From the October issue: If hindsight is 20/20, forecasting the future might be 20/200. Yes, there have been some right-on-target predictions in the last few years — among them, mathematician Nassim Nicholas Taleb’s warnings that a meltdown of the world’s financial systems was imminent in the mid-2000s. But nailing down with certainty what tomorrow’s economy may bring, experts say, is at best a crapshoot.

The difficulty of crystal-ball gazing was, in fact, the heart of Taleb’s 2007 book, “The Black Swan: The Impact of the Highly Improbable,” in which he says that knowing with certainty when the next big calamity will hit is as tough as finding an actual black swan.

However, Taleb goes on to say that one should try to prepare for life’s black-swan events — like Hurricane Katrina, say, or the Sept. 11 attacks — by having safeguards in place for a multitude of worst-case scenarios. [more]

Though the U.S. commercial real estate market is relatively strong despite an uneven economy, a mass of debt due to mature between now and 2015 gives reason for pause, according to a commercial real estate report issued today by Deloitte.

Activity has increased by just about every measure, according to the report, because of the abundance of distressed properties for sale, the growing availability of capital to finance stable assets and the growing share of funds placed in real estate investment trusts.

At the same time, it remains to be seen how commercial investors react to new government regulation, such as the Dodd-Frank Act and the Volker Rule. Moreover, refinancing is still risk because of the huge quantity of real estate loans scheduled to mature by 2015, largely held by banks already facing liquidity challenges. – Adam Fusfeld [more]

NBC Universal has signed a 10-year lease for 1.4 million square feet of space at Rockefeller Center in the wake of its acquisition by Comcast, according to the Post. The space, which NBC parent company General Electric bought for $440 million in 1996 after the Rockefeller Center bankruptcy bailout, consists of full-floor office condominiums in 30 Rockefeller Center (where the lease includes 75,602 square feet), the studio building at 49 West 49th Street (where NBC leased 475,110 square feet) and 1250 Sixth Avenue (where NBC leased 187,065 square feet). As part of the deal, brokered by Scott Panzer of Jones Lang LaSalle, NBC will have first dibs on the condos if GE ever decides to sell them. [more]

New York City doesn’t have enough big chunks of office space to go around for all of the major tenants who are looking. According to Crain’s, there are 24 tenants currently on the hunt for at least 250,000 square feet in New York City and only 29 available blocks that fit the bill. But Cushman & Wakefield data shows that only 12 of those spaces are in the coveted Midtown area, and brokers say the crunch is shifting the office leasing market in landlords’ favor. At 120 Park Avenue, Wells Fargo was recently bumped despite a letter of intent to lease 280,000 square feet because Bloomberg LP swooped in to snag that space — plus an additional 120,000 square feet. [more]

Accounting giant Deloitte has signed an 18-year lease for 12 floors with a total of around 430,000 square feet at 30 Rockefeller Center, according to the Observer. The deal — the largest of 2011 so far and only slightly smaller than the largest office lease of 2010 — brings a likely end to more than a year of intense speculation about the firm’s real estate search, which was headed by Cushman & Wakefield’s John Cefaly and Dale Schlather and included high-profile buildings like 11 Times Square, 4 World Trade Center and 4 World Financial Center. [more]

In addition to getting a request from Deloitte for a $20 million subsidy package today, the city’s Industrial Development Agency is slated to present a reworked subsidy package for Reuters, which was given up to $26 million in incentives from the Giuliani administration, the Observer reported. Reuters received the $26 million incentive package — intended to promote job growth — in 1998, but according to the city about $20 million remains unused. In 2008, Reuters merged with Thomson and now, with a larger workforce and more office buildings, Thomson Reuters wants to extend the subsidy to all its buildings, at least in part to help get a break on renovation costs, according to the Observer.

The city and Reuters reworked the proposed deal, with the city adding new restrictions tied to job growth to access some of the subsidy. The city also proposed to extend the length of the deal by another four years. Opponents, such as Public Advocate Bill de Blasio, criticized the city for an alleged lack of transparency and mistreatment of workers, and called for the Bloomberg administration to delay the approvals. Bill O’Meara, president of the Newspaper Guild of New York, also voiced opposition to the deal, saying that the city should not be giving taxpayers’ money to a foreign-owned company. Julie Wood, a spokesperson for the city’s Economic Development Corporation, countered their claims by highlighting the growth incentives in the reworked deal. [NYO]

[more]

John Cushman

The international law firm Milbank, Tweed, Hadley & McCloy headquartered at 1 Chase Manhattan Plaza in the Financial District [more]

John Cushman

The international law firm Milbank, Tweed, Hadley & McCloy headquartered at 1 Chase Manhattan Plaza in the Financial District [more]

From the May issue: Last month, one of the market’s most reliable indicators showed that Midtown landlords are still suffering — even as brokers claimed the period of steep rent declines in Manhattan was over. The effective rent — a closely guarded slice of data that measures how much office leases are worth when free rent and other landlord concessions are factored in — fell in the first three months of the year in Midtown’s Class A buildings, after rising over the fourth quarter of 2009.
Many brokers saw the decline in effective rents as the last gasp of the recession, but others said prices might fall for the foreseeable future. [more]

With declining commercial real estate values, 2010 may prove to be the ultimate year for distressed asset investment nationwide, according to a recent report from financial advisory firm Deloitte. The report, which makes predictions for the market for the next year and a half, says that hotel and multi-family residential markets may be among the first kinds of commercial real estate to bottom out and recover, particularly if employment figures begin to improve in 2010. New York, in particular, might see a quicker turnaround in the office market, according to the report, in part because of recent hiring upticks in the investment banking sector. TRD