Dubai Uh Oh

Walking through Dubai International airport last summer on, I passed an enormous aerial photograph of what claimed to be the Dubai skyline. But it looked nothing at all like the city I just flew over. I looked closer, and saw that many of the buildings were not photographs, but computer renderings, and they were accompanied by an asterisk, indicating that they were "slated for completion 2010-2012." These imaginary buildings took up 0ver 75% of the skyline.

In addition to being a complete sht hole, the city is also a sham. It doesn't exist in the form that it's presented to the world. And now it looks like many of those buildings won't be built for a long, long time, if at all. (I wonder how many of them will get Hearsted?) From today's Journal:

"Emaar [one of the city’s biggest developers]'s stock has fallen 62% since the beginning of the year, that’s more than the 48% fall in the Dubai Financial Market’s main index over the same period, according to Zawya.com data. Earlier this month, Colliers International said the growth of property prices in Dubai slowed to 16% in the second quarter of 2008 from 42% in the first quarter. Morgan Stanley warned in August that property hotspot Dubai could see a 10% fall in prices by 2010."

Crash...Real Estate...California...Blah Blah Blah...

Blah blah blah...California real estate market crashing....blah blah blah...but what about New York? More specifically, what about 2 bedroom walk ups, on Charles, W 10th, W 12th, Perry, or Horatio?


...also...

US Ain't the Uggliest?

Huh?! Here's more info that suggests we're not as effed up as the rest of the world. Who knew?

Schnabel's Mark Downs and Super Sales

Here's a phrase that's new for Manhattan real estate agents, "Price reduced $2,995,000 about 20 hours ago."

Vacancies on the Rise in Manhattan

Busy here, so I'm straight ripping off the Observer:

"The 16,000 jobs that Manhattan employers are expected to shed this year will help by the end of 2008 drive the borough's apartment vacancy rate up to 2.8 percent for larger buildings, according to a report from Marcus & Millichap.

The rate could rise even further in 2009 ("further" being a relative term in Manhattan, which traditionally has the nation's lowest apartment vacancy rate). The City Comptroller's office last week predicted New York would lose over 165,000 private-sector jobs in the next 24 months. Higher unemployment usually means less demand for apartments. Less demand generally means lower rents--over time. So far, despite several consecutive quarters of iffy economic news, Manhattan apartment rents have stayed generally steady.

The Marcus & Millichap report also concluded that apartment development will produce nearly 1,500 new units in Manhattan this year."

Link here.

Sign of the Times

The uber hip (but also ugly and tacky ... apologies Ian, you rock, it's just Julian who effed this one up) Gramercy Park Hotel is advertising discounted rooms on its homepage. Several months ago, this would have been unimaginable. Whoa.

If I were in Manhattan retail, I would start freaking out right now. This can only mean that the Europeans are no longer flooding JFK/EWR.

Real Estate Porn to End All Real Estate Porns

This is the kind of stuff that makes you thrill inside when the DOW drops and the president of the United States starts saying shit like, "this sucker is gonna go down." You imagine (fantasize) what it would be like if the market tanked so far down that you take over this building in some kind of Blade Runneresque orgy with all of your arty friends, building impromptu fireplaces on the protruding balconies, and climbing the stairs 'cause there isn't enough money to fix the elevators. I mean, who the eff are the people who get to live in this awesomeness? If it's some Saudi with 6 hijabed wives, 24 kids, and a dozen Phillipina maids, I am SO gonna go United 93 on this crap!

Joel Kotkin on NYC Real Estate

The Observer sits down with Joel Kotkin, the author of The City: A Global History and an authority on urban social trends. The 55-year-old took some time on a recent visit from L.A. to talk about what’s to become of his native New York in a post-boom universe.

"You know, I was walking around the corner [in the Flatiron district], the two-bedroom apartments were still $3,000, $4,000 [monthly]. I mean, who’s got that kind of money?

So, if the prices were allowed to drop, what would happen? More of the young people who are now leaving New York in their 30s might stay; the immigrants who are now leaving New York once they get their feet on the ground, they might stay. You could see a similar scenario as to what happened in L.A. in the ’90s and Houston in the ’80s—which is, the drop in property prices allowed people an opportunity to get into a market that became very affordable. … In L.A. after the ’90s, after the riots and earthquakes and everything, what happened? The middle-class people were finally able to afford nice houses that they could never afford before; and immigrants went and bought everything that wasn’t nailed down."

Remember Hearst

In 1929, the plans for the Hearst skyscraper in New York were curtailed to 6 stories. For the next 77 years, the building remained a squat profile until the Norman Foster addition was added in 2006.

Down the street from DOWWTF?!, at the corner of 8th Ave and Greenwich Ave, construction is now under way on One Jackson Square, an 11 story luxury condominium, asking $6 million for 2 bedroom units. So far, concrete has been poured on 4 of the 11 story units, not all of which have been sold.

I suspect many of the pre-sold contracts cannot be dissolved, but if no fools step up to buy the remaining units, and if some of the existing contracts don't come through, and people pull out (as has been the trend in Las Vegas for over two years), the corner of 8th and Greenwich may not look like the developers hope...

Standard and Poors Drops Rating on Stuy Town Bonds

Standard and Poors decides to finally show up for work and look what happens...

"On Friday, Standard & Poor’s dropped its rating on the bonds used in Tishman’s $5.4 billion purchase of the Stuyvesant Town and Peter Cooper Village apartment complexes in 2006, the biggest real estate deal in modern history. Standard & Poor’s said it cut the rating, in part, because of an estimated 10 percent decline in the properties’ value and the rapid depletion of reserve funds."

(Keep in mind that Tishman's partner in the Stuy Town deal is BlackRock, which Merrill Lynch bought several years ago, and which itself was sold to Bank of America last week.)


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