There are always silver linings.
Tariffs may be wreaking havoc in the stock market, sending it plunging one day and rebounding the next.
But in real estate, certain sectors stand to benefit from all the uncertainty.
The rental market, the industrial sector and co-working, to pick a few areas, could see a surge.
In our ranking of the most active developers in this issue, reporter Elizabeth Cryan notes that the vacancy rate for New York City rentals stands at 1.4 percent, the lowest in 56 years. Buyers shy away from purchasing homes in times of uncertainty, but they still need a place to live.
“The rental side is very, very strong,” said David Bistricer of Clipper Equity, which ranked fourth (see the story to see who finished at the top of the list, and check out our ranking of top architects and general contractors). “Rents are high, there’s less availability in the marketplace, there’s less new product coming online, so therefore the city is fully occupied.”
Meanwhile, Andrew Chung’s Innovo Property Group made the list thanks to massive industrial projects underway in Long Island City. As Cryan notes, the industrial sector may be a trade-war winner if more companies need manufacturing space or start stockpiling supplies.
In our Closing interview this month, WeWork CEO John Santora said the co-working company, building back up following its bankruptcy, stands to benefit from individuals and companies that are avoiding long-term leases amid the tariff turmoil.
The rental market, the industrial sector and co-working space could all see a boost amid the tariff turmoil.
“There is this…upside where people begin to realize that you need that flexibility,” he said.
(Santora is in many ways the anti-Adam Neumann, hailing from Staten Island with a bushy mustache and proper work attire, where his predecessor, the kibbutznik Neumann, would walk around the city barefoot.)
Of course, it could just be that the effects of tariffs haven’t hit yet. As we note, “Unlike Wall Street and a handful of REITs, the industry views threats as weeks or months down the line.”
Still, while JP Morgan pegs the chance of a recession at 60 percent, it doesn’t feel like that yet from what I’m seeing, and what you’ll read in this issue across several stories.
And if you are part of the Trump administration, things might not seem dark at all. You are trying to remake the world at the fastest clip since Franklin Roosevelt nearly a century ago in your first 100 days.
Our cover profile on HUD Secretary Scott Turner gets at the scope of the changes, and how they could dramatically alter real estate. And in the story, “Holy HUD!” decisions get made through the prism of religion.
“HUD is the vehicle,” Turner said in December. “But the kingdom is the mission. HUD is the vehicle to be a blessing to the communities of America by way of housing, by way of revitalization.”
What does that actually mean on the ground? Turner wants to increase affordable housing while slashing funding. Is it just wishful thinking that he can do one without the other? Check out the story by senior reporter Kathryn Brenzel.
Elsewhere in the issue, we map the Republican players (and their real estate) in Trump’s orbit in Palm Beach.
As reporter Kate Hinsche writes of the Weekend White House at Mar-a-Lago, “Palm Beach is 998 miles from Washington, D.C., but the island exerts unprecedented influence on the goings-on in the nation’s capital. Where politicos, CEOs and donors stay in relation to the club clarifies who circles in Trump’s orbit — and how closely.”
Finally, join The Real Deal on May 7 in Chelsea for our big New York City Forum (see therealdeal.com/events). Developer and Special Envoy to the Middle East Steve Witkoff, New York City Mayor Eric Adams, investor (and former boxer) Floyd Mayweather Jr., superbroker Ryan Serhant and WeWork’s Santora (wearing shoes) will all take the stage.
Enjoy the issue!