Developer Kent Swig, investment sales broker Doug Harmon, architect David Helpern and other top real estate insiders gathered last night to discuss pivotal issues shaping the Manhattan skyline, including escalating land prices and sky-high building heights.
CapRate Events’ Brian Klebash led a free-form talk at the Brown University Club at 111 East 59th Street. All the panelists – Swig; Eastdil Secured’s Harmon; Josef Mittlemann, president of Empire Realty Group and former Silverstein Properties COO; Michelle Flagg of Chelsea Hotels; and Suzanne Sunshine of commercial brokerage S. Sunshine & Associates LLC – are Brown graduates.
Swig said the housing marketplace has been very underserved for decades. He stated that upzoning — with a requirement to build affordable housing — could help reduce the problem, but not solve the problem.
“We desperately need affordable housing,” Swig said.
One method for spurring housing citywide, Mittlemann said, is to use more tax incentives for providing affordable housing, in addition to the 80/20 rental program. Also, Silverstein’s Silver Towers and other projects have prominently offered incentives to lure renters and brokers.
Given the climbing prices and the strength of the market, landlord incentives have not been as common recently.
As for the string of increasingly tall skyscrapers, Helpern said he sees the 1,379-foot-tall 432 Park project as an example of an “abuse” of height limits, The building stands in contrast to the 1,004-foot-tall One57, which he said is a better use of the height and more architecturally interesting. Helpern said he expects a change in scale to occur in the coming years.
But Harmon denied speculation that the New York City real estate market is in a bubble. “I think New York City is in a stronger position [than other cities] because banks are more disciplined and there is a lot more equity in deals,” Harmon said.
Harmon did say that land costs have risen a “staggering” 75 percent in the past year.
“$3,000 per square foot is the new $2,000 per square foot,” Harmon said. “Or, is it $4,000 per square foot is the new $3,000 per square foot? I never took a business class at Brown. All liberal arts.”