Real estate market slow to recover: developers

By Yaffi Spodek | October 08, 2010 09:00AM

From left: Henry Justin and Miki Naftali

The real estate industry is still suffering but there are
opportunities in niche areas, as the overall market starts to recover,
a number of developers said at a panel discussion Wednesday night at
the Young Jewish Professionals Real Estate Network event held at the
Chelsea Pearl.

Henry Justin, CEO of HJ Development, said that while prices are starting to stabilize, it is still not an ideal time for developers and would-be homebuyers.

“It would be disingenuous to say that now is a good time to be in the market,” Justin, developer of 211 East 51st Street, told The Real Deal after the event. He emphasized that people need to resist the temptation to quickly enter into deals. “I’ve seen a lot of good people get hurt,” he said.

In addition to Justin, the panel featured Miki Naftali, CEO of Elad Properties; David Blumenfeld, vice president of Blumenfeld Development Group; and Neil Rubler, CEO of real estate development firm Vantage Properties. It was moderated by Ivan Kaufman, CEO of real estate investment trust Arbor Realty Trust.

Rubler said that although rents were down, he did observe a “pick-up” over the summer, a sign of stabilization in the market. “There are opportunities out there, but they may be different than some of us thought,” he said, adding that he was “seeing reasonable strength” in the investment market.

Naftali, developer of The Plaza hotel and condo, expressed a cautious outlook.

“We are starting to see a recovery [in the New York market], not necessarily in price, but we are seeing many more transactions,” he said during the panel.

But at the same time, the numbers of opportunities that are available now pale in comparison to those of the late 1980s and early 1990s.

“It’s very difficult to make money,” he said. “It’s not impossible, but it is much more challenging.”

The greatest opportunity, he said, is in the multi-family rental sector. Though construction financing is scarce, there is financing available for “everything that is income-producing,” he said.

Naftali said he attributes his own company’s success to focusing on markets outside the United States, such as in Montreal and Toronto in Canada, while waiting for the U.S. market to rebound.

But in New York City, Naftali has a Tribeca project underway at 250 West Street, a through block between Hubert and Washington streets, which is being designed by Francis Pisani. The residential conversion project will be complete “sometime in 2011,” Naftali said after the panel.

He provided scant details about the project, saying it’s still in its infancy.