Mr. Speyer’s father, Jerry Speyer, served as board chair from 1986 to 1988. His grandfather, Robert Tishman, was board chair from 1972 to 1975. That record of service to one of the city’s most creative and dynamic industries speaks volumes about the family’s commitment to the city and its people.

It seems like ages ago, but there was a time when Mr. Speyer had a notion that he would break with the family tradition by becoming, of all things, a newspaper reporter. We’re delighted to note that he tried his hand at The New York Observer, where he showed all the energy and enthusiasm that he has since brought to the city’s real estate industry.

It wasn’t long before Mr. Speyer left us for bigger, although perhaps not better, things. Since joining the family business in 1995, Mr. Speyer has been a top-flight executive as well as an engaged civic patriot. His quiet work on behalf of a variety of public policy initiatives and private philanthropies mark him as one of the city’s most outstanding young people.

We’re happy to count him as one of our alumni, and we’re delighted that he is following his the footsteps of his elders.

It’s clear that the committee has struck a nerve—it was able to raise $17 million last year, and it spent $12 million. No doubt you’ve seen the committee’s television ads, and if they seem like campaign commercials for Gov. Andrew Cuomo, well, that’s not a coincidence. Many of the committee’s leaders, including co-chair Rob Speyer, have close ties to the governor. The governor’s agenda and the committee’s are one and the same.

Here’s the problem: If the committee truly is serious about changing the dysfunctional culture of state government, if it is, in fact, in favor of greater transparency in political decision-making, if it really wants to set an example, it simply cannot continue to play by the old rules.

But it is doing just that. State law does not require the committee, a private lobbying group, to divulge the names of its donors. That means we don’t know who is giving money—and why. That’s the kind of culture Governor Cuomo has criticized, at least by implication, when he talks about bringing real change to Albany.

Mr. Cuomo has declined to call on the committee to release a donor list voluntarily. The issue arose when news reports revealed that gambling interests donated $2 million to the committee. The governor insists that the donations have had nothing to do with his push to expand gaming in New York.

We take the governor at his word. But still, as he surely knows, part of the problem in New York is one of perception. New Yorkers have good reason to believe that money talks in matters political. Mr. Cuomo said he is working with all sectors of the state to create jobs—“that’s what it’s all about,” he said.

True enough. But it would do a world of good if the committee announced that moving forward it will disclose all of its donors. The committee’s current donors should be encouraged to overcome their shyness by self-disclosing their contributions, but the committee shouldn’t force the issue for those who have already given. Instead, it should focus on setting new rules for new donors: If you give to the Committee to Save New York, your name and the size of your donation will be available for public inspection.

That’s how transparent government ought to operate. Moving forward, the Committee to Save New York should practice what Governor Cuomo preaches.

5:45 The 116th annual REBNY banquet is just getting started at the New York Hilton. Chicago Title is having an invitation-only party on the building’s second floor.

5:46 As usual, the night’s official festivities begin with a cocktail party in the room adjacent to the Hilton’s main ballroom, where the dinner is held. Jason Muss, a principal at Muss Development, stands near the entrance to the room with Jared Kushner (owner of The Commercial Observer), Jared’s wife, Ivanka, and Fried Frank chief Jon Mechanic. “I love this party. It’s a great place to catch up with people,” Mr. Muss says.

5:50 The cocktail reception is quickly filling up. Simon Ziff, a principal at the financing company Ackman Ziff, stands near the open bar with his wife. “It’s overwhelming,” Mr. Ziff says. “Think of all the people here. A few seconds to say hi to each. That’s a lot of seconds.”

6:00  Hal Fetner, a developer who is building two prominent residential buildings with partner the Durst Organization, steps over to the bar. “The feeling in the room is always tied to the health of the market,” he says. So what’s the vibe? “Ask me later. It’s too early to tell. But I think things are good.”

6:01 John Santora, an executive at the real estate services firm who recently helped negotiate an agreement between landlords and the union that represents building employees, 32BJ, is chatting with C&W appraisal expert Brian Corcoran. “A lot of people worked on that deal,” Mr. Santora says of the negotiations. “I can’t take the credit for it.”

Steve Spinola, REBNY’s president, greets guests in the main room of the cocktail space. “We had to put a few tables upstairs,” Mr. Spinola says, indicating that attendance at the banquet has picked up from last year. “We got a lot of last-minute calls from people who wanted to come.”

