Even as the commercial real estate industry faces one of its worst years in recent times, industry executives are hopeful that the Obama administration’s stimulus efforts could improve the situation later in the year by putting the economy on the path of recovery, according to a January 2009 survey of industry sentiment.
In a hint of what lies ahead for 2009, Fitch Ratings reports that the monies held in reserve to cover debt servicing on Stuyvesant Town/Peter Cooper Village, a massive New York multifamily property, have decreased to about $127 million from $400 million at the time the loan was securitized in 2006.
Conditions in the apartment sector continued to be less than favorable, according to the January survey of multifamily industry executives by the National Multi Housing Council (NMHC) based in Washington, D.C.
Although the current commercial real estate cycle has seen relative supply restraint compared with previous cycles, that won’t be enough to bail the industry out of a deep recession, which is causing demand to fall off more than expected.
This year is shaping up to be one of the most challenging years for the New York City office market in more than 20 years, according to Robert Alexander, CB Richard Ellis chairman for the New York Tri-State Region.
Not since 2001 has the New York office market been in such bad shape. Taking into account all categories of office space, just over 19 million sq. ft. was leased at the end of 2008, on par with the 18.9 million sq. ft. of space leased seven years ago.