti and broken glass.
The death of George Floyd, an unarmed black man killed in police custody in Minneapolis, spurred the nationwide protests, making way for a new chapter of painful dialogue about race in America.
But as one conversation starts up again, another one critical to the American economy has now been momentarily suspended: how to revive properties in the midst of a historic pandemic and economic collapse.
What started in the Twin Cities quickly spread to New York and Los Angeles, Chicago and Dallas, Atlanta, Washington, D.C., and beyond. Peaceful protests by day devolved into violence at night, leaving hundreds, if not thousands, of businesses and properties shattered.
Monday night was more of the same. Curfews went into effect, police presence in many cities was multiplied, and before nightfall, looting had already commenced in pockets of the country. Two people died Monday after protests devolved into looting and violence in Cicero, Illinois, a suburb of Chicago.
In D.C., those old enough to remember the 1968 riots that followed the assassination of the Rev. Martin Luther King Jr. remarked on the eerie similarities between now and then. But unlike past riots, including the 1992 Rodney King riots in South Central LA, looters targeted national chains like Target and luxury stores like Dior.
“These looters didn’t want to destroy black and minority[-owned] businesses and areas,” said WLM Financial CEO and founder Odest Riley Jr., a longtime Inglewood, California, resident. “For many of these younger protestors, they see this world and that things should be equal. They are more organized with social media and technology, so they’ve been systematically targeting downtowns or higher-revenue neighborhoods.”
The ritziest shopping districts were targeted nationwide — from SoHo in Manhattan and Rodeo Drive in Beverly Hills to the Gold Coast in Chicago and Buckhead in Atlanta. Business owners and local leaders decried the destruction of property and the violence from agitators and police. They also acknowledged what caused the tension in the first place.
“Political, business and community leaders must come together and take concrete actions to significantly and measurably combat the long-standing abuse and unequal opportunities that continue to fall, particularly across race and gender,” Real Estate Roundtable President and CEO Jeffrey DeBoer said in a statement.
Even self-avowed peaceful protestors said the destruction was a side effect of society’s deep injustices. Justice League NYC was one of five groups to organize a peaceful march in Brooklyn on Friday. The groups operate based on a philosophy of nonviolent action, but Justice League NYC spokesperson Keris Love said she respects the anger that fueled some of the destruction.
“Although we practice ‘Kingian’ nonviolence, we don’t take the stand of policing black people’s feelings,” Love said in an interview Monday. “Our country has made it clear that it is property and profits over people. We understand that property and profit are what is important in this country instead of people. … If we damage something you care about, maybe you’ll hear us.”
After Saturday night protests in downtown Chicago turned ugly, with looters hitting Gold Coast boutiques like Versace and Dior and major department stores like Macy’s, the city closed off much of downtown, lifting bridges over the Chicago River and cutting off public transportation.
That didn’t curtail the destruction, as looters spread throughout the city on Sunday, heavily damaging retail trade areas on the North, South and West Sides.
As shop owners spent Monday sweeping up broken glass and counting their losses, Mayor Lori Lightfoot’s plan to begin easing the quarantine and reopening the city’s nonessential businesses later this week seemed doubtful. “It really destroys the fabric of neighborhoods and their ability to rebound from the COVID-19 pandemic,” Hubbard Street Group Managing Partner John McLinden said of the looting and property damage.
Hubbard Street in 2018 completed Wicker Park Connection, a pair of luxury apartment buildings on Division Street in Chicago’s Northwest Side Wicker Park neighborhood. The 207-unit development has several boutique shops and a small-format Target store on its ground floor that was looted and emptied over several hours Sunday night.
“It’s unfortunate that a peaceful protest turned into looting and mayhem, but we’re thankful that the other tenants, even the adjacent tenants, were not damaged,” McLinden said. “Clearly they were targeting the big national retailer.”
But unlike many of the boutiques and small independent shops up and down the street, the roughly 13K SF Target serves a broad customer base, selling food, medicine and all the daily necessities.
“It was one of the few stores to remain open during the quarantine,” he said. “And now, this important lifeblood of the community is
The 15 stores that make up NewMark Merrill Cos.’ Stony Island Plaza were all ransacked and vandalized Sunday, CEO Sandy Sigal said. The Foot Locker was cleaned out. A medical facility’s computers were all stolen, and even the supermarket wasn’t spared.
“It’s senseless,” Sigal said.
But he is hopeful about the future. “The reality is that bad gets out of the starting blocks faster, but good wins the
race,” he said.
McLinden said he’s sympathetic to the challenge facing Lightfoot and the police department, but he believes the city and state need to do more. “The National Guard had no presence last night in the neighborhood, and no one was really enforcing the curfew,” he said.
Lightfoot said in a Monday morning press conference that the police are doing all they can. The city’s 911 system logged 65,000 calls in the previous 24 hours, 50,000 more than usual, and officers had arrested about 1,000 people.
“The fact is, the violence that we saw and the looting we saw spread like a wildfire,” Lightfoot said. McLinden said the disorder could have a long-term impact even after retailers clean up, restock and open for business. “I hope the mayor takes a stronger position and can provide security for our residential and commercial tenants, or people are just going to want to leave the city,” he said.
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