By Konrad Putzier
If a room full of men who became rich by correctly anticipating market trends gives a bullish outlook, that’s good news.
In a panel headlining the 2013 NYC Real Estate Expo, John Catsimatidis, Francis Greenburger, Michael Ashner, John Lam and Stephen Meringoff made their predictions for New York’s real estate market in 2014.
Optimism dominated the round moderated by EisnerAmper’s Aaron Kaiser, although there were concerns that rising interest rates might spoil the party. John Catsimatidis, the CEO of Red Apple Group who recently lost his bid for mayor, was especially bullish.
“I’ve been in the business for 40 years and I’ve seen many ups and downs’” he said. “When you ask me where the market is going in the next five years, I’d say up.”
Catsimatidis said the likely new Fed chair (presumably Janet Yellen) urging low interest rates is a good sign, as are international developments: “You know the saying ‘You can’t fight the Fed’? Well, you can’t fight the G7 either, and they have decided that world interest rates are going to be low.”
Michael Ashner, CEO of Winthrop Realty Trust, said that not even a rise in interest rates would dampen his optimism. “I’m not sure New York moves like the rest of the world,” he said, adding that rising rates wouldn’t stop investors from flocking in. “The long-term security of New York is just incomparable.”
Ashner argued that a limited supply of land would keep real-estate prices up. “This is a place where they won’t build 100,000 apartments, as they would in Houston,” he said. “There are maybe 10 cities in the world that have such supply constraints that everyone will want to invest there.”
Stephen Meringoff, co-managing partner of Himmel & Meringoff Properties, said he is “a very optimistic real estate owner at the moment.” Barring an unexpected catastrophe, he envisions continued growth.
Francis Greenburger, CEO of Time Equities, was the only pessimistic voice on the panel. “My general outlook is cautious,” he said. “We can see some problems coming and there are others that we don’t see.”
Greenberger noted that not only higher interest rates, but also a rise in government debt and turmoil abroad might dampen New York’s real estate market.
Meringoff also said he expects the Fed to raise rates, calling the prospect “a cloud on the horizon.”
And while Catsimatidis doesn’t believe such a move is imminent, he sees it as a threat: “If you get a Fed president in the future who says rates should go up, at that point — fasten your seatbelts.”
