LeFrak: Fed unsympathetic to building owners

Richard LeFrak, chairman and CEO of the LeFrak Organization, appeared on CNBC’s “Squawk Box” yesterday to discuss why he is not building any new commercial buildings in New York, New Jersey, or Los Angeles, where he already owns land, for at least one to two more years. “Demand for commercial space has dried up so severely even though there is an abundance of developable land across the country,” LeFrak said. He added that as long as the job rate continues to plunge and the retail sector continues to drag, there will be no need for new office buildings or shopping centers. And while the Federal Reserve is eager to help out struggling residential homeowners with underwater mortgages and lagging loan payments, LeFrak said there is not as much sympathy for building owners. “Since owners of commercial buildings are investors who should have known what they were doing, the Fed is much less politically sympathetic towards them,” he said. However, even with the assistance of Term Asset-Backed Securities Loan Facility, or TALF, LeFrak stressed that in the end, it’s all about jobs. “If the job market starts to improve, the commercial real estate sector will also experience an uptick,” he said.