In these difficult economic times, New York developers are
facing a dilemma. While apartments are sitting on the market in Williamsburg and other emerging neighborhoods, many developers don’t have the option of lowering prices to unload these units. And if they can lower prices, often they are required by their lenders to put more
equity into projects or take out additional loans. Either way you look at it, developers are in a bind.
This month, our spread on residential development delves into these and other new issues confronting developers, like when condo-to-rental conversions make sense. We also look at how, in a slower market, resale units in new construction buildings are competing with original
sponsor units.
When The Real Deal first came on the scene, we were able to shine a spotlight on important industry figures who typically went unnoticed by most of the press. Among those we highlighted was Sam Chang, chairman of McSam Hotel Group. Our cover profile of Chang several years ago introduced him to readers as the man with the most hotels in the city. Today, Chang is widely discussed in blogs, newspapers and, of course, in our own pages. For this month’s issue, we were pleased to catch up with him again, this time for the Closing. Our interview finds he’s still a remarkably driven man, willing to put his personal life on hold while he pursues his goals. He says he’ll slow down when he retires at age 50, a milestone only two years away.
Speaking of goals, we would like to propose one for our industry. While rents have remained relatively flat in recent months, it’s still the case that for most New Yorkers, who earn $60,000 a year or less, rents are too far out of reach. A simple solution? City-subsidized land for a developer like Related, Vornado, Silverstein or Durst to build affordable housing for young professionals. Because without affordable housing for our workforce, the best and the brightest may be forced to consider relocating to cheaper cities — and that’s the last thing we want for New York City.
No summer is complete without a trip to the Hamptons. We round out this issue with a look at spec home development in the South Fork and the impact that turnover among Hamptons restaurants is having on retail real estate. Be sure to check out this month’s special Hamptons edition of By the Numbers for some pretty impressive statistics at the high end of the residential market.
For a long time, our podcast has been on hiatus while we focused on producing video Webcasts. We decided that video doesn’t have to kill the audio star — at least, not on TheRealDeal.com. So the podcasts are back, and our first guest is Bob Knakal, chairman and founding partner of Massey Knakal Realty Services. Bob recalls the downturns of the late ’80s and early ’90s and points out that the current situation is actually better because there’s a lot more equity available for investing. It’s a great interview; I recommend you go to our Web site to check it out. We promise there are no questions about his much-discussed hair.
Read on,
Amir Korangy