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January 14, 2009  
 
       
 
 
SO HOW'S NEW YORK?

Something is clearly in the air—ah, must be that era of change—because two of our top sponsors, Arent Fox and Reznick Group, are hosting separate tax planning seminars on the morning of January 29. We'll tell you more about them tomorrow. Meantime, clear your calendars!


 

Seems everyone's asking us these days how's the New York real estate market. We suspect what they want to hear is "lousy, rotten" to make us Washingtonians feel better. So your publisher is spending this week in the Apple (we started publishing daily there five months ago), going around in his usual nosy way. Well, sorry to disappoint you, but those New Yorkers are resilient; we found that DC is not the only place where "hope" is on the agenda for '09.

 

We snapped this picture this morning of CBRE Tri-State president Mitch Rudin in their offices in the big Met Life building, where we went for a breakfast overview of the '08 "Tri-State" market (NY, NJ and CT). Yes, they see 125,000 workers losing their jobs, meaning 15M SF will be back on the market (their formula is 250 SF per person but shed by firms only at a 50% rate—we'll trust their math). But they point out that's only 5% of the 300M total. Plus, they take a longer view because they saw the dissolution in the late 80s of Drexel Burnham and Salomon and know that sometimes restructuring can stimulate new demand. Already they see boutique firms picking up talent from Bear Sterns, Lehman, Merrill Lynch, and AIG.

 
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Shelly Cohen, left, is head of CB's downtown office (85M SF, defined as south of Canal) and Matt VanBuren runs midtown (225M SF). CB say that although there was negative absorption of 13M SF in '08 compared to positive absorption of 2M in '07, they see financial firms stabilizing and deals still getting done, like Viacom's 1.3M SF renewal and expansion of its HQ at 1515 Broadway in Q4, the third largest leasing transaction in NY history. (Renewals were 35% of velocity last year compared to 28% in 07.) And they suggest we got spoiled in recent years; although '08 was obviously off from '07, it was still 29% more than '05

 

These may be three of the top brokers anywhere. Mike Geoghegan has been the point person for Lehman; Bob Alexander the top producer in the country in recent years for CB; and Bill Shanahan the top capital markets guy (who with partner Darcy Stacom sold the humongous Macklowe portfolio). Mike says you can call the current situation "No Easy Way Out," and Bill says those $1,000 a foot sales prices are, for the time being, history. Excluding the GM Building and forced sales, average prices look more like $654. But here's the good news: The see "liquidity slowly creeping back into the system" and hope it will mushroom by Q3 or Q4, and certainly by Q1 '10. (By the way, we learned that Mike once served in Trammell Crow mid-Atlantic, and says hi to old pals Art Santry, Chris Roth, and Bob Chagares!)


LAST NIGHT AT NYCREW
 

Yep, we snapped this of the sisters of our own Washington-area CREW, whom we met up with at HSBC HQ last night on Fifth Ave. with guest speaker Dennis Yeskey, national head of real estate capital markets for Deloitte: HSBC's Kate Stentebjerg-Olesen; Ferzan Robbins & Associates' (and NYCREW prez) Liz Muskat; Justdan Realty's Karen Dome; Eurohypo AG'sJo Hastings; Cole Schotz's Wendy Berger; Community Development Trust's Joan Berkowitz; andTrinity Real Estate's Sharon Khurdan. Dennis predicted continued decline of real estate fundamentals nationwide for at least the first half of the year. But that didn't prevent him from having lunch the other day at the hot DB Bistro where hamburgers start at $32. (At least he avoided the $150 double truffle burger.)  


PRESTO!
 

This is Monday Properties COO Brian Robin showing us around this morning at the 1.3M SF "Jewel of Park Avenue" building they own at 230 Park Ave, built originally in 1928 for Northern Central Railroad, and which you probably all know because it's the one you can actually drive through on Park. If it looks like Brian's a magician in this picture, that's because he is: They're about to create another Visitors Entrance so you can enter from either 45th or 46th.  

 

This morning in NYC was chilly (17 degrees) but sunny and clear, so with Chief Engineer Darryl Montoya (he's been on the job there 27 years) we took the elevator to the 39th floor, then climbed another four floors of mostly spiral stairs to the amazing cupola to take this picture from the top of the world. So you see, New York is still lookin' pretty good.

 
 
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