NEW YORK CITY—The current feud between Mayor Bill de Blasio's office and the New York Police Department—which allegedly has resulted in a reduction in arrests being made and tickets being issued—appears poised to spell trouble for the city's commercial real estate industry.
That's the sentiment of several industry leaders who spoke to GlobeSt.com about this issue, noting that the most important driver of growth in both residents and visitors to a city is safety.
And the slowdown is real. According to the New York Times, for the week that ended on Jan. 11, the total arrests made citywide declined by 55.9% year-over-year. Further, while GlobeSt.com couldn't confirm them, reports have surfaced that between Christmas and New Year's Eve of 2013, the NYPD made 600 arrests but zero arrests were made in that same time period last year.
“If the air is not cleared at some point—regardless of who is to blame—it could certainly pose a risk to the city,” former Mayor Michael Bloomberg administration official Seth Pinsky, who now serves as EVP and fund manager at RXR Realty, tells GlobeSt.com.
Previously president of the city's Economic Development Corp., he continues, “After the success of the Administration and the NYPD on crime last year, it's important that the momentum be maintained in 2015 and beyond, both because a safe city is a right of all New Yorkers and because a safe city is key to the continued health of our economy.”
Eastern Consolidated principal and executive managing director David Schectman's outlook was more dire. “If this continues, it will choke the development of affordable housing”—the very development de Blasio is targeting. “Ultimately, those developers are still operating for-profit enterprises and there's a risk in being a pioneer in areas that have historically been affected by crime."
He adds, "Construction workers can't be mugged on their way to job sites and food workers have to be able to safely deliver food to the construction workers.”
Boiling the problem down to brass tacks, Schectman says, “Last year I did 52 deals in four out of the five boroughs, for just shy of $1 billion. If we go back to the chain snatching era of Mayor David Dinkins and the animus for the police, I won't be selling as many buildings."
Adds Bob Knakal, chairman of New York investment sales at Cushman & Wakefield—and formerly chairman at Massey Knakal Realty Services. “A strong quality of life encourages people to live and work here; it creates demand for residential, retail and office space.
“The attractiveness of the city is key to commercial real estate,” he tells GlobeSt.com, “and to the extent that quality of life goes down, where there are homeless people lying on the sidewalk and squeegee guys on the street, we will have crime and less people wanting to visit, live and work here.”
By contrast, Knakal says, “If the city is deemed to be safe and clean, people will want to come.”
The Real Estate Board of New York and the Association for a Better New York declined to comment on this story. Cushman & Wakefield declined GlobeSt.com's request for an interview with Ray Kelly, president of risk management services and the former commissioner of the New York Police Department.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
