Panel: NYC Remains a Magnet for Investors

NEW YORK CITY-The greatest thing about the New York commercial real estate scene, Michael Shvo told his audience at the inaugural Cityscape USA conference, is that “it shows the strength of the market. People need to be here.”

Shvo, president of the residential marketing firm that bears his name, was one of a trio of panelists discussing the city’s real estate for an audience that included international attendees along with those from outside the New York region. Notwithstanding the nationwide economic downturn that has reduced deal velocity locally, panelist Lois Weiss said, “We continue to go strong here. There is still a sense that New York is a good investment.”

Titled “Exploring the Epicentre–New York, New York: Future Vision,” the late-afternoon panel session Tuesday at the Jacob K. Javits Convention Center here portrayed a market that has stood up to the challenges even if it hasn’t been completely impervious to them. Weiss, real estate columnist for the New York Post, noted that in the office sector, landlord concessions are up, but not by much, while vacancy remains tight. Downtown retail spaces that once went for $75 per sf now command $400, she noted, especially as foreign retailers come in. Meanwhile, the hotel sector remains strong: Weiss said the only reports she’s heard of softening in hotels is that rooms are not oversold as heavily as before.

Dan Biederman, who co-founded the Grand Central Partnership, 34th Street Partnership and Bryant Park Corp., offered panelists one reason for Manhattan’s allure: public-private partnerships in the form of business improvement districts that have cleaned up neighborhoods. In the early 1980s, Biederman said, Bryant Park was largely deserted except for drug dealers; today, after $20 million in capital improvements paid for mostly by the private sector, it’s a magnet for tourists, area residents and a lunchtime crowd of nearby office workers.

“It’s basically the ‘every little thing’ concept,” Biederman said of the Bryant Park BID’s efforts, which include making sure litter is picked up and graffiti gets removed. “We pay attention to every little thing that could be better in our district. All the BIDs do.”

Shvo chimed in that this attention to detail helped boost the marketability of a condominium project known as Bryant Park Tower. Although Bryant Park Tower is actually located a block south of the park, at 39th Street and Avenue of the Americas, the park’s allure helped the project command prices 32% to 38% higher than at competing properties.

On the subject of prices, Shvo noted that as real estate prices go up in emerging markets, New York City remains a bargain in the eyes of foreign buyers—whether they’re acquiring apartments or entire buildings. He said the city’s cost of living comes in at number 22 worldwide, well behind living expenses in Moscow, London or Dubai. And while the value of land alone in Manhattan has appreciated from the $24 paid by the Dutch in 1624 to more than $200 billion today, “it’s still fairly cheap” by comparison to other world capitals.