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Review of a regrettable year

After Wall Street's fall, trouble catches up to New York City real estate

By Gabby Warshawer

November

A report released by real estate appraiser Mitchell, Maxwell & Jackson about Manhattan residential sales volume in September and October did not auger well: The firm found that the number of contracts signed in the two-month period was down 75 percent from the same time in 2007. High-end residential brokers braced for an austere Wall Street bonus season as a report from New York-based compensation consulting firm Johnson Associates predicted that year-end incentives for Wall Street's senior managers would plunge by up to 70 percent, while average bonuses would likely drop by 20 to 35 percent. Some condo developers tried to boost sluggish sales by offering price protection programs, guaranteeing buyers a discount at closing if prices went down, a strategy common in troubled markets in Florida but new to the city. The biggest residential and commercial brokerages — including Prudential Douglas Elliman, the Corcoran Group, CB Richard Ellis and Cushman & Wakefield — announced that they were canceling their holiday parties, with the heads of most firms saying it wasn't appropriate to celebrate given the troubled economic climate. Despite the fragility of the commercial market, however, one of the city's largest residential firms, Halstead Property, announced that it would form an investment sales division and enter the world of commercial real estate for the first time. Meanwhile, three massive projects were approved by the City Council: The 111-block rezoning of the Lower East Side and East Village, the $3 billion redevelopment of Willets Point in Queens, and the 30-acre, largely affordable Hunter Point South redevelopment, also in Queens. A big real estate deal, however, was put on pause, when the MTA and the Related Companies failed to sign a contract for Hudson Yards. At least one other boldface project made progress, though: Trump Soho, the condo-hotel where a construction worker fell to his death in January, topped off, making it the tallest building in the neighborhood.

Post Date: 1/1/2009

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