Developers Optimistic at 5th Annual Masters of Real Estate Conference Despite Political Uncertainty
There’s “something major” happening in every submarket in the city, but will gridlock in Washington and the impending mayoral election thrust the city back into recession – or even into a backdrop of crime and bankruptcy reminiscent of the 1970’s?
Not a chance, said a group of the city’s top real estate developers at Observer Media Group’s fifth annual Masters of Real Estate conference today, responding with charged optimism to a question posed by moderator Bill Rudin of Rudin Management Company.
Politics was clearly on the minds of the city’s top real estate professionals, as Washington works through the day to hash out a deal to avert a U.S. default.
“[It’s] inexplicable and very frustrating and the total antithesis of how we in New York have come together to solve problems in the last 30, 40 years,” Mr. Rudin said.
But bullish overtones regarding growth throughout Manhattan’s once underserved neighborhoods – and the blossoming boroughs – overtook the dialogue among the developers.
Harry Macklowe of Macklowe Properties called the transformation of the West Side over the past 10 years (and Related Companies’ project there) “truly amazing.” Gary Barnett hinted that something like One57 might be in the cards for Extell Development in Brooklyn, declining to elaborate beyond saying, “We’re looking.”
Mr. Macklowe sided with the theory that the “high tide raises all boats” regarding both the high-end condo market flourishing throughout Manhattan, as well as the growth in Long Island City, Queens, Harlem and Brooklyn.
Jared Kushner of Kushner Companies and publisher of Observer Media Group, host of the event, filled in for an absent Larry Silverstein, giving praise to the work of David Walentas in creating “a true culture” in DUMBO.
A joint venture between Kushner and RFR is developing a cluster of mixed-use properties for creative uses there, where the response from potential tenants has been “more overwhelming than any other project I’ve ever worked on.”
“Manhattan is a city about money,” Mr. Kushner said. “Brooklyn seems to be developing a culture of creativity.”
Just days before the mayoral election, Bill de Blasio has emerged as a front-runner, Mr. Rudin noted, which comes after the Democrat battled ideologies with Republican Joe Lhota last night, previously edging out Democrats Bill Thompson and Christine Quinn, among others.
The developers reflected on Mayor Michael Bloomberg’s 12 years at the helm with praise, expressing overall optimism for a continued pro-development environment, continued rezoning, and incentives to create more affordable housing, regardless of who the next mayor is.
“A great city needs to provide for the poorer residents too,” Mr. Barnett said, though, he added, “I think you can look forward to seeing taxes raised one way or another.”
In a later panel, Mort Zuckerman of Boston Properties, though afflicted by a case of laryngitis, had no trouble voicing a dose of pessimism, egged on by moderator Andrew Farkas of Island Capital, who stated, “You sound sexy.”
Mr. Zuckerman referred to the country’s elected officials as the “jokers in Washington,” noting that Washington’s inability to reach a budget deal will undermine the economy for years to come, making him “even more pessimistic” than he was before.
Artificially low interest rates have kept rents high, others agreed. But that has made up for “a lot of the problems” in the market, said Douglas Shorenstein of Shorenstein Properties, noting that Washington has delivered a “shot in the foot,” not a “shot in the head.” Not yet, anyways.