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The Downtown office market is in even worse shape than widely reported data indicate, according to several major dealmakers.

One of them, an industry legend not given to doom-and-gloom scenarios, told us that huge amounts of space are quietly up for sublease even at the World Trade Center and Brookfield Place Lower Manhattans best-performing properties.

Most brokerage firms cite FiDi-area availability including space currently vacant or soon to be — at between 20% and 23%, compared with around 16% uptown. But so-called shadow space cited by the market insider could raise the total much higher.

Not every building is in trouble. The districts grim overall data are skewed by two particular enormous properties Paramount Groups transitioning 60 Wall Street, where most of 1.6 million square feet are yet to be leased, and 111 Wall Street, an entirely empty 1 million square-foot address thats now in foreclosure.

But other struggling buildings are also on the downbound train, such as 40 Wall Street. The landmark tower is about 30% empty and its plight will likely worsen as the Trump Organization skyscraper is at risk of seizure by state attorney general Letitia James.

Even more vulnerable are Downtowns large number of pre-war, Class B-minus buildings that few tenants want at any rent and which cant easily convert to residential use.

Yet hope might be on the way. According to VTS, the national real estate technology platform that uses AI to monitor and interpret market office-space tours — look-sees by companies eyeing a move or expansion have recently been higher Downtown than in Midtown or Midtown South.

Lower Manhattan saw 40% more so-called tire-kicking visits in the months of December 2023 through February 2024 than it did between September and November 2023.

A 43% increase in tours month over month easily beat Midtowns 25% and Midtown Souths 11%, according to VTS. Much of the tenant interest Downtown was by companies seeking 50,000 square feet or more.

VTS chief strategy officer Ryan Masiello said, I think generally, companies are starting to realize were at the bottom of the market right now. More companies are exploring to try to take advantage of lower rents, especially downtown, he said.

But one highly accomplished downtown market-watcher was skeptical of VTS findings.

They can only be true if theyre including the smallest users. It definitely is not true of tenants looking for more than 20,000 square feet, the insider said.

Manhattan leasing in all submarkets hit the mute button in the first quarter, according to Savills which cited a dearth of large deals.

The first quarters 6.8 million sf of transactions was 6.6% lower than in the first three months of 2023, Savills said.

Interestingly, three of the largest office deals were renewals and/or expansions by major retailers — including for Michael Kors, Burlington Stores and David Yurman, which tallied a total of nearly a half-million square feet.

At least one major landlord saw some positive news. At SL Greens 485 Lexington Ave., four recent new leases and one renewal totalled 64,303 square feet.

Leasing director Steven Durels said, Our recent success at 485 Lexington confirms that well-located buildings are experiencing increased tenant demand.

In the two largest new leases, RSC Insurance Brokerage took 27,964 square feet on the entire 17th floor and Exponent, Inc., an engineering and scientific consulting firm, took 14,383-square feet on the 22nd floor.

Smaller deals include capital markets company William ONeil & Co. for 4,797 square feet and Graham Holdings Company signed for 3,006 square feet.

In addition, Tegna, Inc., a broadcast, digital media and marketing services company, renewed its 14,078-square-foot lease on the 27th floor.

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Technology

Instagram co-founder Mike Krieger joins Amazon-backed Anthropic

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Instagram co-founder Mike Krieger joins Amazon-backed Anthropic

Omar Marques | Lightrocket | Getty Images

Instagram co-founder Mike Krieger will join artificial intelligence firm Anthropic as chief product officer, the company announced Wednesday.

Krieger, the former chief technology officer of Meta-owned Instagram, grew the platform to 1 billion users and increased its engineering team to more than 450 people during his time there, per a release. He and Instagram’s other co-founder, Kevin Systrom, most recently built the personalized news app Artifact and sold it to Yahoo.

Around this time last year, Anthropic had only rolled out the first version of its chatbot without any consumer access or major fanfare. Now, it’s one of the hottest AI startups, with a product that directly competes with OpenAI’s ChatGPT in both the enterprise and consumer worlds. Krieger’s hiring is likely meant to further that competition.

The generative AI startup is the company behind Claude, one of the chatbots that, like OpenAI’s ChatGPT and Google‘s Gemini, has rocketed in popularity in the past year.

