Real Estate Boom Turns into Bust

Jen Chung

Published Oct 1, 2008

Modified Oct 1, 2008

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Jen Chung

Published Oct 1, 2008

Modified Oct 1, 2008

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The NY Times delivers the verdict that the credit crisis has ended the real estate and construction boom. Developers aren't getting financing, landlords can't refinance properties, and companies are too afraid to move within Manhattan. Some notable examples: HSBC isn't moving to 7 WTC anymore, because bids for their Midtown location were 30% under their $600 million asking price; an under-construction Times Square building hasn't had a tenant for the past 18 months; and Standard & Poor's cut the rating for TIshman Speyer's Stuyvesant Town purchase bonds, "in part, because of an estimated 10 percent decline in the properties’ value and the rapid depletion of reserve funds." Developer Richard Lefrak says, "If there’s no liquidity in the system, it exacerbates the problems. It’s going to have a serious effect on the local economy and real estate values.”

Jen Chung

Jen Chung is a former WNYC and Gothamist editor.

Gothamist is funded by sponsors and member donations

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