I was recently lucky enough to attend a conference, and here are some of the things I heard:

I was recently lucky enough to attend a conference, and here are some of the things I heard:

Sales to ex-US buyers may slow; however there is a deep pool for $2B deals – evidenced by Brookfield’s sale of 245 Park Avenue (I used to work for a Brookfield predecessor in that building :)

“People are moving to the Upper East Side to save money to move to Brooklyn “ was one of the quotes of the night.

Forest City is getting $1,500/sf in one of its for-sale projects in Brooklyn. Authenticity is still a big deal in Brooklyn, it may never be Manhattan — Brooklyn is different – a “maker-market” where you know the name of the Barista, and grow your own vegetables.

In discussing risks, a panelist who took the discussion to political risks referred to the “Orange Swan” to peals of laughter and some applause.

We talked about 421(a) a lot!  {Here’s a not bad article about 421(a)}

One speaker discussed the challenges of leasing in an office market with a lot of construction and renovation under way. She pointed out one potential offset that she called “dedensification”, which she speculated could add 11mm sf of demand (derived as about 10% of the leasing in New York in the years from 2011 to 2015). By which she meant that companies have been decreasing the amount of square feet per employee – called using space more intensely, or “densifying” – both to save money post-GFC, and because of tech company experimentation with workplace layout. The speaker’s theory was that this trend may reverse (I imagine the buildings inhaling and exhaling, and the employees getting jammed together and then spreading out again as the building’s lungs fill with air and then contract again.) The data here, by the way, is that Manhattan has now 15 million square feet under construction or renovation for delivery mostly in 2018 and 2019, but starting from strength with only 10.3% vacancy. To put 15 million sf in perspective that is more than half the size of downtown Charlotte. Data from the Colliers website.

We heard about the wonderful Cornell Tech Campus on Roosevelt Island. I was surprised to hear it is only 230,000 sf – (maybe just phase I?). A speaker described it as the “commercialization of academia”, with no full floor tenants, for startups, “tenants as magnets” AND “hospitality in the workplace” – I love those last two concepts for office landlords thinking about succeeding in the 21st century.

As traditional retail tenants disappear into the digital realm, medical and fitness users are replacing them.

Lastly, urbanization is so ingrained into the national workplace that even the “cheaper edge cities” like Charlotte and Raleigh want “New York style” urban amenities like Whole Foods, according to one of the speakers.

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