Even with such deals, some new buildings are said to be finding new tenants painfully scarce. A new 50-story building at 712 Fifth Ave., owned by a partnership of Salomon Inc. and Taubman Co., has filled perhaps as little as 10% of its space, according to knowledgeable real estate investors. Carnegie Tower, a new 60-story structure next to Carnegie Hall owned by Rockrose Group, is said to be similarly unpopulated.
Some real estate people are predicting that major companies will go bust before it's all over, and that's not including Trump.
The industry has recently been jolted by the difficulties of about 200 New York companies that have sponsored the conversion of rental apartments to co-ops.
Most of the problems have centered around buildings that have unsold shares and continue to have many tenants paying below-market rents. These sponsors' income has too often proved insufficient to cover their rising bills and real estate taxes.
New York State's attorney general jumped in last January and now requires special financial disclosure from conversion sponsors that get into difficulty. But the troubles have sent a scare through lenders, who are now typically requiring 25% down payments and often won't lend to finance purchase of co-ops in buildings that have a large number of rentals.
Meanwhile, owners of rental residential real estate have felt a pinch.
An analysis of 6,000 rental units by a brokerage called Feathered Nest found that rents have declined steadily since 1987. In one category, for example, single bedroom rent-stabilized apartments without doormen on Manhattan's East Side, average rents fell to $1,100 last month from $1,400 in December, 1987.
Naturally, news of such declines has been received gratefully by the tens of thousands of New York renters who have been wondering for years if prices would ever stop rising.
Property owners in the suburbs, meanwhile, have little reason to be pleased. One sign of the mood was the decision by the Long Island town of Rockville Centre to adopt an ordinance that charges $60 per "For Sale" sign and requires such signs to be smaller than they ordinarily are. The panicky town fathers were trying to halt a trend that made it look like almost everybody in town was trying to sell, with too little success.
The median home price in the New York region rose 150% between 1982 and its peak of $194,000 in the spring of 1988, but the price has since declined about 10%, says Rosemary Scanlon, chief economist with the Port Authority of New York and New Jersey. It now takes six months on average for a home to sell here, compared to half that during the hot market of the late 1980s.
Income figures for the region suggest that home prices may continue to sag. They show that a home buyer making the median salary in the New York area can only afford to buy a home that costs two-thirds of the region's median price, Scanlon notes.
Overall in the Northeast, the median home sale price rose 2% to $146,200 between the first quarter of 1989 and the comparable period of 1990, says the National Assn. of Realtors. That compares to a 7.6% rise for the West, to $144,000.
For Los Angeles alone, the rise was 6%, to $212,000; for Orange County, it was 4%, to $234,000.
MANHATTAN VACANCIES
Comercial vacancy rates in the Manhattan market
May, 1986 May, 1988 May, 1990 Midtown 6.2% 12.9% 16.2% Downtown 11.9% 13.3% 15.8%
Source: Cushman & Wakefield
