NEW YORK CITY-Word that eight lawsuits were filed in Florida over the election ballots was among election-related news that sparked a downward decline of the market on Wall Street yesterday. Trading closed with the Dow down 73, after having dropped 288 points around 2 p.m. and rallied a bit later. The Nasdaq closed 31 points down as well. These are only two signs that the economic golden days are drawing to a halt. The impact on commercial real estate has become the focus of panel discussions, water cooler talk and chatter on the overcrowded commuter rail trains to and from the city daily.

Standard & Poor’s was also down, ending the trading session with a loss of 9.14 points. Concern about increased heating costs this winter have some fearing rents will rise as owners pass off costs to tenants. Wholesale inflation was up last month, in part because of the rise of the cost of gas, by 0.4%. The producer price index was also up 0.4% last month. Energy prices rose last month 1.4%.

As, among other dotcoms, continues to struggle, and e-businesses like join on the landscape of defunct companies, the predictions of the majority of panelists in the real estate industry who spoke at the PACT conference last Monday (covered here) have increasing weight. Speakers such as Joe Fitzpatrick of Project Octane noted, “a shakeout is eminent.”

Many are predicting that skyrocketing rent, such as the more than $750 per sf Jil Sander will fork over for an East 57th St. retail address, as covered here, can’t hold. Richard Hurd of GE Capital tells, “Is the market too hot? Yes.” He adds, however, that neither he nor his company believes we are heading toward a recession. While some argue that there are enough financial capital companies looking for space that a dotcom shakeout would not impact the leasing world, others say the correction will get more vicious.

Reportedly, unemployment insurance claims shot up last week. The number has moved from 35,000 to 344,000 claims. This is the highest level since January of 1999. Retailers are reporting sluggish sales. Stocks dropped for such big name companies as Best Buy, Gap, Disney and Dell Computer. The Russell 2000 index was down 5.35.

Panelists at the NAREIT convention in the capital last month (also covered here) began the serious chanting of the word “recession.” Some industry insiders commented at the PACT conference luncheon that there is some concern that the many companies that diversified portfolios globally will have problems. A weak Euro and mounting fear internationally over the long and complicated voting for the presidency are driving international markets down.

The cost of leases and sales continue to rise, for now. Many, though, in this climate of trepidation and slowing, say the current rates won’t last.

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