As real estate loses some of its luster, many have lost their zeal for working in the industry, although for a good number who have left it is not by choice. In the last several months, an increasing number of firms and offices throughout the city have been shutting down as deals slow to a trickle.
For example, one of the two largest and most successful sales firms in the city, the Corcoran Group, announced late last month that it would close its Harlem office. Our feature story by Candace Taylor puts some of those closures in perspective and shines a light on what’s happening at powerhouse Corcoran, which could be in a challenging spot. That’s because Corcoran is owned by heavily leveraged NRT, a subsidiary of the Realogy Corporation, which was taken private last year by Apollo Management in an $8.8 billion leveraged buyout and has serious exposure to the national housing crisis. While things are going to be tough for its parent company, I don’t doubt that the firm and its nimble CEO, Pam Liebman, will land on its feet, as you’ll learn from Parent trap trips Corcoran.
When it comes to residential units, the expected dynamic between sales and rentals has been turned on its head in this recession. More New Yorkers are turning to rentals — perhaps the one bright spot in the market. Sales agents who never would have touched rentals before are embracing them, encouraged by landlords who are picking up commissions and offering months of free rent and other incentives. But there’s a painful flip side: Despite this burst of rental activity, rents and commissions are falling, making it hard for brokers to make a living. For all of the details, check out our rental report.
In each issue for the past year, we’ve brought you stories profiling the
giants of our industry who are facing immense challenges, such as our features on Kent Swig and Harry Macklowe. Similarly, this month we take a close look at Lev Leviev, Israel’s richest man. After investing billions of dollars in New York real estate at the top of the market, Leviev is now in a race to cash out before his lenders catch up to him. Our story looks at what’s ahead for Leviev and whether his bets will pay off.
We also take a look at another group of investors who are finding themselves in trouble. Just like investors in condo conversions and development sites, those who bought large, mostly rent-regulated multi-family buildings at the height of the market are threatened with foreclosures and bankruptcies. A wave of multi-family portfolios is likely to hit the market at a discount soon, since many of their owners are not cash-rich enough to sustain these properties. Check out Adam Pincus’ story.
Finally, every year our editors gather the best data available on New York City commercial and residential real estate for our annual Data Book. The book’s most popular feature, which maps out condo development throughout the city, can tell you what’s available, where there will be a glut and where there are few projects in the works. If you are a subscriber, you received the Data Book with this issue. If you didn’t, that means you should become a subscriber. In the meantime, you can buy the Data Book 2009 on our Web site.
Enjoy the issue,
Amir Korangy