The Archon Group's Michael Nachamkin noted that the interest rate climate made spreads better helping developers "juice" profits. However he cautioned, "when interests rates go up, that climate will change."

Cohen noted that sophisticated international investors have told him they think as soon as interest rates go up, real estate will be "a disaster." He added, "I don't have a crystal ball to tell you when rates will go up, but they will have to."

Norman Sturner of Murray Hill Properties said that one of the fundamentals for real estate investment is having patience. He gave the example of an investor's choice: buying a quality asset with a bad leasing situation or a not-so-quality asset with great leases. "At some point, the leases expire…and what are you left with?" He also noted with that with the current fluctuation in Europe and the Mid-East crises, money is flowing into the US in "incredible amounts. People who can turn an empty set of bricks into an asset are in demand," he said. "Finding money is the easy part."

Nachamkin called the rush to hold industrial assets a "national phenomenon," adding that publicly traded REITs have "seen the light" and realized the benefits of owning industrial space. "They're fairly stable and have high yields."

Sturner said if it weren't an election year, offshoring/outsourcing wouldn't even be discussed, adding that outsourcing can allow third world countries to come up to a decent standard of living so they can need US. "Let them go," he said. "It ain't the worst thing. They'll come back and buy what we have to sell."

When it comes to Lower Manhattan, Cohen, whose Capital Properties owns 111 and 115 Broadway, noted that there has been a "velocity of deals" and bargain hunters of late. He said retail interest is "starting to come back. Retailers are perceiving it as a permanent tourist zone. What happens over the next 10 years with residential conversions will have impact." Sturner doubts the viability of the Freedom Tower, now mired in litigation, asking, "who will put a tenant in that tower?" Sturner also predicts that the current workweek might edge down to a four-day one in the coming years increasing the importance of the leisure/entertainment industries.

Instant Insights /

Experts Weigh In on Interest Rates and Outsourcing

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