6:17  Alan Weiner, the group head of Wells Fargo Multifamily Capital, one of the biggest lenders in the city, is chatting busily with Rob Speyer, one of the chief executives of the real estate firm Tishman Speyer.

Eric Deutsch, the former head of the Downtown Alliance who now is an executive at Montparnasse 56, a builder of observation decks, surveys the crowd. “My first job out of college in the early 1990s was with REBNY,” he says. “The market was terrible then and they barely had anyone at the banquet. They made me sit up front during the dinner to make it seem like people were here.”

6:30  Congresswoman Carolyn Maloney strides in. “I just secured us $300 million, a high-speed-rail grant to develop a line between Boston and New York. It’s very exciting,” she says, taking a crab leg. After she’s done with the morsel of meat, she holds the shell and looks for the waiter. “Where do I put this thing?”

6:32 The room’s cocktail banquet is about 75 percent full.

6:45 Robert Lapidus, an executive at the real estate investment company L&L Holding Company, becomes enraged when The Commercial Observer asks him if he is bidding on a leasehold interest in the Flatiron office building 114 Fifth Avenue, as is rumored. “We’re not here to talk about fucking business!” he yells, grabbing The CO’s notepad and tossing it.

Gary Green, head of the building services company Alliance, briskly and very politely retrieves the notebook while Mr. Lapidus hurls epithets at The CO. Acting like a true gentleman—and also looking the part in a finely cut tuxedo—Mr. Green apologizes for his friend. “You can’t do that! Knucklehead!” The CO overhears him say to Mr. Lapidus.

6:46  Kenneth Fisher, a partner at the real estate investment company Fisher Brothers, tells The CO that this is the first REBNY banquet he has been to in five years. “Every time this year, I’ve been playing golf in the desert [at the Bob Hope Classic].”7:00

Jeff Roseman, a retail leasing executive at Newmark Knight Frank, squeezes through the crowd. “It’s a great place to see old friends.” He greets Steve Green, the founder of the city’s biggest landlord, the REIT SL Green.

7:05 “This is my childhood,” Helena Durst, looking elegant in a flowing dress, says of the banquet. “Do you like Christmas? Do you like Sunday dinner? That’s what this is for me. I have so many memories of coming to this party.”

7:09 Deputy Mayor Robert Steel and Councilwoman Jessica Lapin walk through the room together, busy in conversation.

7:15 Guests are being pushed out of the cocktail reception into the main dining room. The dinner is about to begin.

7:16 “Do I like this party? It’s OK,” Kathryn Wylde, head of the Partnership for New York City, says. “I go to a lot of parties.”

7:25 The CO bumps into Woody Heller in the men’s room and mentions to him a rumor that Will Silverman, Mr. Heller’s colleague at Studley, doesn’t sit at a desk but stands. “It’s true,” Mr. Heller says. “He has a swivel desk that can be lifted and he stands at it rather than sits. He says it’s more comfortable.”

Does Mr. Heller do the same thing? “I pace,” Mr. Heller says.

7:40 The crowd, now dense, is heading into the main ballroom.

7:41 Bruce Mosler, a top leasing executive at Cushman & Wakefield, chats with friends outside the ballroom. “A lot of my good friends are in real estate, so this is a fun night for me, I get to see them all,” Mr. Mosler says.

7:42 Paul Pariser, a chief executive of the real estate investment company Taconic, stands nearby. Known as an avid skier, The CO asks him if he’s been to Colorado yet this season. “There’s no snow!” Mr. Pariser replies.

7:50 Howard Michaels, of the financing firm Carlton, is making his way into the ballroom. “If you’re in the real estate business and you’re not at this party, you have to have your head examined,” Mr. Michaels says. “Want to know something? I almost didn’t come. That was the pep talk I gave myself.”

8:00 Already murmurs are going around about where the after-parties are going to be. “I’m not going to an after-party,” says Bob Knakal, chairman of the brokerage firm Massey Knakal, which during the boom years threw epic REBNY parties. “I have dinner plans with my wife.”

8:05 Steve Berliner, an executive at the brokerage company Studley, flashes The CO a stack of his business cards, which he plans to hand out. “Tonight is the best recruiting night of the year,” he says. “I started getting recruited to Studley six years ago at this party.”

