PHOTOS: Inside Madison Realty Capital’s holiday bash

“Everyone has an obligation to be optimistic, because that’s the business that we’re in.”

Madison Realty Capital’s annual party tends to kick off the real estate holiday circus with a bang, and Thursday night’s affair was as raucous as ever. The Top of the Standard and the Boom Boom Room were so rammed with suited dealmakers with bad haircuts that you almost had to start worrying about fire safety. There was talk over cigars and hookah of recapitalizations, redevelopments and bold plans were made for the year ahead.

But some party veterans noticed a slight melancholy. “The mood is a little more subdued this year,” said Joseph Orefice, who heads Investors Bank’s commercial real estate division.

Investment sales activity is down, the retail market is in a funk, and geopolitical turmoil, federal tax reform plans and the specter of rising interest rates create plenty of uncertainty.

“There are a lot of things that are up in the air,” said David Ash of Prince Realty Advisors, which just brokered a $72 million sale of the Smyth hotel to Korman Communities. “Everyone has an obligation to be optimistic, because that’s the business that we’re in.” The Kaufman Organization’s Michael Kazmierski said he predicts “anemic growth in the near term.”

Others were more bullish. “From here there is only one way to go: up,” said JDS Development’s Michael Stern, who was seen chatting with TerraCRG’s Ofer Cohen and Town Residential’s Andrew Heiberger.

Town decided not to throw its big annual holiday bash this year, although Heiberger said the firm is hosting several smaller events instead.

“I don’t think it’s a good business message when so many business sectors are suffering to throw a big gala,” he said.

See more highlights from the 2017 holiday parties

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Nest Seekers International’s Ryan Serhant said big payouts in the tech and finance industries is trickling down into the luxury real estate market.

“A lot of people made a lot of money this year,” he said, referring to executives in finance and tech that were making splashy purchases.

Okada & Co.’s Christopher Okada, who regularly represents retail tenants, saw the silver lining in a weak retail market. “Now it’s a tenant’s market,” he said, adding that he has seen healthy leasing volume.

Hornig Capital Partners’ Daren Hornig talked about his Schlitz Brewery conversion in Brooklyn, where the developers had plans to build creative office space, but instead leased in entirety to the city. “It was too much money not to do the deal,” he said.

Andrew Dansker, a mortgage broker at Marcus & Millichap, said he was surprised by how cheap debt was in 2017. “I’m surprised to see loan spreads tightening. Banks are responding to the lower deal volume,” he said. “Spreads on a historic basis were pretty tight already.”

Also spotted: Toll Brothers City Living’s David Von Spreckelsen, Douglas Elliman’s Tamir Shemesh, Jared Epstein of Aurora Capital, Ackman-Ziff’s Simon Ziff, Eastern Consolidated’s Adelaide Polsinelli, Zar Property’s David Zar, Delshah Capital’s Michael Shah, Magnum Real Estate’s Ben Shaoul, DH Property’s Dov Hertz, HPNY’s Ivan Hakimian, Westwood Realty Associates’ Steven Vegh, Bluestone Group’s Eli Tabak and Newmark Knight Frank’s Dustin Stolly.

Mark Maurer and Hiten Samtani contributed reporting.

Photos by Jhila Farzaneh for The Real Deal.