Crystal ball warns of brutal year

By Melissa Dehncke-McGill | January 19, 2009 05:22PM

From the January issue:
If there is one glaring conclusion from 2008 that everyone can agree on, it’s that making predictions about New York City real estate is often an exercise in futility. But with key facts at hand about construction financing, condo sales and office vacancies, everyone in the city’s real estate community is preparing for a brutal 2009. In this month’s Q & A, some of the biggest residential and commercial players tell The Real Deal what they fear and anticipate in the New Year. On the residential side, brokers say that developers who are 40 percent sold or less could have serious problems; that renovation and retrofitting will take on new significance as ground-up construction wanes; and that emerging areas like Bushwick will get hammered. On the commercial side, the consensus is that the already elevated vacancy rate will increase even more as planned financial industry consolidations take effect and office space is dumped. In addition, the distressed assets funds that spent the latter part of 2008 raising money will probably get their day in the sun in mid-2009, when prices start seeing even more significant drops. For more, we turn to our panel of experts.