8:20 The CO tells Amira Yunis, a retail leasing executive at CBRE, that she looks stunning in her black dress. It’s true, the former model does. Asked what her plans for the year are, she jokingly grabs The CO by the shoulders and shakes, “Make millions and millions and millions of dollars!”

9:00 The ballroom is full. But few people are eating. In the center of the room, Mitch Arkin, an executive at C&W, is chatting. “I haven’t eaten yet,” Mr. Arkin says. “I’m not going to eat.” What is he using for fuel, a hungry CO asks. “Adrenaline.”

9:10 “After-party is at Nobu,” Matt Astrachan, an executive at Jones Lang LaSalle, tells his colleague Mitch Konsker and C&W retail executive Brad Mendelson. “JLL party at 10!” Mr. Mendelson booms.

9:15 Dessert is being served. Some kind of chocolate-coated-ball concoction. The CO is still looking for dinner, finds a steak and eats it. It’s not as rubbery as rumored, though it’s certainly overdone.

9:45  Steve Durels, SL Green leasing chief, and Paul Glickman, an agency leasing specialist at JLL, walk out chatting. The banquet is winding down.

10:00 Kent Swig, with a closely cropped beard and carrying a few extra pounds, makes his way out. “I’m having a beer,” he says.

dgeiger@observer.com

Then came the bust, and the list was notable more for who had fallen off than for who had stayed on. Last year’s tally was demarcated by government—President Obama was No. 1—and by those adapting to survive. The phrase “money on the sidelines” made numerous appearances.

View slideshow >

This year, the list, like the industry it chronicles, is very much in motion. Pinning down who is up, if anybody, and who is down the most changes by the day. This represents our take on the most powerful people in New York real estate right now.

And yet about three-fourths of the people here are returnees, which says something about the closed club that is New York real estate. Old money is heavily represented, able as it has been to weather the recession—even when it has botched deals epically, such as Jerry and Rob Speyer (No. 11) with Stuy Town. The Speyers join old money like Douglas and Jody Durst (No. 8); Richard LeFrak (No. 10); Peter and Anthony Malkin (No. 18); Howard and Edward Milstein (No. 38); and Bill Rudin (No. 24).

There are new people. Carlos Slim—according to some, the world’s richest person—clocks an appearance (No. 13), having just made a sudden splash in the biz. Another foreigner with billions to immolate: Mihkail Prokhorov (No. 43), erstwhile Nets owner and would-be Nets arena developer. And, speaking of Stuy Town and the Speyers, Charles Spetka (No. 32) chairs the distress-hungry firm overseeing that most historic of foreclosures. Also, welcome media enthusiast Sam Zell (No. 19), reluctant heir Stefan Solow (No. 56), M.T.A. chairman Jay Walder (No. 64) and Israeli magnate Nochi Dankner (No. 88).

While Mr. Obama did not make the list this year, government is represented fairly strongly, with perennial flower Michael Bloomberg hitting the top 10 again. Looming six spots behind him is probably the soon-to-be most influential public figure in New York State: Andrew Cuomo (No. 15). Other apparatchiks and pols include Deputy Mayor Robert Lieber and Economic Development Corp. president Seth Pinsky (together at No. 73); and Transportation Commissioner Janette Sadik-Khan (No. 95).

As usual, the list remains arctic white and terminally male. (How does this keep happening in the world’s most diverse city? Even the suites of Wall Street—and of the White House—claim more diversity.) There are 12 women—the most ever—with CBRE tristate chief and REBNY chair Mary Ann Tighe the highest ranked at No. 7, and the chair of City Planning, Amanda Burden, in a distant second at No. 34. Nonwhites? Governor Paterson (No. 55), who, dear reader, will likely not make it next year, and Korean-American developer Young Woo (No. 94)—and that’s just about it.

Brokers, the middlemen (and, on occasion, middlewomen) of the city’s deals, are less represented than landlords and investors—there has just been less work to go around. Brokerages themselves are amply represented, in the form of their chief executives or chairs. These include residential ones like Pam Liebman (No. 66) of the Corcoran Group; Howard Lorber and Dottie Herman (No. 63) of Prudential Douglas Elliman; and an engorging number on the commercial side, including the boys from Newmark Knight Frank (No. 26), Peter Riguardi from Jones Lang LaSalle (No. 27) and Mitchell Steir and Michael Colacino from Studley (No. 28).

