“We have seen on Wall Street the cycle of greed turn to fear," said John Powers, chairman of the New York Tri-State Region for CB Richard Ellis, at CoreNet’s New York City Market Update luncheon this afternoon. "Now we’re seeing pain. It will be a while before we see hope. And that is the cycle.”
It wasn’t the happy-go-luckiest of real estate luncheons today on the eighth floor of the Time Life Building.
As brokers dug into their filets of salmon, Marisa Di Natale, a senior economist at Moody’s Economy.com, imparted the harsh truth as she saw it:
"We believe we are in a recession right now and that we have been in a recession since fourth quarter last year,” Ms. Di Natale said. That, mind you, is for the nation as a whole. Here in New York, where we pride ourselves on our cutting-edge sensibilities, we are a good two business quarters behind the times.
"We were late coming in, and we’ll be late coming out,” she said. "We’re actually looking at a worse ’09 in New York City than in ’08. …For the rest of the economy, the second half of ’08 will be worst and the rebound will start in ’09."
Mr. Powers was, perhaps due to his insouciant broker sensibilities, a bit more uplifting.
"The office market in Manhattan, from the sales perspective, is frozen,” he said, but went on to predict only mild increases in the vacancy rate and only minor drops in asking rents. He attributed both to the relative lack of new construction slated to come on the market and the stability of Midtown Manhattan’s real estate titans.
According to Mr. Powers, none of the 10 landlords that control 42 percent of the Midtown office market are overleveraged, which should have a stabilizing effect.
Nor was Ms. Di Natale without words of solace: "This recession will be more mild than what we saw in 2001 and in 1990,” she said.
And that’s something.