(Read more on the debt and equity markets.)
NEW YORK CITY-The city has seen its share of market changes over the years. With today's credit uncertainty, panelists at yesterday's RealShare New York's “Town Hall Meeting: Has the New York Real Estate Market Reached Its Peak?” session noted that the market will most likely continue to be flat for the rest of the year. They did however remain bullish about the city's long-term prospects.
More than 550 top-level real estate executives were in attendance at yesterday's Sixth Annual RealShare New York conference, which covered everything from market performance reviews to forecasts from executives in all areas of the market, including buyers, sellers, financial service providers and investors.
John Salustri, national online editor at GlobeSt.com, moderated that panel of four executives that kicked off the half-day event and focused his opening question on the topic that has been on insiders' minds the past few months: the credit market. Tom Bow, SVP of the Durst Organization, was first to respond and noted simply that “it has been an interesting August.” He added that credit is a little more expensive and deals require more money, but things are still getting done. “Things have been crazy right now, but adjustment right now doesn't really scare me.”
Bow along with Josh Kuriloff, vice chairman of Cushman & Wakefield, agreed that the market is going to be flat for the rest of the year due to uncertainty. Kuriloff did note, however, that that there are a lot of safety valves in the New York City market.
Kuriloff wasn't the only panelist who was optimistic of Manhattan's future. John Bralower, president and managing director of the Carlton Group, noted that “we are fortunate that we have so many drivers in the city. We can weather anything except the most severe crisis.” He explained that one such driver that New York City has is that “people from all over, including overseas, want to be here.”
Robert Freedman, president and CEO of GVA Williams, noted that “we are getting back to fundamentals. Other than terrorism, I don't see any issues that can really have an effect on New York City,” he said. “I could not be more bullish about the long-term prospects.”
Bralower added that “things have definitely shifted in the market,” but noted that “the appetite for borrowers is still there.” He said that the biggest shift he has seen has been on the development and mezzanine side of things. “For the long term, I am not worried…I am an optimist.”
Equity is cheaper than debt in this market, noted Freedman. “I don't think this is a profound secular change…we have seen it before.”
Even after Salustri presented the panel with the worst case scenario being a national recession, panelists still remained optimistic that the city could handle it. “Most companies in New York City today earn a lot of their earnings from the global market,” Kuriloff said. “If you look at the supply, Manhattan's vacancy rate right now is 5.5%, and if we had 50,000 job cuts for example, our vacancy rate would go up to 9%.”
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