Institutionally, the same names showed up as in previous years, such as Lee Bollinger (No. 90) of Columbia; John Sexton (No. 78) of N.Y.U.; Timothy Dolan (No. 76) of the Roman Catholic Archdiocese; and James Cooper (No. 79), the Episcopalian rector of Hudson Square–controlling Trinity Church.

The No. 1 spot, supplanting the president, belongs to Stephen Ross, chairman of Related Companies. His firm seems to be everywhere about New York, particularly on the far West Side. There are train tracks there now, slightly below ground level, in an area to be avoided after dark—or in broadest daylight. But Mr. Ross envisions 13 towers on two platforms producing 5,000 apartments and 6 million square feet of office and retail space—a city within a city, 50 percent bigger than Rockefeller Center.

That’s some change right there. Vision, too.

A final few notes on the list. There are 138 names amid the 100 slots. Of those, more than 25 percent are new; the rest are returnees. If someone made the list last year, that ranking is next to their entry in parentheses. The list was chosen by The Observer, and is subjective. Feedback can be given in the comments section below.

Discuss.

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To flip through the pages of the 2006 offering book for potential buyers of the 11,200-apartment Stuyvesant Town and Peter Cooper Village-a deal that has devolved into the largest individual property default in modern history-is to immerse oneself in an historical delusion, one that, from today's privileged vantage point, appears as likely as Iraqi WMDs.

The book wove the strands of possible Stuy Town revenue into a real estate dreamscape, one in which the largely rent-regulated complex could become a wealthier community, complete with an elite private school, gourmet grocery shops, private spas, gated communities, Santa Cecilia granite countertops in every apartment.

"With the surge in market rental increases showing no signs of abating, there is immense upside potential, especially for stabilized units rolling to market rates," reads the 73-page offering book, prepared by Darcy Stacom, one of the city's top investment sales brokers.

If the failed $6.3 billion Stuyvesant Town deal-sealed in late 2006 by seller MetLife and buyers led by Tishman Speyer-is emblematic of nearly everything that went wrong with the real estate world during this most recent boom, the marketing of the historically middle-income property is emblematic of the unexamined contribution of top brokers to the era's fantastical mind-set.

As conversations with numerous executives involved with the bidding process illustrate, the role of Ms Stacom and other advisers was essentially to pour lubricant into an ever-accelerating dealmaking machine, one that would eventually implode.

Ms. Stacom, 50, is a real estate titan in her own right, as admired for her business acumen and salesmanship as she is feared for her mercurial temper.

New York born and Greenwich raised, Ms. Stacom, who declined comment for this story, was nurtured in real estate. Both of her parents, Matthew and Claire Stacom, were Cushman & Wakefield brokers. Her father most famously consulted in the development and leasing of the Sears Tower (now the Willis Tower). When she was 14, she worked in the Cushman & Wakefield mailroom.

She began her brokerage career at Cushman & Wakefield, defecting in 2002 for archrival CB Richard Ellis. Her sister, Tara, remains at Cushman. Her husband is a broker at Jones Lang LaSalle. It wasn't easy being a woman broker in a real estate world where men, even now, behave like extras in Mad Men. In 1996, when she was pregnant with one of her daughters, Ms. Stacom pitched a deal to a potential client, only to be asked what would happen were she to have complications during childbirth. She didn't get the gig. In interviews, she prides herself on her eccentricities: She prefers colorful skirts to business suits, funky costume jewelry to the real stuff.

Even so, she did well for herself. Arguably, there is no more fearsome commercial broker than Ms. Stacom. In 2005 alone, she sold 195 Broadway for nearly $300 million. She sold the Verizon Building at 1095 Avenue of the Americas for $500 million. She sold One Madison Avenue for $1 billion. She sold 575 Fifth Avenue for $385 million. She sold 25 Broad Street for more than $200 million. She sold 230 Park for more than $700 million. And that's an abbreviated list. One can only guess at the commissions she earned along the way.

Ms. Stacom also built relationships that would figure in the story to come, performing work for both MetLife and Tishman Speyer. So it likely seemed only natural to bring the two together in what she must have thought of as her career's crowning achievement.

One industry executive spoke of a close relationship between Ms. Stacom and Tishman Speyer. "They had never bought a residential building before. They relied on her."

