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January 15, 2009 
Monday Properties


We braved the flurries this morning for ULI NY's annual economic and real estate outlook—together with an SRO crowd at 101 Park Ave. Packed, of course, because everyone's looking for answers.  And guess what? A concrete prediction from Moody's Economy.com chief economist Mark Zandi: Recovery shall begin precisely on.drum roll.September 15. (Perhaps a little too precise, but he seemed to like the poetic symmetry of dating it for the anniversary of the Lehman collapse). 

And why September? Mark, center, believes in the power of government, saying this is where the fact he's a registered Democrat comes out, even though he was a McCain adviser. He says the difference between having a recession instead of a depression is the fact of aggressive government intervention, eg, bringing key interest rates practically to zero and embracing huge economic stimulus. With Mark above, Real Estate Economics chief economist Sam Chandan and Weitzman Group partner Tom Justin.


This was, to say the least, welcome news to the crowd; how else to explain such rapt in attention with no checking of Blackberries?  Tom, who moderated, said we're in the longest recession in 25 years, and that 2009 will likely be the worst period for commercial real estate since '91. Sam gave sector specific NY forecasts: apartments will be relatively sound due to little overbuilding; office demand is diminishing and vacancy may go up as much as 450 basis points higher, especially downtown; industrial space demand will ease; and retail will be constrained due to consumer anemia.


ING Clarion's Gary Rufrano and Sherwood Equities' Ryan Nelson, who told us his '09 agenda is to find  distressed asset opportunities—and any other tips for surviving.



If you had significant doubts about the city's future, don't, New York EDC COO Tokumbo Shobowale told us at the Associated Building and Owners of Greater New York's monthly luncheon yesterday, at the National Arts Club on Gramercy Park South. Richard Simmons would be proud: the Big Apple is in good shape. With the highest bond rating ever, 47M tourists in '08, and over 6,000 city blocks rezoned, tremendous development is in the works and we're in an even better position than post 9/11, Tokumbo says. Thank three initiatives the city has put forth: being prudent in expenditures by cutting costs; diversifying its economic base beyond the financial sector; and investing in infrastructure to avoid the mistakes of the '70s. Mayor Mike's rainy day fund helped weather the first storm, and he started cutting the budget before economic woes hit, Tokumbo said.


Tokumbo with ABO board members: Douglaston Development's Jeff Levine, Delta Management's Elaine Sollar Eisen, investor/developer Alan Friedberg, ABO exec director Nicholas LaPorte, Delta's (and ABO chair) Arnold Sollar, Caran Development's Sherry Frankel, and ABO president Jerome Belson. Despite job losses in the financial sector, he says we're growing in other areas, namely TV/film, biotech, and green. Although the EDC may not move forward on all projects, it still has plans for continued investment and projects like Hudson Yards, Willets Point, Hunter's Point and Coney Island.


Corporate Security Installation's Michael Gross, Epoch Times' May Song, and Douglaston Development's Leah Hirsch. The EDC is not the only busy bee in this down market: Michael says security business is doing well because landlords are trying to limit their liabilities (and, unfortunately, crime is up). Leah's firm is working on The Edge, a 1.7M-SF mixed-use waterfront development in Williamsburg, Brooklyn.

Reznick Group
Monday Properties
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Leo A Daly
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