The Madoff Mess and Real Estate
The author of yesterday’s article in the NY Times about Madoff’s impact on the NYC real estate market made a guest appearance on the Brian Lehrer Show to flush out the article. Bottom line: Madoff scandal=big problem for development. One issue: a bunch of developers and real estate folks suddenly have a whole lot less…
The author of yesterday’s article in the NY Times about Madoff’s impact on the NYC real estate market made a guest appearance on the Brian Lehrer Show to flush out the article. Bottom line: Madoff scandal=big problem for development. One issue: a bunch of developers and real estate folks suddenly have a whole lot less cash. Another: ain’t gonna be so easy to get cash. “Many of the developers…have lines of credit with commercial banks, and these lines of credit are secured by their personal net worth,” said Michael Stoller, who joined the discussion. “Now their financial statement is inaccurate.” Another: glut of office space, since many businesses lost their shirts in the last few days. And another: stalled or abandoned projects, oy vey. One developer apparently not affected by the Ponzi scheme is Bruce Ratner; not sure if you guys will think that’s good news or bad.
Reality Check [WNYC]
Photo by broken aperture.
I, for one, am bummed ole Bruce didn’t take a bath on this one, but Forest City is in generally poor shape, since a ton of their debt is coming due in 2009, ha ha.
Um, I think you mean “flesh out the article”. Unless they sent it down the toilet.
“‘very rich’ really have no effect on the market below”
There’s only one economic pie from which we all take slices from. Now, may I ask what your hedge fund methods are?
***Bid half off peak comps***
Mad[e]off wit’ yo’ monay…
Real estate is falling down, falling down, falling down. Real estate is falling down, my fair asshat.
***Bid half off peak comps***
Dave, that’s wild. Do you really believe markets are entirely disconnected from each other?
Every apartment sold to a super-rich person paying bubble prices resulted in a seller sitting on a sudden windfall which they could use to buy another apartment or house. Some added borrowing and moved up; others reduced borrowing and moved down or out. Each one of those moves made it possible for someone else to sell into the bubble, so in the end, every ultra-rich purchase finances several other more normal ones. You ought to know this — didn’t you yourself pay for your Brooklyn home by selling a Manhattan apartment into the bubble?
In NYC, this trickle-downn financed the bubble at least as much as trickle-up from middle-class buyers able to access securitized mortgages to overextend themselves.
Now, the music has stopped for both these games.
No ditto, just amazed by the implosion upon us…
Why Miss Muffett? Did you think this Mutant Asset Bubble was sustainable?! Borrow money money that you can pay back? Nope this was and is a disaster and 2009 is going to be a horror show..
The What
Someday this war is gonna end…
The “very rich” really have no effect on the market below…take your pick…$10MM, $8MM, $5MM…but they definitely have no effect on 95% of Brooklyn properties.
No ditto, just amazed by the implosion upon us…
MM – you are monomaniacal!