“Mike will oversee Anthropic’s product engineering, product management, and product design efforts as we work to expand our suite of enterprise applications and bring Claude to a wider audience,” Anthropic said in a release.

News of Krieger’s hiring follows Anthropic’s debut of its first enterprise offering and iOS app earlier this month. And in March, Anthropic announced Claude 3, a suite of AI models that it says are its fastest and most powerful yet.

Anthropic was founded by ex-OpenAI research executives, and its backers include Google, Salesforce and Amazon. It’s closed five different funding deals totaling about $7.3 billion in the past year.

Krieger will lead Anthropic’s latest initiatives.

The company’s new plan for businesses, dubbed Team, has been in development over the last few quarters and involved beta-testing with between 30 and 50 customers across various industries, such as technology, financial services, legal services and health care, Anthropic co-founder Daniela Amodei told CNBC in an interview earlier this month.

Anthropic’s first iOS app is free for users across all plans and also debuted this month. It provides syncing with web chats and the ability to upload photos and files from a smartphone. There are plans to launch an Android app, too.

The generative AI field has exploded over the past year, with a record $29.1 billion invested across nearly 700 deals in 2023, a more than 260% increase in deal value from a year earlier, according to PitchBook. It’s become the buzziest phrase on corporate earnings calls quarter after quarter.

Academics and ethicists have voiced significant concerns about the technology’s tendency to propagate bias. But even so, it’s quickly made its way into schools, online travel, the medical industry, online advertising and more.

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Politics

Sunak and Starmer facing historic unpopularity with ethnically diverse communities, polling suggests

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Sunak and Starmer facing historic unpopularity with ethnically diverse communities, polling suggests

Rishi Sunak and Sir Keir Starmer are both facing a historic lack of popularity among ethnically diverse communities, new polling suggests.

While ethnically diverse community voting trends are incredibly complex and almost always hard to predict, some polling can give useful indications that can speak to the mood of the country.

A comprehensive set of data based on polling by Ipsos and shared exclusively with Sky News gives us a general sense of how the leaders of the two main parties are faring at this very specific time.

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Sunak more popular with white voters

Mr Sunak was named the UK’s next leader on the festival of Diwali, serving as a reminder of the milestone in Britain’s evolution as a multicultural and multi-faith society.

He’s the UK’s first prime minister from an ethnically diverse background and the first Hindu prime minister, but in terms of how much ethnically diverse communities have rewarded him for these historic firsts, it’s a somewhat surprising figure.

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Over the past year, his approval rating among ethnically diverse communities is -53.

That figure is historic too – it’s one of the worst of any prime minister in nearly 30 years.

Actually, from these figures, he’s much better liked by white voters – who give him a rating of -41.

This is perhaps unsurprising, given that historically the majority of ethnically diverse communities have voted Labour.

Though support for the Conservatives reached a high of 30% in the first half of 2016 and only falling sharply in the aftermath of Brexit and then in the 2017 general election under a different leader.

Sir Keir behind Blair and Brown

For the Labour Party then, the stakes could not be much higher as they bill themselves as the party of equality and progressive politics and ethnically diverse communities have traditionally rewarded them for it.

The party has consistently held large leads with ethnically diverse community voters over the last few decades and under previous Labour leaders, often given net positive satisfaction levels.

The current leader, Sir Keir Starmer, has a more favourable rating than the current prime minister, with an average satisfaction rating over the past year of -32.

But he is also considerably more popular among white voters.

And when you compare these numbers to previous Labour leaders, it is more stark.

Sir Keir’s standing with ethnically diverse community voters currently is the lowest level a Labour leader has recorded among black and south Asian voters since 1996.

Far worse than the very worst ratings recorded by either Tony Blair (at -11 during the Iraq War) or Gordon Brown (at -13).

‘The Gaza Effect’

Now, there are myriad reasons why individuals and different communities have drifted from the central parties and traditional voting patterns, but Ipsos has outlined one specific thread of dissatisfaction with both parties that they call “The Gaza Effect”.

During by-elections and the recent local elections we saw a wave of independent candidates running on this single issue platform, most prominently George Galloway in Rochdale, but this data shows an indication of how deep that sentiment runs.

When you compare the aggregate satisfactions levels across the year for both leaders, you can see how different ratings become for ethnically diverse communities when compared to white voters.

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For white voters, there’s next to no effect in satisfaction levels towards the two leaders post 7 October.

