Letter from the CEO

The entire globe is facing 2020 from a different lens than before.  New York is always at the heart of it, as it is known to be the engine of the global economy.

The current governor of New York, Andrew M. Cuomo, said in one of his speeches, that “New York is going to overcome the Corona crisis, thanks to the New York toughness”.  New York is the world capital of commerce and its real estate market will return to its former glory, even if its lifestyles change in the short term – always growing forward smartly.

Awareness of the pandemic has cooled down the conditions in real estate, and that comes after two significant rate cuts by the Federal Reserve and the statewide shutdown of non-essential businesses for the past three months. Without a lot of the data points, the full effects of the Corona virus on the NY market are yet to be seen, but there are those who predict dark times, saying there will be psychological implications, besides economic and health-related ones.

Among these people are also real estate professionals who, in their view, believe that overcrowding and friction in urban life are no longer desirable, especially after the pandemic, making spacious suburbs ever more enticing. Others are thinking of building larger apartments with specific designated areas for work and study, in contrast to the compact dwellings that have gained momentum in recent years in urban cities.

This is a perfect time to implement innovative new design ideas of integrating tall buildings with green-living spaces and common areas, offering the option of a suburban lifestyle within an urban shell.  It will create a community neighborhood within a vertical skyscraper, like what we are doing at 9 DeKalb Tower in Brooklyn, NY and 247 Cherry Street in Lower East Side, Manhattan, as the tower’s design features several sky decks, a community garden and meeting space to name a few.

This pandemic is of course a primary influence on all the other parts of our real estate economy: Fed’s decisions, potential currency movements and even the speed of relocations.  We can already see that the pandemic has accelerated some trends, whereas other trends reversed. For example, demand for online shopping has increased exponentially and will likely continue, while the ongoing trend for the densification of work and living space is now under scrutiny.  Across sectors, these trends differ and have varied implications for real estate demand.  As such, the real estate industry has reacted smartly and swiftly to the challenges presented by the COVID-19 pandemic.

In my honest opinion, it seems that these predictions are still very premature. It is unclear which strategies will be viable when so many unknowns are yet ahead of us. We can clearly see, that even with the ongoing pandemic, people are still looking for the urban lifestyle – they miss the social interaction that a boutique neighborhood provides. And if we can learn anything from the history of this magnificent city, it is that NY certainly deserves another chance to show all the world what she is made out of.

The height of construction, the skyscrapers and the famous urban fabric of New York, the capital of the world economy, did not go away after the great disaster of September 11th.  New York returned to function as a business volume and cultural center whose global influence has grown even stronger in the last two decades. NY persevered at the onslaught of COVID-19, starting as having the worst number of cases, to being the best.  New York seems to be bigger than any tragedy it faces and so, the local real estate market is known as the "recession-proof" area. Yes, even in this crisis, like those before it, we will certainly see some volatility in the market on short-term scale. But in the long run, when economic prosperity returns, New York will be one of the first to recover and as always, lead the way into a smarter future.

Stay safe and be healthy!