"The East Side of Lower Manhattan is pretty much going to be dead," predicted Stuart Rothenberg, a managing director at Goldman Sachs, whose firm is relocating from a number of locations in that area to a site across from the former World Trade Center. "That's a lot of space that's not going to get eaten up for a very long time."

Rothenberg said that the likelihood of former office space in the financial sector getting snatched up en masse by residential developers is unlikely. And his prognosis for the West Side of downtown isn't a whole lot rosier – he says developments there are "going to take longer" than projected.

On the retail end of the discussion, the audience was greeted by Lee Neibart, a senior partner of Apollo Real Estate, forecasting that Manhattan could see a lot of empty storefronts after a holiday season of wretched sales results. Another way that retail is getting killed, he observed, is because the chains' suppliers can't get sufficient credit to make their products.

"All of these retail businesses have to be significantly effected quickly by the lack of credit and the lack of equity on the market," Neibart said.

Neibart also had a rough prediction for the institutional-investing community. When their investment reports come out in January and February, the losses incurred from putting money into hedge funds aren't going to make members happy.

But that could wind up being a good thing for the real estate industry, he said. If interest rates are lowered and liquidity finds its way back into the market, investors might look toward commercial buildings again. "Our product, properly leveraged and capitalized, will start seeing higher allocations," Neibart said. "I'm hopeful that might get us back in the game earlier."

Instant Insights /

Panel: Credit Fallout Isn't Discriminatory

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