From the September issue: In the last few weeks, as many of the city’s big banks have been besieged by bad news, and the stock market has seesawed sharply in a short span of time, the question on many analysts’ minds is: Could a new round of pain on Wall Street trickle down to New York’s already vulnerable commercial and residential real estate markets?
Indeed, the thinking goes, the financial services industry and its numerous offices keep commercial occupancy rates high in Manhattan, while its well-paid executives buoy the high-end residential market. Meanwhile, its lower-rung workers drive demand for rental units, sources say.
Wall Street has served as an economic engine of the city for decades, ever since major manufacturing and energy companies — like Mobil, Exxon and chemical company Union Carbide — abandoned their New York corporate headquarters in the 1970s and 1980s for other (cheaper) addresses.
However, political fights over debt limits in Washington, along with weak consumer confidence and the sovereign debt crises abroad, have recently spooked investors, leading to reduced profits across the board at the big investment banks. Bank of America, run by Brian Moynihan, is facing the most severe problems, but other stalwarts of the Street — like Citigroup, headed by Vikram Pandit; Goldman Sachs, led by Lloyd Blankfein; and Morgan Stanley, headed by James Gorman — are also hurting, to name a few. [more]
