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I warned of this back in October of '07, when it actually started manifesting itself in a fashion that was undeniable (although everyone in the media and real estate brokerage was denying it).


Excerpts taken from The Real Deal commercial newsletter mailings.


2007 record year for new developments

Signs of a bubble top... 

According to a year-end report released by the Corcoran Group, 2007 was a record year for new condos in Manhattan. The volume of new development sales increased 42 percent compared to the previous year and accounted for about 30 percent of total sales. The median price of a new condo increased 30 percent to $1.205 million. New condos saw a 10 percent increase in price per square foot compared to the prior year, increasing to $1,323 per square foot. Big-name properties like the Plaza, 40 Mercer and 40 Bond drove sales prices to a peak in the third quarter, the report said. TRD

Manhattan rents drop

Average rents fell this month for Manhattan apartments, according to The Real Estate Group's monthly market report, defying the traditional seasonal trend of a January rebound after a slow December. The downfall was widespread, encompassing all unit sizes in both doorman and non-doorman buildings. Doorman studio rents were hit hardest, with a 5.4 percent decline from December to $2,608. The next largest drops were in non-doorman one-bedroom rentals, which fell 4.3 percent to $2,807 in the same period, and doorman one-bedrooms, which fell 4 percent to $3,634. more By James Kelly

New permits drop 23 percent

 The number of new building permits issued by the city's Department of Buildings dropped by 22.8 percent in the first half of fiscal year 2008, from July to December 2007, according to a department report released earlier this week. The number of violations issued by the Department of Buildings increased 2.9 percent from 11,979 to 12,332 over the same period. Meanwhile, the number of permits issued for alterations increased by 4.5 percent. TRD

New York falls in Case-Shiller Index

 Average home prices in metro New York dropped .81 percent from October to November, according to the S&P/Case-Shiller Index, which excludes condos. The index also indicated a drop for New York of 4.8 percent from the year before to 203.88 in November 2007. This dive was less steep than that of the report's 10-city index, which fell 8.4 percent from November 2006 to November 2007, the index's largest year-over-year decline ever. The 20-city index fell 7.7 percent over the same period, also a record. TRD

15 CPW studio sells for just $690,000

 More than just the design of 15 Central Park West makes it a throwback -- the limestone tower has small staff apartments on separate floors, meaning the price range for units swings from under $1 million to $20 million and beyond. The buyer of unit S702 paid just $690,000. Also Tuesday, the same buyer -- listed on the deed only as Southfork Holdings -- purchased a condo there for $10.5 million. According to, the cheapest unit at 15 CPW had been $710,000 for a studio. On floors six through eight, 21 studios and three one-bedroom units range from about 350 to 500 square feet, Bloomberg reported. TRD

Brooklyn ZIP has highest subprime foreclosure rate

 The Brooklyn ZIP code 11233, which includes parts of Bedford-Stuyvesant and Crown Heights, had New York State's highest rate of subprime foreclosures in October, according to a Federal Reserve Bank of New York report. The area had 194 subprime foreclosures out of 770 subprime borrowers, a rate four times the national figure of 6.89 percent. [Bloomberg]

Macklowe reaches deal over debt

Struggling real estate baron Harry Macklowe has reportedly reached a deal with Deutsche Bank to hand over control of seven Manhattan office buildings he acquired less than a year ago for $7 billion. Macklowe would still retain his title and Macklowe Properties would still manage the buildings. His $5.8 billion debt was due on Feb. 9; now it has been extended while the buildings could be marketed for sale. Many observers say that Macklowe overpaid when he spent $7 billion on the buildings, and say their value has dropped since he bought them at the height of the city's real estate boom. [WSJ]

Macklowe could sell GM Building this month

Developer Harry Macklowe could reportedly sell the General Motors Building this month to pay off debts with Deutsche Bank. Bids for the 50-story building are due Feb. 15. Macklowe made his stake in the building collateral for a $1.2 billion bridge loan by Fortress Investment Group, which financed the $7 billion acquisition of seven Manhattan office buildings last year. The cost of borrowing has shot up by one-third since Macklowe bought the buildings, said Scott Singer, executive vice president of New York-based Singer & Bassuk Organization. While some say Macklowe paid too much for them, Howard Michaels, chairman of New York-based Carlton Advisory Services Inc., said Macklowe "paid an appropriate price at the time he bought the properties. It was a major score for him. And it was unforeseeable by him or anybody else that the market would change so drastically." [Bloomberg]

Spitzer: State “struggling” with runaway building costs
Gov. Eliot Spitzer, in a somber address Thursday to New York City's developers, said runaway costs and delays for big public projects threaten the city's standing as a world capital. Spitzer's speech to the New York Building Congress centered on how costs threatened to slow a range of projects, from rebuilding the Tappan Zee Bridge to reinventing Governors Island. He called the growth in construction spending, driven by skyrocketing commodity costs, the state's “biggest problem.” Spitzer said he had urged commissioners at the Metropolitan Transportation Authority and elsewhere to get serious about controlling expenses on major projects. more By Alec Appelbaum

Hotel boom spurs fears of over-supply

A boom in hotels has been encouraged by the record high occupancy rate recorded last year. But some question whether too many hotels are being built and wonder if the amount of tourists taking advantage of the weak American dollar could decrease if the global economy weakens. The amount of visitors to New York City in 2007 was up 5 percent from the 2006 record of 43.8 million. To meet the demand, hotel inventory is increasing by 20 to 25 percent. [Sun]