Property Grunt

Friday, July 24, 2009

Real Estate Chatter: What recovery?

Here is another batch of anecdotal chatter I have heard about the market.

If you are in the mood for good Korean food, take a drive up to Fort Lee. However, you better have a strong stomach for empty storefronts because the place is littered with them.

Another place where empty storefronts are becoming an epidemic is an exclusive enclave in a suburb of New York city. With the commercial market crashing and stories of foreclosures and desperate owners, one would think that these particular landlords would be pounding craigslist for tenants. However, finding tenants aren't a problem. It is just that no one can meet their price. You see the owners of these properties are a group of family dynasties who appear not only to have built up a huge reserve fund but also developed nerves of steel over the years. So now these storefronts have become homes for tumbleweeds as these dynasties wait for the next cycle to begin.

Seeing the real estate boom, a couple decided to roll the dice and start up a design oriented business that would cater with people with too much money and time on their hands. They picked a location that was flush with this particular population. Unfortunately, their timing was a little off since they established themselves during the final stage of the boom. And it appears they are learning that rich people can be just as stingy as everyone else during a downturn. Now this couple is running two business. The design firm and subletting the huge commercial space that they leased out.

Take it away Walter Cronkite.

Godspeed to you sir.