Optimism led to Manhattan commercial bust, Real Capital Analytics head says

As the economy braces for what could be an increase in commercial property foreclosures, Robert White of Real Capital Analytics led PBS “NewsHour’s” Paul Solman on a tour of some of Manhattan’s at-risk commercial properties. White said that over-exuberance and optimism led to overpriced commercial towers with little equity. Developer Harry Macklowe’s Worldwide Plaza, for example, which was priced at $1.7 billion, was traded a month ago at a little under $600 million, in part because the building was around 50 percent vacant when it was sold — something few anticipated. “The market was full of such optimism that rents would keep increasing and the buildings would stay fully leased,” White said. “The economy was still growing, banks had a lot of money to lend and there were many investors who also wanted to be in commercial real estate.”