Central to Ms. Stacom's pitch for the complex was that it could be unshackled from rent stabilization (at the time, three-fourths of the apartments were rent-regulated). The offering book repeatedly refers to the complex's future as a "market rate master community."

Further, as the complex's "population evolves in response to deregulation, new ownership will have a unique opportunity to put its personal stamp on Manhattan's largest apartment complex." Among the suggested "creative strategies"? "Use of air rights"; "Gated Communities"; "Adding doormen to further promote the notion of a high-end residential complex."

The offering book suggested that such innovations would result in a remarkable influx of money. It projected a 2007 net operating income of $167 million; Tishman Speyer, led by co-CEOs Jerry and Rob Speyer (Rob took the lead on Stuy Town), turned out a yawning $59 million short of that, bringing in $108 million at a time when rents were still high. By 2009, the book projected $252 million; the analyst firm Realpoint has estimated revenue at just $129 million.

Implicit but not specifically stated in these projections was that the rate of deregulation could be dramatically accelerated, a necessarily abrasive effort that tenants dislike. "I think it was pretty clear that the information was projected on what it could be if you managed to get everybody out-that's how people bought it," said one executive familiar with the marketing of the deal in 2006. "When you look at those numbers, the only way it makes sense is if you got rid of the current tenants."

And that was the idea of Stuy Town's eventual buyers. In their loan documents, the Tishman Speyer-led team assumed they could deregulate more than 3,000 units in the four years following the sale, a goal that proved wildly unattainable. By June 2009, the owners were about 2,000 units short of their 2011 goal, as the prior manager for MetLife, Rose Associates, had apparently done a far more thorough job of removing obvious illegal tenants than suspected. To add insult to injury, the courts have ruled all of the former and current owner's deregulation efforts illegal, returning all units to rent regulation. And beyond that, the complex had faced problems filling its apartments, as more units went vacant than at any time at the property in years.

Following the real estate market's spectacular crash, Ms. Stacom apologized to some landlords for the timing of the late-boom deals now underwater.

But did she have anything to apologize for? Wasn't she, after all, just doing her job really, really well?

Indeed, it was the world's biggest banks and the city's best-known landlords who clamored over each other to actually bid on the property, after a presumably careful look of their own at the finances. And it was Tishman Speyer and partner BlackRock, supported by hundreds of millions from pension funds and other investors, that actually signed the documents to receive the property.

"I think we and others underestimated the difficulties of bringing that asset from stabilized market rents to unstabilized market rents," said Jeff Barclay, a managing director at ING Clarion Partners, which was part of the second-place, $5.3 billion bid with Apollo Real Estate Advisors. "Darcy did her job-I don't think she oversold, I don't think she misrepresented. Everything that a broker gives you has caveats."

"My sense is the real culprit in all the madness that happened in the commercial real estate market was the combination of cheap, plentiful debt capital and the willingness on the part of buyers and lenders to utilize it and provide it so aggressively," said Michael Knott, a senior analyst at Green Street Advisors. "There was no sense of risk. I also wouldn't dismiss the impact that 'OPM' [other people's money] played, given the incentive for advisers to put capital to work. This is especially relevant if there is no penalty for doing bad deals in terms of future fund-raising. If Tishman raises boatloads of money in the future, which seems likely, did they really lose anything by gambling on Stuy Town?"

Perhaps not. Yet, if the boom was an orgy of real estate profligacy, with institutional investors and reputable real estate dynasties drunk on easy money, Ms. Stacom and other top brokers, in the role of Bacchus, helped the party roar.

"It's one thing to accept that people renting illegally could be pursued," said a real estate executive familiar with Stuy Town. "But she had such high turnover rates."

Then again, if Ms. Stacom hadn't served as Bacchus, someone else would gladly have filled the role.

Even amid its epic default, and the subsequent transfer to mortgage holders, many in the industry are pointing out Stuy Town's potential. Sure, all the apartments may now be re-regulated thanks to a court decision, but that requirement is set to be lifted within the next decade, giving the complex the potential to be a market-rate community once again, if not the tonier enclave imagined in the 2006 offering book.

Which helps explain the names circling to be the next Rob Speyer. Would-be buyers who have publicly declared their interests include Richard LeFrak, Wilbur Ross and Donald Trump.

ebrown@observer.com,
drubinstein@observer.com

Each shows a fresh, dismally depressed value for the property ($1.99 billion based on current income), and tells of the new low level of the reserve fund meant to cover debt payments ($24 million).