When you compare that data to the rating ethnically diverse community voters have given the two leaders, there is a noticeable drop in support.

For Mr Sunak the drop is only around 13 points, but for Sir Keir, it is far more significant with a huge fall of 29 points.

The scale of the impact is almost impossible to predict, and the drop in these figures won’t necessarily translate into votes or even seats – but what is clear is these figures show both parties will need to offer ethnically diverse communities much more to win their vote at the next election.

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Technology

These wall-climbing, AI-powered robots are finding the flaws in ‘D’ grade US infrastructure, from commuter bridges to military hardware

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These wall-climbing, AI-powered robots are finding the flaws in 'D' grade US infrastructure, from commuter bridges to military hardware

CNBC Disruptor 50 Gecko Robotics disrupts the infrastructure industry

The collapse of Baltimore’s Francis Scott Key Bridge earlier this year and an I-95 overpass in Philadelphia last June weren’t triggered by structural flaws — a runaway, powerless ocean ship and tanker fire were the culprits. But the disasters were the latest examples of an issue seen across the U.S.: trillions of dollars worth of critical — and vulnerable — bridges, roads, dams, factories, plants and machinery that are rapidly aging and in need of repair.

Significant sums of money are being spent to fix the issues, some coming from President Biden’s Infrastructure Act and other legislation, but the way infrastructure is maintained has largely not changed, mostly done slowly by humans or after a significant issue arises like a leak or collapse.

Gecko Robotics, which ranked No. 42 on the 2024 CNBC Disruptor 50 list, is taking on the nationwide challenge with AI and robots, specifically, its wall-climbing bots that perform inspections on infrastructure and not only identify existing issues but also to try to predict what can be done to avoid future problems.

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“When you think about the built world, a lot of concrete, a lot of metal that is, especially in the U.S., 60 to 70 years old; we as a country have a D rating for infrastructure and getting that up to a B is a $4 trillion to $6 trillion problem,” Gecko Robotics CEO Jake Loosararian told CNBC’s Julia Boorstin. “A lot of that is understanding what to fix and then targeting those repairs, and then also ensuring that they don’t continue to make the same mistakes.”

Gecko Robotics’ technology is already being used to monitor “500,000 of the world’s most critical assets,” Loosararian said, which range from oil and gas facilities and pipelines to boilers and tanks at manufacturing facilities.

A focus on military hardware, from subs to aircraft carriers

Gecko robots are increasingly being utilized by the U.S. military. In 2022, the U.S. Air Force awarded Gecko Robotics a contract to help it with the conversion of missile silos. Last year, the U.S. Navy tapped the company to help modernize the manufacturing process of its Columbia-class nuclear submarine program, using Gecko’s robots to conduct inspections of welds.

Gecko Robotics is also working with the Navy to inspect aircraft carriers, which Loosararian demonstrated on CNBC via a demo on the USS Intrepid, a decommissioned aircraft carrier that now serves as a museum in New York City.

He compared the analysis that Gecko Robotics is doing on infrastructure to a CAT scan of a human body, while also creating a digital twin of the scanned object.

Those inspections historically are done by workers, collecting thousands of readings across an aircraft carrier. Gecko Robotics technology can collect upwards of 20 million data points in a tenth of the time, Loosararian said.

“There’s human error, and if you’re hanging off the side of a ship, it’s pretty dangerous too,” he said.

There are also issues related to the timeliness of military hardware construction and readiness of defense assets in an unpredictable world of global threats. For example, Loosararian said China is building ships 232 times faster than the U.S. is, a function of the sheer amount of shipbuilding capacity that China now has in comparison.

“A third of our naval vessels are in drydock right now, and you want them out of drydock or not even in a maintenance cycle,” Loosararian said. “What we’re doing with Lidar and ultrasonic sensors is a health scan, seeing what the damages are and how to fix them, because what we’re trying to do is get these ships from drydock out to the seas patrolling as fast as possible.”

The digital twins being created by Gecko robots also help with the building of future projects, saving not only time but resources and capital.

“It’s not just about how things work day-to-day but also how do you build smarter things,” Loosararian said.” If we can understand what fails in the real world, then we can figure out how to build smarter things in the future.”

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CNBC Disruptor 50 Gecko Robotics disrupts the infrastructure industry

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