The Real Deal New York

Going to press, as Sandy raged

The recovery from the hurricane will involve real estate at every turn

November 01, 2012
By Stuart Elliott

I was going to write this month’s editor’s note about two forces — technology companies and international buyers — that brokers are counting on to save the New York City real estate market and which we cover in depth in this issue.

But after all our stories were wrapped up and we prepared to go to press, it wasn’t the city’s real estate market that needed saving, it was the city itself.

The impact of Hurricane Sandy will be long-lasting and will involve real estate at every turn, from rebuilding ravaged areas like Hoboken, Fire Island and Breezy Point, to fixing Manhattan, to the broader question of how New York City’s entire infrastructure should be rethought and revamped.

Beyond the damage, we’ll never look at the divide between Lower Manhattan and the rest of the island the same way again.

I live in the West Village near 14th Street and, for me, The Real Deal’s office on West 29th Street became one of the first outposts of civilization, with the electricity, Internet and cell service that were nonexistent farther south. (Eventually, I decamped to the Upper East Side, where I introduced my family as refugees from the south while trick-or-treating on Halloween.)

We’ve been covering the storm extensively online since the news first broke that it was charting a path for New York. As we move forward, The Real Deal will be there every step of the way to look at how the real estate industry — from developers and investors to brokers to everyone else — will mobilize alongside the public dollars and government efforts in the rebuilding process. That’s, of course, after the level of damage is fully assessed, which itself will take some time.

Back inside this issue, we examine those two drivers of the current real estate market that might actually take on more importance post-Sandy.

Commercial real estate brokers are counting on technology firms — from Google, Amazon and LinkedIn on down — to be one of the prime engines of growth in the city’s vast office market. But is the talked-about boom in tech leasing really happening? We take a comprehensive look at deals from the last two years to answer that question, as well as survey the brokers doing the most tech deals and the companies on the hunt for the biggest blocks of space. See reporter Adam Pincus’s story Is the tech boom being overblown?

On the residential front, brokers have been relying on international buyers, particularly Russians, to sustain home-buying in Manhattan at the very high end. We take a look at these überwealthy and übersecretive Russian buyers in a feature story by Adam Piore: Anything but roulette, examining where their money comes from and how they go about their real estate deals here. (They don’t drink vodka and usually have bodyguards in tow.)

There is likely more big money to come from Russia; the number of Russian billionaires has gone from zero in 2000 to 96 this year, according to one tally. And the ever-increasing presence of condominiums in Manhattan will also help, since they require considerably less financial disclosure than do co-ops — an important consideration for many Russian buyers.

It’s interesting that 30 years ago, these groups — tech firms and Russians that are now helping to boost the Manhattan market — had little clout or money. Indeed, they would have been classified as nerds and commies in 1980s parlance. Things have certainly changed.

Meanwhile, other real estate players have been on top for decades. In Stakes go up for billionaires, we examine New York City real estate moguls that made the latest Forbes list of richest Americans and how their net worth has changed during the downturn. While there has been significant movement, it’s impressive how stalwarts like Jerry Speyer, Richard LeFrak and a handful of others have mostly stayed on top, their prime property reliably printing money year after year.

Finally, we take a look at the most powerful NIMBY (Not in My Backyard) groups that regularly battle developers over their plans. If there is a contingent that typically wants things to stay the same, for better or worse, it’s probably this one.

Enjoy the issue, and have a safe month post-Sandy.

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