KNAKAL ON POLITICS; THE DEAL SHEET

Yesterday, Bisnow was on hand as Massey Knakal chair Bob Knakal threw out that rule of not talking politics in mixed company, keynoting a packed National Realty Club luncheon at the Williams Club. He asks: how could we not talk about it, when politics, the economy, and real estate have never been so closely aligned?
He's bi-partisan, pointing fingers at both sides. We can trace today's roots to '91, he says, when Fannie and Freddie guidelines were relaxed and securitization took off. Today, we've lost $5 trillion of wealth. Has capitalism failed? No, regulation framework failure and government non-performance put us where we are, he asserts. The effect on real estate: smaller is better, a changed buyer profile,massive deleveraging of the marketplace, a return to risk premiums and positive leverage—and the 800 lb. gorilla, inflation. However, he remains optimistic about NYC, as it's a cyclical market.

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