New York is resilient, agreed panelists at a forum on the aftermath of Hurricane Sandy last week. But is it resilient enough?
Assessing the storm’s impact on the real estate market, developer Steve Witcoff focused on the continued demand for residential space downtown, and predicted that the storm would have little effect on property values. But Scott Rechler, of RXR Realty, pointed to troubling signs on the commercial side.
Some tenants in hard-hit downtown buildings are hesitant to move, he said, and at least one landlord, at 110 Wall Street, has canceled leases in the wake of the storm.
“You now have a sort of Zone A submarket. It’s going to be hard to value those properties effectively,” Rechler said. Institutional capital is out of the mix, he said, which “may create some inefficiency in the market.”
The panelists also differed on how the city should prepare for future disasters.
Sea walls were the answer favored by Joe Sitt of Thor Equities, a major landlord in hard-hit Coney Island. “I think people still underestimate the ramifications of this storm,” he said, pointing out that 8,000 New Yorkers were still without power two months after the storm had passed.
Other cities, from London to Buenos Aries to Shanghai, have invested heavily in infrastructure to protect against rising water levels, according to Sitt. “Venice [in Italy] spent five and a half billion dollars to try to address it,” he said.
Rechler, who also serves as vice chairman of the Board of Commissioners of the Port Authority, focused on the need to improve the city’s infrastructure, not just for future storms, but for any kind of disaster — from an earthquake to a cyber-attack.
“The next one could be horrific, but it’s not going to be Sandy,” he said.
Witkoff, however, questioned the likelihood that anything like the storm would happen again soon. “The last storm we had of this magnitude was in 1938,” he said.
But on one thing, the three real estate titans agreed: the president’s $60 billion relief funding bill for New York, New Jersey and Connecticut deserves national support.
Even the panel moderator, former New York Governor David Patterson, chimed in, noting that New York pays more in taxes than it receives in federal spending, and warning against hypocrisy on the part of lawmakers from other states that have received disaster relief funding in the past.
“New York really is all of America’s gateway,” Sitt said, in an eloquent plea. “Rather than looking at New York as some big, fat cat city, look at us as the feeder for the rest of the country.”