New York is the world financial capital, the epicenter of global financial problems, and financial companies will shrink in size. So New York's prospects are poor relative to other markets. We've all heard that line of reasoning. A real estate consultant was throwing the New York demise scenario at me the other day on a shuttle trip to Washington. "You know where Morgan Stanley's commercial bank is located? he asked and then answered "Charlotte. New York is going to lose a lot of jobs."
I agree--New York will get taken down several pegs and deserves it. The Wall Street capital machine was built on a mirage and now the money flows coursing through the local economy have been slowed dramatically. For rent signs appear in store fronts. New condo projects look eerily empty. Street traffic is noticeably down. Restaurants suddenly close. And city and state governments cut back on services. It's not a great scene.
But New York will not be supplanted by any other U.S. city, and certainly not Charlotte, as the nation's premier center and most important real estate market.
First off, the government bailout money has probably cushioned New York more than any other market, keeping Wall Street firms and the banks from firing even more people. Recent figures suggest that layoff numbers are well below forecasts and now we read reports about how some financial companies are setting aside robust bonus pools. A stricter regulatory environment can be expected to constrain transaction and trading activity in the future and the leverage game is over for a while. But fortress finance, though smaller and less profitable, is far from collapsing.
And the brainpower bankers and finance types who run money won't be leaving New York for cheaper places like Charlotte although they may place more back office there instead of Jersey City.
You see, New York is a primary global gateway city and principal destination on global pathways. It's much more than a financial center. It's one of the most important places for where the world does business. It's got two large international airports and one of the nation's biggest ports. It's also a world media center and cultural capital with many of the country's best medical centers and a coterie of top universities and research facilities.
If you live in Charlotte, you still need to take an extra flight to Atlanta or New York to get on a jet to Europe. It ain't even on a global pathway. Bank of America still has
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Jonathan D. Miller
A marketing communication strategist who turned to real estate analysis, Jonathan D. Miller is a foremost interpreter of 21st citistate futures – cities and suburbs alike – seen through the lens of lifestyles and market realities. For more than 20 years (1992-2013), Miller authored Emerging Trends in Real Estate, the leading commercial real estate industry outlook report, published annually by PricewaterhouseCoopers and the Urban Land Institute (ULI). He has lectures frequently on trends in real estate, including the future of America's major 24-hour urban centers and sprawling suburbs. He also has been author of ULI’s annual forecasts on infrastructure and its What’s Next? series of forecasts. On a weekly basis, he writes the Trendczar blog for GlobeStreet.com, the real estate news website. Outside his published forecasting work, Miller is a prominent communications/institutional investor-marketing strategist and partner in Miller Ryan LLC, helping corporate clients develop and execute branding and communications programs. He led the re-branding of GMAC Commercial Mortgage to Capmark Financial Group Inc. and he was part of the management team that helped build Equitable Real Estate Investment Management, Inc. (subsequently Lend Lease Real Estate Investments, Inc.) into the leading real estate advisor to pension funds and other real institutional investors. He joined the Equitable Life Assurance Society of the U.S. in 1981, moving to Equitable Real Estate in 1984 as head of Corporate/Marketing Communications. In the 1980's he managed relations for several of the country's most prominent real estate developments including New York's Trump Tower and the Equitable Center. Earlier in his career, Miller was a reporter for Gannett Newspapers. He is a member of the Citistates Group and a board member of NYC Outward Bound Schools and the Center for Employment Opportunities.
