Companies are trying to renegotiate their office and retail leases — and in some cases refusing to pay.
Faced with plunging sales that have already led to tens of millions of layoffs, companies are trying to renegotiate their office and retail leases — and in some cases refusing to pay — in hopes of lowering their overhead and surviving the worst economic downturn since the Great Depression. This has given rise to fierce negotiations with building owners, who are trying to hold the line on rents for fear that rising vacancies and falling revenue could threaten their own survival.
Simon Property Group, the biggest mall operator in the United States, this week sued Gap, the owner of retail chains that include Old Navy and Banana Republic, for nearly $66 million in unpaid rent for April, May and June, according to a lawsuit filed in Delaware this week.
In many cases, the strongest tenants — those most able to pay — are driving the hardest for a discount. They include brand-name companies like LVMH, the luxury goods conglomerate that owns Sephora and other outlets; and Starbucks, which had $2.6 billion of cash on hand at the end of March and would have little problem selling stock or bonds to raise more money.
Beyond the immediate impact of business closings on tenants’ revenue are larger questions, including the already-dire trends for malls and shopping centers, how office and consumer behavior might change after the pandemic, and the effects of recent looting and vandalism on retail corridors. Will companies need more space so that employees can spread out, or will they need less because they need fewer offices at all?
New research suggests that by September, most American students will have fallen months or more behind where they would have been if they had stayed in classrooms. And the disruption to education caused by the pandemic is likely to widen racial and socioeconomic achievement gaps because of disparities in access to computers, home internet connections and direct instruction from teachers.
Teachers and parents are worried about how much children are losing out, our correspondent Dana Goldstein writes.
In Aurora, Colo., Clint Silva, a seventh-grade social studies teacher, was planning to spend the spring working with his students on research skills. For one remote assignment, he asked them to create a primary source about the pandemic that future historians could consult.
But only a minority of his students have consistently engaged with remote assignments. “We know this isn’t a good way to teach,” he said.
The impact of the learning loss students have experienced is being assessed by researchers using past learning disruptions — such as natural disasters or even summer break — and comparisons of the usage of online learning software in schools before the pandemic and now from home.
Students could begin the next school year having lost as much as a third of their expected progress from the previous year in reading and half of their expected progress in math, according to a working paper from NWEA, a nonprofit organization, and scholars at Brown University and the University of Virginia.
When all of the impacts are taken into account, the average student could fall seven months behind academically, while black and Hispanic students could experience even greater learning losses, equivalent to 10 months for black children and nine months for Latinos, according to an analysis from McKinsey & Company, the consulting group.
The increase in jobs followed a record 20.5 million-job loss the month
before, the worst ever recorded. The unemployment rate fell from 14.7 percent in April.
President Trump praised himself for the positive unemployment numbers on Friday.
Mr. Trump also tweeted the comments of several television commentators who expressed surprise and delight at the jobs report, then took a shot at his Democratic opponent, former Vice President former Vice President Joseph R. Biden Jr.
“Oh no, the Dems are worried again,” Mr. Trump wrote. “The only one that can kill this comeback is Sleepy Joe Biden!”
Stocks on Wall Street shot higher on Friday, lifting the S&P 500 to within 7 percent of a record, after the U.S. government reported the surprising pickup in hiring in May. Economists had expected a surge in unemployment and another month of job losses.
The upswing threw into doubt the prospects of another virus stimulus bill, threatening to further temper Republicans’ willingness to provide more relief.
“Goodbye phase 4,” a Republican official wrote in a text message on Friday morning after the numbers were released, encapsulating the mood among lawmakers and aides. Others conceded privately that some relief package would likely still materialize, but with a substantially lower price tag and a narrower focus on modifying existing programs, rather than creating new ones.
Republicans had already thrown substantial cold water on the idea of another package on top of the nearly $2.8 trillion already enacted, warning of soaring deficits and arguing that they wanted to see how the economy responded to before doling out more money. A number of new programs and economic lifelines expire later this summer.
The coronavirus epidemic in Britain has killed more than 40,000 people, sickened hundreds of thousands more, including Prime Minister Boris Johnson, and paralyzed the economy. Now it may claim another casualty: a trade agreement between Britain and the European Union.
On Friday, the two sides announced that they had made little headway in their efforts to strike a post-Brexit trade deal. With a deadline at the end of the year, and the last chance to ask for an extension looming at the end of this month, Mr. Johnson’s government argues that it would rather walk away without a deal than prolong the talks.
That may be posturing. Britain now says it wants to step up the pace of negotiations next month. But the pandemic has scrambled the government’s calculations, and a no-deal outcome, which once seemed both disastrous and all but impossible, now seems entirely plausible.
