New York City–and also national–real estate markets will face challenges into next year, but strong fundamentals will help ease the blow, according to two top CB Richard Ellis Inc. executives. \u201cWe really don\u2019t see any wholesale drop in the leasing market,\u201d said John Powers, chairman of CB Richard Ellis\u2019 New York tri-state region. During a briefing Wednesday afternoon at the firm\u2019s Midtown Manhattan office, Powers predicted that the Manhattan office market would avoid the high availability levels that followed the Sept. 11, 2001, terrorist attacks. First-quarter availability in Midtown Manhattan, New York City\u2019s largest submarket, stood at 8.2 percent. By contrast, availability in 2003 reached 13.3 percent. \u00a0One reason may be that the much-ballyhooed financial services slowdown will take a while to filter through the Manhattan leasing market. As an example, Powers cited a hypothetical scenario involving Bear, Stearns & Co., which faces massive job cuts after its acquisition by JPMorgan Chase. Instead of giving back a huge block of space in one fell swoop, the former Bear Stearns space will most likely return space to the market \u201cin dribs and drabs\u201d between 2010 and 2013. The reason is the long leadtime required to assess and then rationalize the space. \u00a0Manhattan office investment sales have dropped dramatically since the first quarter of 2007, when 25 deals valued at $12.8 billion closed, Powers noted. So far 2008 has shown only a fraction of that velocity–14 transactions totaling about $1.5 billion in value.The continuing uncertainty about debt pricing is keeping investors on the sidelines for the moment. \u201cNobody wants to be the first guy in and be wrong,\u201d explained Raymond Torto (pictured), CB Richard Ellis\u2019 global chief economist. But Torto emphasized that abundant capital will be poised to jump into the market when pricing stabilizes and confidence in the capital markets returns. And Powers pointed out that a number of strong investment firms are establishing funds to buy distressed or mispriced SMBS debt. \u00a0Turning to the national economy, Torto said, \u201cIt\u2019s ugly. It doesn\u2019t matter what you call it\u201d–a recession or a contraction. But Torto added that the federal economic stimulus package, combined with the Federal Reserve\u2019s recent actions, could start to pull the economy out of its funk in late 2008 or early 2009. Torto warned that one major risk is a failure to address the residential foreclosure crisis promptly. Lack of action could place more homes on the market, further depressing housing prices in hard-hit areas and hampering economic recovery, he explained. \u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"
New York City–and also national–real estate markets will face challenges into next year, but strong fundamentals will help ease the blow, according to two top CB Richard Ellis Inc. executives. \u201cWe really don\u2019t see any wholesale drop in the leasing market,\u201d said John Powers, chairman of CB Richard Ellis\u2019 New York tri-state region. During a…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1003788313","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n