Burning down the house. (Getty)

Few things are as associated with New York—bagels, the subway, Woody Allen—as skyscrapers, from the Empire State Building to the World Trade Center. They are increasingly becoming defining icons in other world cities, as well, from Dubai to Shanghai, a fact that may well auger a coming economic crisis for a few eastern economies, according to a new study by Barclays Capital.

"Often the world's tallest buildings are simply the edifice of a broader skyscraper building boom, reflecting a widespread misallocation of capital and an impending economic correction," Barclays analyists declared earlier this week.

Indeed, both the Empire State Building and the World Trade Center were built into the headwinds of a down economy. And look at all the towers dotting the skyline during the most recent building boom. The Brooklyn waterfront barely existed a decade ago, and look at it now.

This is not to say that skyscrapers cause recessions, they are simply the strongest sign of hedonistic times, and the fact that China and India are building so much should give investors pause, argues Barclays.

Professor Skyscraper himself Vishaan Chakrabarti argued in an email to The Observer that the worst thing we could do is get scared off from building big.

Real estate is a lagging indicator, so often skyscrapers finish up as a bubble bursts.   But skyscrapers in places where there is demand (high populous places with demand like NYC, Shanghai, Mumbai) vs anomolous locations like Dubai, are about much more than one cycle.  Often those same buildings that finish as a bubble is bursting also end up being very valuable investments in the long term, and very important for those cities and their tax bases.

Time to break ground again.

mchaban [at] observer.com | @MC_NYC

From 2003 to 2009, Peek's tenure as CEO of CIT was marked by an effort to bring the firm into Wall Street's big leagues. His expansion of the commercial lender into subprime mortgages proved ill-fated, and the company exited subprime in 2007. Peek resigned from CIT in October of last year. The firm's bankruptcy proceedings included the loss of $2.33 billion in taxpayer funds under the government's Troubled Asset Relief Program.

"Our clients will benefit from the unique depth and diversity of his experience across a broad spectrum of strategic and financial issues. We look forward to the contributions he will make to the firm and to our clients," said Barclays Capital head of investment banking Skip McGee in an announcement of the hire.

After ex-AIG CEO Marty Sullivan found a new perch at Willis Group, it looks as though the cadre of CEOs whose companies were crippled by the credit crisis are getting a new breath of life this week.

In January 2007, Mr. Ratner, Nets owner and developer of the planned $4.9 billion Atlantic Yards project in Brooklyn, trumpeted a record-setting naming rights deal for the new $900 million basketball arena that would be the centerpiece of the project.

While Mr. Ratner's firm never released an exact number, it was widely reported that British bank Barclays would pay nearly $400 million over a 20-year deal to slap its name on the venue, which, at the time, was to be designed by stararchitect Frank Gehry. The move was a huge win for Mr. Ratner, a record price that would bring in a big injection of funds with a well-respected name.

But now, after a historic economic crash, lengthy project delays, and the dropping of Mr. Gehry as project architect, there's reason to think the deal is less than it once was.

According to documents related to the arena's financing that were released Thursday, Barclays will pay $10 million a year to the arena's owner for the 20-year deal. Looking solely at this, it would seem to make it a half-off discount, but there are a number of other untold fees paid directly to the Nets as part of the naming rights, according to the documents. Forest City Ratner declined to provide those numbers, and a spokesman for Barclays declined to comment.

"Naming rights agreements always include the arena, team and hospitality assets. Ours are the same," Joe DePlasco, a Forest City spokesman, said in a statement.

Whatever the fees paid directly to the team, it's hard to think that they're twice $10 million a year. After all, a consultant's study attached to the documents refers repeatedly to the transaction as a $200 million naming rights deal, and uses that number as a basis of comparison for other naming rights deals.

IF THERE WAS INDEED a revision, it came either at the end of 2008 or earlier this year. The original 2007 contract expired at the end of 2008, but was extended after Barclays and Mr. Ratner's firm, Forest City Ratner, renegotiated. At that time, new terms were not released, though Barclays released a statement saying it was "unwavering in its commitment" to the project. The financial documents released now say the deal was again amended in August 2009.

The language in those documents—a preliminary offering statement for $500 million in tax-free bonds, for which Mr. Ratner is now attempting to find buyers—say that Barclays will pay $10 million a year, which is by far the largest committed revenue stream so far. The offering statement lists $35 million in contracts that have been signed thus far for various other sponsorships and suite licenses, including the naming rights deal.

Based on numbers compiled by a market study—which is attached to the bond documents—the Barclays Center deal is the largest ever for an arena with just an NBA team, but is more comparable to a few other arenas that host both NBA and NHL teams. In 2010 dollars, Atlanta's Philips Arena has a 20-year contract worth $256 million, according to the market study's author, CSL, and Boston's TD Banknorth Garden is worth $185 million. When the size of a metro area is taken into account, according to CSL, the Nets naming rights deal is only the 11th-largest of NBA-only arenas.

The whole 772-page document is here (the naming rights bit starts on p104), complete with market studies and estimates.

A few other tidbits: The developer forecasts $23 million a year from luxury boxes and suites, and $32 million a year from concessions. There's also a planned $1 "green building fee" to be tacked on to every event ticket—Nets or otherwise—which is estimated to bring in $1.9 million a year.

Mr. Ratner must sell his $500 million in bonds before an I.R.S.-imposed deadline of Dec. 31. His bonds were rated investment grade by two ratings agencies earlier this week, and now the company will market and try to sell the bonds to investors. There are also at least three other lawsuits pending, though officials and others involved with the project are doubtful that the litigation will be successful. 

Barclays Center Project POS

The dun-colored, 23-story 475 Fifth Avenue, which lender Barclays Capital earlier this year took back from Westbrook Partners and embattled developer Joseph Moinian, is now quietly letting it be known that it will part ways with the office tower for the aforementioned sum, say industry sources.

Mr. Moinian and Westbrook closed on his purchase of the building on April 2, 2007, amid an epic buying spree, paying $160 million.

It's a lovely-looking, 84-year-old building, nicely located at the southeast corner of Fifth Avenue and 41st Street, across from the New York Public Library and the amenity-strewn lawns of Bryant Park. But it's also a fairly empty building, according to sources. The price in question comes to about $381 for each of its 275,284 square feet. 

Cushman & Wakefield's capital markets group recently reported that the average price for one square foot of nice office space in midtown was $392. Last year, it was $941.

A spokesman for Barclays Capital, declined to comment. So, too, did Robert Lapidus of L&L Holding Company, which manages the tower for Barclays.

drubinstein@observer.com