On the European side, the trade talks have fallen down the list of priorities, dwarfed by the need to respond to the pandemic. And the disruptions to the global economy has led some to question whether an agreement with Europe still makes sense for Britain.
Mujtaba Rahman, a former European Commission economist now at the political risk consulting firm, Eurasia Group, said, “The economy after the crisis is going to look fundamentally different than before the crisis, and the government wants a freer hand in reshaping that economy.”
And with Mr. Johnson under fire for his chaotic handling of the virus, the compromises he would have to make with Brussels might be too great for his embattled government.
The New York Times has been tracking outbreaks in all types of long-term care centers for the elderly, based on data provided by states, counties and nursing home operators. As of Thursday, at least 46,000 workers and residents have died of the coronavirus.
For example, the federal account of the Life Care nursing center in Kirkland, Wash., which in late February became the first American nursing home to report a major outbreak, listed one suspected infection and zero coronavirus deaths. Health officials in Washington State have tied at least 45 deaths to that facility, dating back to February.
Though nursing homes were allowed to report infections dating back to January, the federal Centers for Medicare and Medicaid Services only required data on cases from May onward, after the virus had already peaked in the United States.
Seema Verma, the administrator of the C.M.S., said her agency was not able to require nursing homes to report infections and deaths from prior months, but that many nursing home operators had chosen to do so.
“We are prohibited to do retroactive rule-making, and so we couldn’t require them to do so, but we feel pretty comfortable that that’s what they’ve done,” Ms. Verma said.
N.Y.C.’s mayor says the police need to wear masks at the protests.
In New York City, concerns are growing that mainly peaceful protests are exposing many people to the possibility of infection, as many police officers and protesters, who are often in close quarters, were not wearing face coverings. Mayor Bill de Blasio emphasized on Friday that officers are supposed to be wearing face coverings.
“It has not been happening consistently,” Mr. de Blasio said on WNYC radio, adding that he was frustrated and had asked his police commissioner “multiple times” to address the laxness. “It has to be fixed.”
The mayor reiterated that the city was set to start reopening on Monday, and could begin a second phase of reopening “as early as the beginning of July.” The second phase allows the reopening of offices, stores and personal-service businesses like barber shops, with restrictions. Here are some other important developments around the country.
Supreme Court Justice Sonia Sotomayor temporarily suspended a trial judge’s rulings requiring the Trump administration to move more than 800 older or medically vulnerable inmates out of an Ohio prison where nine prisoners have died from the virus. An appeals court is scheduled to hear arguments in the case on Friday.
The head of the Centers for Disease Control and Prevention, Dr. Robert Redfield, told House lawmakers that the federal government and state health departments needed to dramatically increase the number of people tracing the contacts of those infected by the coronavirus. He said that up to 100,000 would be needed by September.
Brooks Brothers, the oldest apparel brand in continuous operation in the United States, plans to lay off nearly 700 employees this summer at its factories in Massachusetts, New York and North Carolina. The company is also trying to find buyers for the factories by mid-July, and expects to close them if it can’t.
A federal appeals court sided with Texas Republicans in their legal battle to restrict voting by mail during the pandemic, striking down a lower-court ruling that would have allowed voters who fear contracting the virus to cast ballots by mail instead of in person.
The N.B.A. players’ union is set to consider a proposal to return to play starting next month in Florida, after team owners overwhelmingly approved the plan on Thursday.
Australia’s prime minister warns that planned protests against police brutality could spread infections.
Prime Minister Scott Morrison of Australia has warned people against attending protests this weekend, saying that a large gathering could sabotage the country’s efforts to control the outbreak.
“Let’s find a better way, and another way, to express these sentiments rather than putting your health at risk, the health of others at risk,” Mr. Morrison said on Friday.
The protests are being organized in solidarity with those in the United States over the killing of George Floyd, who was handcuffed and pinned down by a Minneapolis police officer, but they also focus on the country’s own problems with police brutality and racial discrimination toward Indigenous Australians.
Indigenous Australians are incarcerated at a disproportionately higher rate than others, and more than 400 of them have died while in police custody since 1991.
The police in New South Wales, Australia’s most populous state, asked the state’s Supreme Court to declare a protest scheduled for Saturday in Sydney illegal. On Friday the state court accepted the police’s argument and refused permission for the Sydney protest to proceed. They had initially approved the event, but turnout is expected to reach into the tens of thousands — well above the 500-person limit set by the police.
