At CPN\u2019s annual New York City Investment conference on Friday, speakers offered a vision of the nation\u2019s largest commercial real estate market that blended sober realism with an occasional dash of clear-eyed optimism. \u201cFor the next 36 months, there will be a lot of wailing and gnashing of teeth,\u201d predicted David Arena (pictured), president of Grubb & Ellis Co.\u2019s New York City regional office, during a debate on the city\u2019s future. He ticked off the troubling particulars: declining demand for office space, lower asset values, high financing costs. But Arena also reminded the roomful of real estate professionals gathered at the Westin New York of the city\u2019s resilience. \u201cSo I\u2019m bullish–after the next 36 months.\u201d The speakers also offered a variety of suggestions for strengthening the city\u2019s future. Stan Eckstut, principal in the architecture and planning firm Ehrenkrantz Eckstut Kuhn, cited the need for making affordable housing more accessible in Manhattan. He also called investment in public schools–especially building new schools–\u201cprobably the biggest, most important investment you could make.\u201d Chris Albanese, a principal for the Albanese Organization, expressed concern about maintaining the hard-won improvements that have regained New York City\u2019s stature. \u201cAt this point, we really don\u2019t need more office projects,\u201d he said. \u201cWhat the city needs to do is spend its money on what Giuliani used to call quality-of-life issues,\u201d Albanese added, referring to the improved cleanliness and reduced crime that former Mayor Rudolph Giuliani spearheaded during his 1993-2001 administration. Those advances did much to spur the city\u2019s economy and commercial real estate industry. So despite the city\u2019s troubles, Albanese said, \u201c[Mayor Michael] Bloomberg has to ensure that the quality of life doesn\u2019t get affected.\u201d For his part, Arena stressed the never-ending task of strengthening infrastructure and revitalizing the city through redevelopment. Arena ranked rebuilding the World Trade Center as his top priority, calling it \u201ca promise we made to the country and to the world.\u201d Among other projects, he cited construction of the Second Avenue subway on Manhattan\u2019s East side, the extension of the No. 7 subway line, the $4 billion Atlantic Yards project in Downtown Brooklyn and the redevelopment of the Hudson Yards project on Manhattan\u2019s West Side. \u201cUnfortunately, the mood is such and the reality is such that it\u2019s hard to make those investments now.\u201d Robert White, president of Real Capital Analytics Inc., preceded the discussion on New York City\u2019s future with a keynote address on the national prospects for commercial real estate investment. On the nationwide scene, signs of distress abound. A huge gap has opened between asset offerings and closings this year. So far in 2009, sellers have offered commercial properties valued at an estimated $250 billion, but only about $150 billion in closings have been reported, White said. CMBS delinquency is up 50 basis points year over year but is still relatively low; collateralized debt obligations have exhibited considerably more distress, primarily because of troubled construction loans issued by regional and local banks. The problems in the $700 billion federal rescue program acknowledged last week by U.S. Treasury Secretary Henry Paulson have created what White described as \u201ca wet blanket on the marketplace.\u201d Although the admission that the funds will probably not be used to buy troubled assets is not encouraging, White suggested that at least lenders now have greater clarity about the situation. Banks now understand that they can begin workouts, start shedding assets and deal with opportunistic buyers.<\/p>\n","protected":false},"excerpt":{"rendered":"
At CPN\u2019s annual New York City Investment conference on Friday, speakers offered a vision of the nation\u2019s largest commercial real estate market that blended sober realism with an occasional dash of clear-eyed optimism. \u201cFor the next 36 months, there will be a lot of wailing and gnashing of teeth,\u201d predicted David Arena (pictured), president of…<\/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":[4],"tags":[],"class_list":["post-1003891557","post","type-post","status-publish","format-standard","hentry","category-regions"],"acf":[],"yoast_head":"\n