New York real Estate
New York defiant as boomtime melts awayBy Christopher Grimes in New York FT.com
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If there is a building that symbolises the recent boom years in New York, it is very likely 15 Central Park West, a limestone apartment building designed by Robert A.M. Stern.
It has been labelled the most successful residential building in New York's history, with good reason: even before construction was completed, all of its flats were sold, raking in nearly $2bn (€1.4bn, £957m) for the Zeckendorf family, whose development company built it.
Many of the buyers in 15 CPW have been enjoying boom times on Wall Street recently, including Lloyd Blankfein, the chief executive of Goldman Sachs, and Daniel Loeb, the hedge fund manager who paid $45m for a penthouse there.
But there are signs that the latest boom in New York - evidenced by a proliferation of high-end restaurants, upmarket boutiques sprouting in once gritty areas and a frenzy of construction - is grinding to a halt.
The city's property market, which has remained ebullient even as housing prices in many other US cities have declined, is coolling.
Wall Street banks are beginning to shed jobs as the effects of the credit squeeze take hold, with Bear Stearns, Morgan Stanley and Merrill Lynch among the firms announcing plans to cut headcount.
Michael Bloomberg, the city's mayor, told city agencies this week to begin cutting their budgets and to impose hiring freezes in an attempt to head off the effects of an expected drop in tax revenues.
Though Mr Bloomberg's administration has sought to diversify New York's economy - it has worked to attract more film and television business, as well as new industries such as biotech - the city's fortunes are still tied to Wall Street.
The financial services sector created 41 per cent of the jobs in New York City since 2003 and 52 per cent of the income gains, according to a cautious report issued this week by Thomas DiNapoli, the New York state comptroller. Job losses, he warned, could accelerate next year.
Mr Bloomberg struck an optimistic tone on Thursday when he addressed the Manhattan Institute, a conservative think-tank.
"We may be headed for a national economic slowdown but New York City has never been better prepared to New York city weather one than we are right now," he said.
At the lower end of the residential market, there are some troubling signs: the number of home foreclosure filings are rising in working-class areas of the Bronx, Queens and Brooklyn.
But Jonathan Miller, director of research at property firm Radar Logic, says that although Wall Street bonuses, which have helped keep the luxury property market alive while housing prices have slumped elsewhere in the US, are expected to be smaller this year than the record-breaking level set in 2006, "we're at a record pace, so we're in a better position" to handle a slowdown. As long as the US dollar remains weak, he expects, foreign buyers will continue to buy property in New York.
The city's streets - and its museums and restaurants - still appear to be bustling. NYC & Co, the city's tourism arm, is projecting as many as 8m international tourists to New York this year, up from 7.2m last year and 4.8m in 2003.
"Wall Street's decline has not really affected consumer spending," says Mitchell Moss, a professor of urban policy and planning at New York University. "There's been this great influx of people from abroad, and this helps the hotels and it fills the retail stores. And [investors from abroad] are our safety net on housing."Additional reporting by Michael Mackenzie
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