“Instead of using guns to stop us, like in the U.S., they use the laws to stop us,” Raul Bassi, one of the event organizers, told The Sydney Morning Herald on Friday. “We will put forward our case this afternoon and see what happens.”
Officials in Melbourne said that organizers would be fined if a planned protest on Saturday breached the state of Victoria’s 20-person limit.
But in South Australia, the police in Adelaide have granted residents an exemption to protest. “This is a unique and extraordinary event,” the state’s police commissioner, Grant Stevens, said on Friday. “There is a sentiment that suggests people should have a right to protest on significant matters.”
Australia, which imposed strict social-distancing restrictions and closed its borders in the early days of the outbreak, has largely avoided the worst of the outbreak. As of Friday, it had reported 7,240 cases and 102 deaths. Here are other developments around the world:
South Korea reported 39 new cases in and around Seoul, where a recent wave of infections had been traced to nightclubs and an e-commerce warehouse.
China warned its citizens against traveling to Australia because of what it described as rampant racial discrimination and violence in the country related to the coronavirus outbreak. It follows a series of economic actions by Beijing against Australia, after Australian officials led a call for an independent investigation into the spread of the coronavirus, which first emerged in the Chinese city of Wuhan.
In Britain, the pharmaceutical company AstraZeneca said Thursday that it had struck a deal with a vaccine manufacturing giant, Serum Institute of India, to produce a billion doses of a potential virus vaccine for distribution to low- and middle-income countries.
President Recep Tayyip Erdogan of Turkey revoked a much-debated weekend lockdown, citing “social and economic consequences.” The country’s Interior Ministry had said residents would be confined to their homes during the weekend, but Mr. Erdogan said complaints from citizens had made him re-evaluate the decision.
Spain will start opening its borders to foreign tourists starting July 1, a government spokeswoman told a news conference on Friday, a day after a fellow minister said they would reopen in June. On Thursday, Tourism Minister Reyes Maroto said land borders would reopen starting June 22, though her ministry later walked back the statement, causing some confusion, as well as criticism in neighboring Portugal.
Pandemic lockdowns have given nature a breather around the world, bringing animals to unexpected places. Cougars toured the deserted streets of Santiago, the Chilean capital. Wild boars have strolled through the lanes of Haifa, Israel. Fish catches off Vietnam are teeming again.
In Thailand, Khao Yai National Park, the country’s oldest, has been closed to human visitors for the first time since it opened in 1962. The upshot? Its 300 or so elephants have been able to roam freely, venturing onto paths once packed with humans.
With few cars around, the elephants, the park’s dominant species, stroll along roads, chomping on foliage without needing to retreat to dangerous corners of the forest where cliffs meet waterfalls. Rarely spotted animals, like the Asian black bear or the gaur, the world’s largest bovine, have emerged, too.
“The park has been able to restore itself,” said Chananya Kanchanasaka, a national park department veterinarian. “We are excited to see the animals are coming out.”
The reprieve is notable in part because Thailand is a country where the bond with nature has long been framed as one of domination — as the jungle consuming people or vice versa.
Beyond the pillaging of its own rainforests, Thailand is a key way station on global wildlife trafficking routes, with horns, tusks and scales from as far away as Africa making their way to China.
Mexico is starting to bustle again as the country gradually reopens after a quarantine that hammered its economy. But many Mexicans, including medical experts, are worried the move has come too early, and will lead to more illness and death under a pandemic that has not been brought under control in Mexico and is surging across Latin America.
“Most people think from the government’s message that the worst is over,” said Dr. Francisco Moreno, who heads the Covid unit of ABC Medical Center, one of Mexico City’s top private hospitals.
“We are at the peak of the epidemic,” he added, explaining that the center is so full it has had to turn patients away, despite doubling its capacity in recent weeks.
Mexico’s president, Andrés Manuel López Obrador, has struggled to balance a response to the coronavirus with the economic needs of a country in which over half of the population lives hand-to-mouth, working informal jobs, without a safety net.
Early on, Mr. López Obrador played down the severity of the virus’s threat, allowing soccer tournaments, concerts and preparations for the busy spring tourist season to continue even as neighboring countries shut down.
Mexico’s coronavirus czar, Dr. Hugo López-Gatell, emphasized that the opening was gradual, limited to virus-free communities, the mining, construction and auto industries, and thousands of select businesses.
But the relaxation of restrictions comes at a moment when the disease appears to be peaking. On Wednesday, Mexico reported 1,092 deaths, its highest daily toll to date, though the López Obrador administration said the increase was caused by an administrative delay in reporting deaths. By Friday morning, the total number of dead in the country was 12,545.
