Friedrich said that the number one complaint from tenants in lower Manhattan is that there isn't enough retail as of yet. He explained that in San Francisco for example, there is one-sf of retail for every eight sf of office space; in Chicago there is one-sf of retail for every five sf of office; but in Downtown, there is one-sf of retail for every 17 sf of office space, "therefore it is a good investment right now."

Gerson agreed with Friedrich, noting that there is a demand for retail, and "we need to meet that demand." Gerson did note that it is important to "be sure we can manage all the new construction projects."

The redevelopment effort Downtown was also debated by two key players following the Town Hall Meeting. In the "Fact or Fiction" panel, moderated by Michael Desiato, group publisher and vice president of Real Estate Media, both Bruce Mosler, president and CEO of Cushman & Wakefield Inc., and Kent Swig, principal of Swig Equities, agreed that Downtown has regained its footing since 9/11. "Downtown is in the best shape it's been in quite a while," Mosler said.

Both Mosler and Swig also agree that we are in a national recession but not a local recession. "New York has been able to remove itself from some of the challenges," Mosler said, adding that although things could get worse, "fundamentals are more sound this time around."

When it came to whether or not investment volume would reduce by 50% from 2007 to 2008, although both panelists didn't focus on any particular percentage, they did agree that transaction volume would go down; however Swig noted that it isn't related to value. "Investment sales volume will be down," Mosler said, but reminded the audience that there are trillions of dollars that will be reinvested in the market. "This year will be difficult in terms of lending," he said, "but when the market turns, it turns quickly."

As far as whether existing inventory will be negatively impacted when the new construction eventually does come online, Swig said that there would be an impact, but he said it would be a positive impact, rather than negative. "The only way to grow a city is to grow a city," he said.

Mosler on the other hand said it would be a challenge for existing landlords. "New product always produces a flight to quality." He further explained that it might have been better for new product to come online in a "staged fashion."

Instant Insights /

Insiders: Downtown Regains Its Footing

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