At noon on Jan. 7, about 50 retail brokers and landlords trickled into the Harvard Club on West 44th Street for a members-only Real Estate Board of New York Retail Committee luncheon, the first of the year.
There was buttery sea bass, green beans and potatoes, which the more figure-conscious among them abjured. More to the point, committee chairman and Cushman & Wakefield broker Joanne Podell asked these consummate real estate insiders to complete an anonymous survey about how they felt the local retail market would fair in 2009.
After the members were done eating, Ms. Podell announced the results. There seemed little doubt among attendees that rents would fall.
But by how much in primary markets like 34th Street, between Fifth and Seventh avenues, or Madison Avenue in the 50s? Ten percent? Twenty percent? More than 20 percent? The majority of the members responded 20 percent.
And in secondary markets like First Avenue between 59th and 86th streets, or Second Avenue in the 60s and 70s? The majority predicted that rents through 2009 would drop more than 20 percent.
The brokers and landlords were also asked when this bummer of an economy would begin to recover. Most said 2010. About a quarter said 2009. And about a quarter said 2011, something Ms. Podell told The Observer she found surprising.
Perhaps the most telling question was, how many tenants have been requesting rent reductions? A few? Several? Or many? A majority responded “several.”
“The mood was everyone was thinking that deals would get done and that … landlords would consider, depending on the tenant, a rent reduction if it’s legitimate,” Ms. Podell said. “That will be in isolated circumstances, not across the board.
“We’ll see a lot of creativity in the market that wasn’t there before,” Ms. Podell added. But deals will happen. She should know. In the past five months, she said she’s closed four deals. “Significant ones … The world did not end.”