But within the numbers in the latest report, released this week by the firm Realpoint, is another tale that serves to illustrate how this deal was, in retrospect, doomed from the start, even beyond the inconvenient timing of buying at what turned out to be the market's sharp peak.

The report found that as of June 30, for every four deregulated market-rate apartments in the 11,000-unit complex, there are now six rent-stabilized apartments, a level far below the landlord's expectations.

This ratio-the proportion of deregulated apartments to stabilized apartments-had been a major component to making the deal work on paper when Tishman Speyer, controlled by co-CEOs Jerry and Rob Speyer, planned out the purchase three years ago. At the time of the sale, the vast majority of tenants (73 percent) had their rents restricted by the rent-stabilization program. These apartments are far more valuable when deregulated, which can generally only occur when they turn vacant or when their tenants are evicted for violating their leases.

But the Speyers saw this as territory with huge revenue potential, and they were determined to step up efforts to rout out stabilized tenants who had illegal subleases or second, primary homes.

At the time of the late 2006 sale, there were 8,038 stabilized apartments and 3,189 deregulated units. The latter had grown over time, and during the four years prior to the sale, the previous owners had deregulated an average of 6 percent of the stabilized stock annually, according to Realpoint.

The Speyers were far more ambitious. Based on statements in a 2007 document attached to debt on the property, they planned to deregulate an additional 3,000 apartments over the ensuing four years, a pace that comes out to more than 9 percent of the stabilized apartments annually. They hired a private detective to scour public records and find stabilized tenants who might not actually live in the complex; they tried to remove far more tenants for violations than the prior owners had.

The result of all their efforts: The pace of deregulation actually slowed.

According to the Realpoint figures, by the end of June, Tishman had a total of 4,440 deregulated apartments in the complex. At this rate, Stuy Town and Cooper Village should have about 5,000 deregulated apartments at the start of 2011, a checkpoint at which the Speyers had assumed 6,397. (Each deregulated unit in 2006 brought an average $1,500-plus per month more than a stabilized apartment.)

The inherent difficulties in tracking down tenants who are violating rules and illegally subletting their apartments can probably explain much of the slower rate. The easiest ones to find-through public records of a second home, for instance-would be removed quickly at the start, or by the prior owners.

There has also been strong resistance in public by the tenants, and the local councilman, Dan Garodnick, is always eager to hold a press conference decrying the latest efforts of what the tenants say is an overaggressive attempt to oust tenants.

Regardless of the reasons, the Speyers have clearly had trouble deregulating the apartments, one of the factors in the property's high-profile saga. (A pending lawsuit could actually bar deregulation, making the deal's finances that much more dire.)

Based on the Realpoint analysis, the property is now valued at $1.99 billion, based on numbers from the first half of 2009. That figure is down from an estimate last month of $2.13 billion, which, like the $1.99 billion figure, is based on current cash flows. (The deal assumed that by January 2011, the value by this measure would be $5.17 billion.)
As for the reserve fund, which was a proud $400 million back in November 2006: As of this month, it's $24.4 million, an amount that could last anywhere from days to three or four months, based on the amounts withdrawn from the fund in recent months.

"If they continue at the current rate, they'll be depleted right around December," said Steve Kuritz, author of the Realpoint report. "It could go earlier, it could go a little later."

ebrown@observer.com

Amid increasingly apocalyptic prophecies about the fate of  New York’s commercial property market, more than a dozen “Masters of Real Estate” convened at the Metropolitan Club on Tuesday for an eponymous conference hosted by The Observer devoted to making sense of the market’s troubles. The major players appear to have emerged from the recessionary trenches leaner, shell-shocked, and hungry for deals, though some panelists were more upbeat than others about the prospects for a long-term recovery.

Tishman Speyer CEO Rob Speyer, William Rudin, president of Rudin Management, Richard LeFrak, chairman of the LeFrak organization and Related's Stephen Ross were among those who spoke on panels like "How Will New York Real Estate Be Re-Invented," evincing a positive outlook while expressing some caution that the real-estate community would have to watch government closely

Regardless of the panelists’ outlook, “people are scratching their heads saying, ‘Where’s the stress,’” observed SL Green’s CEO, Marc Holliday, who moderated the second panel on “When/Where Will the Smart Money Come Off the Sidelines.