Two large studies on Covid-19 were retracted on Thursday by the scientific journals in which they had appeared, because the authors could not verify the data on which the results depended.
The studies, published in The Lancet and The New England Journal of Medicine in May, had produced astounding results and altered the course of research into the pandemic.
The Lancet paper reported dismal findings about the use of chloroquine and hydroxychloroquine to treat Covid-19 patients. It led to the suspension of some clinical trials of the medications, including by the World Health Organization. (Some have since resumed.)
Mr. Trump has repeatedly promoted hydroxychloroquine despite the lack of evidence that it works against the virus. His endorsement had the effect of politicizing scientific questions that normally would have been left to dispassionate researchers.
The Lancet paper, which was purportedly based on data from a huge, privately held registry of patient records from hundreds of hospitals around the world, had concluded that the anti-malaria drugs were associated with dramatically higher rates of heart arrhythmias and deaths in Covid-19 patients. The database belonged to a company called Surgisphere, which is owned by Dr. Sapan Desai, one of the four co-authors.
Later on Thursday, The New England Journal of Medicine retracted a heart study that was published by the same authors, using data from the same registry. The authors concluded that cardiovascular disease increased the risk of dying among Covid-19 patients.
Mosques opened for midday prayer on Friday in the Indonesian capital, Jakarta, for the first time in more than two months, but with social-distancing protocols, temperature checks, face masks and plenty of hand sanitizer.
Prominently posted rules required that worshipers bring their own prayer rugs and keep their sandals with them in a plastic bag. Mosques were limited to half their normal capacity, and some people arrayed themselves diagonally as if on a human checkerboard.
President Joko Widodo, who is eager to move the country forward to what he calls a “new normal,” attended prayers at Baiturrahim Mosque inside the Jakarta presidential palace complex. It can hold 750 people, but attendance was limited to 150.The president wore a gray mask and had his temperature checked on the way in.
Jakarta’s governor, Anies Baswedan, who has often been at odds with the president over how to handle the pandemic, attended Friday prayers separately at Fatahillah Mosque at City Hall.
Midday prayers on Friday are the most important of the week for Muslims.
Mr. Anies announced the reopening of the city’s mosques on Thursday and set out a schedule for gradually reopening offices, restaurants and malls this month.
Indonesia has reported nearly 30,000 cases of the coronavirus and more than 1,700 deaths.
A one-on-one concert to lift spirits suffering in isolation.
Patrick Kingsley, an international correspondent, and Laetitia Vancon, a photojournalist, are driving more than 3,700 miles to explore the reopening of the European continent after coronavirus lockdowns. Read all their dispatches.
To circumvent the restrictions enforced on society by the pandemic, cultural institutions have mostly turned to the internet. Museums have held online panels, theaters have streamed plays on their websites, and orchestras have uploaded their back catalogs.
In Stuttgart, Germany, two state-funded orchestras — the Stuttgart State Orchestra and the Southwest German Radio Symphony Orchestra — are trying to do something more personal. They’ve settled on a series of one-on-one concerts in which one orchestra member plays for one audience member, without ever speaking to them.
After applying to attend online, concertgoers are then allocated a slot in one of 27 sites around the city. They include Stuttgart’s deserted airport, an art gallery, the garden of a private villa — and the terrace beside the vineyard, where Claudia Brusdeylins, a 55-year-old publicist for a renewable energy research group, heard a rendition of “Greensleeves.”
The audience of one arrives with no knowledge about the music that awaits him or her, or the performer or instrument that will provide it. The person simply is asked to sit down opposite the musician, and to lock eyes with the player for 60 seconds.
Then the musician plays for 10 minutes — sometimes squeezing in two or three pieces. They tend to arrive having rehearsed a handful of potential pieces, but change the final selection for each performance. Ms. Brusdeylins was subsequently treated to part of Bach’s Cello Suite No. 1.
Finally, the concertgoer stands up and leaves without applauding, usually wordlessly. There is no ticket fee, but attendees can donate instead to a fund for freelance musicians left without an income by the crisis.
Reporting was contributed by Hannah Beech, Ben Casselman, Stephen Castle, Michael Cooper, Ellen Gabler, Dana Goldstein, Eileen Sullivan, Andrew Jacobs, Patrick Kingsley, Isabella Kwai, Mark Landler, Apoorva Mandavilli, Brent McDonald, Raphael Minder, Andy Newman, Richard C. Paddock, Roni Caryn Rabin, Nada Rashwan, Kaly Soto, Safak Timur, Declan Walsh, Noah Weiland, Mitch Smith, Danielle Ivory and Robert Gebeloff.