Will Donald Trump push down a soft condo market?
REBNY panelists weigh in on presidency's potential impact on city
At a Real Estate Board of New York event on Thursday, the conversation inevitably turned to, as RXR Realty’s Seth Pinsky called it, “the elephant in the room.”
Pinsky asked a panel what they thought a Trump presidency might mean for New York City.
“I’m concerned about capital flows. What will happen — will foreign investors continue to invest in New York City? In the United States?” Charles Bendit, co-CEO of Taconic Investment Partners [TRDataCustom], said during the panel. “I think in the next several months, until people start to get somewhat comfortable, I’m concerned that condo sales might come to a screeching halt, at least as it relates to foreign investors coming in and buying.”
The luxury condo market has been showing signs of slowing down for the past year, with domestic banks shying away from projects. Foreign buyers from China, Russia and Arab nations are considered major drivers in demand for such projects, the real estate billed as a safe place to park their cash.
The panelists’ sentiments were a bit more cautious than the positive sentiments expressed by other real estate professionals who spoke to The Real Deal on Wednesday. Himmel + Meringoff’s Leslie Himmel agreed that there’s some uncertainty when it comes to foreign investment. She said, however, that the financial and other industries might stand to benefit.
“At the micro level, you start reading his tax plan and the repeal of Dodd Frank, that all might be very good for New York. We’ll see who he puts in the cabinet who he listens to,” she said.
Kevin Hoo, of Cove Property, said he felt New York City is, for the most part, insulated and that any impact from federal action would be fairly muted.
Thursday’s panel also touched on other uncertainties, such as the persistent lack of 421a and the future of co-working in the city. Himmel cited how her company was an “early believer” in WeWork, which signed a 180,000-square-foot lease at 1460 Broadway, owned by the Swig Company and Himmel + Merringoff. Himmel mentioned that even her daughter subleases space from WeWork at the building for her new company.
Hoo expressed concerns that co-working spaces in places like Gowanus might be short-lived if sky-high rents in Midtown South begin to fall. Bendit said he wasn’t sure if co-working space was just a fad among Millennials who crave a collegiate atmosphere reminiscent of their dorms.
“What happens when people grow up?” he asked. “I wonder what type of longevity it has as people get older.”