Some participants argued that even if the market does recover sooner rather than later, investors cannot expect the outsized returns they became accustomed to when New York property values were at their peak in 2006 and 2007.

editorial@observer.com

Hat tip Curbed.

The Tishman Speyer kingdom, already extending to more than a dozen U.S. cities and three continents, will now raise a flag on the far West Side of Manhattan. The Metropolitan Transportation Authority yesterday declared the longtime New York real estate firm the developer and owner-to-be of its 26-acre rail yards, Manhattan’s largest chunk of undeveloped real estate, bounded by 11th and 12th avenues, and 30^th and 33^rd streets. [See our coverage from Wednesday here, here, here, and here.]

Now the fate of the West Side rests in large part in the Speyers' hands, as officials and real estate executives say the successful creation of a new business district a few avenues west of America’s largest central business district depends on the development of the rail yards, long eyed as the site for something other than open air.

That the site went to Tishman Speyer, led by Jerry Speyer and his son Rob Speyer (who worked at The Observer some time ago), fits in well with recent real estate history in the city. The giant family seems to buy most everything giant, expensive and high profile. The firm bought Stuyvesant Town and Peter Cooper Village, 11,200 apartments, in late 2006 for $5.4 billion; they picked up the MetLife Building at 200 Park Avenue in 2005 for $1.7 billion; they have control of the Chrysler Building; and in 2001 they took over Rockefeller Center.

The last on that list, the Art Deco palace built at the start of the Great Depression, is a fitting holding. Former Deputy Mayor Daniel Doctoroff, and others, dubbed the rail yards a potential 21st-century Rockefeller Center, and Governor David Paterson made the direct comparison at the start of his remarks at the site yesterday.

And while architectural critics have not been so inspired by the Helmut Jahn and Peter Walker-designed master plan (The Times has a scathing piece today), Rob Speyer, who led Tishman’s negotiations with the M.T.A., clearly seemed honored by the comparison. “It’s humbling to hear the Rockefeller analogy, because what the Rockefellers did before and since is without precedent, and we’re very confident that we’re going to do something here that in its own way is going to be spectacular,” he said at the press conference yesterday.

Rob and Jerry Speyer have never been eager to get their names and photos in the papers. Calls to their spokespeople almost always seem to result in a “no comment,” and at the press conference, Jerry Speyer, the chairman and CEO, never stepped up to the podium to offer any remarks, though Rob Speyer said a few words.

After the conference, when Jerry Speyer took questions from reporters, he was reserved and to the point in his answers, saying little more than needed to be said.

One reporter said to Jerry Speyer that when M.T.A. officials spoke earlier about the deal, they left the status of a possible partnership with Morgan Stanley vague.

“We have to leave it that way,” Mr. Speyer responded.

Who else would move in besides financial firms?

“Anybody who can afford the rents.”

Where did the firm get all its financing?

“I can’t tell you about it.”

The Speyers will have plenty more opportunity to talk about their plans: The western portion of the rail yards must be rezoned, and that means going through the city’s lengthy public approval process.

The father-son duo acknowledged there was flexibility within their master plan to change during the public process, and they did not commit to strict adherence of the design guidelines crafted for the site, saying only that they liked them, though they also liked aspects of other teams’ plans (two of which did not follow the guidelines).

The land-use approval process for the western yards is slated to finish up in late 2009 at the earliest, though once Tishman Speyer finishes the deal, shovels can hit the ground on the eastern portion.

There’s a bit more work to be done on the deal between the Metropolitan Transportation Authority and Tishman Speyer over the West Side rail yards, as the MTA did not give, as it once planned to, a “conditional letter of designation” to Tishman today for the deal. With some final details yet to be ironed out, that designation comes in the next 14 days, to be followed by a contract within 120 days after that.

The MTA board, which normally would approve a conditional letter, gave MTA director Elliot Sander the authority to issue the letter himself (not all that unlike Congress’ 2002 vote to authorize President Bush to go to war in Iraq) within the next two weeks. The conditional designation, however, must conform to a set of terms outlined today that include the price: Tishman Speyer will pay about $1 billion to the MTA.

The details were made public at the MTA board meeting this morning.

More on the yards to come.