Downtown rebuilding underway

Real Estate Weekly, Nov 7, 2001 by Scott A. Singer

On Sept. 11, the unthinkable occurred. Despite the unprecedented nature of the situation and the tremendous physical and psychological damage done, New York City and lower Manhattan began their recovery almost immediately. Rescue workers labored night and day to locate survivors, while both political and business leaders worked hard to restore some semblance of routine and get the city running again.

One of the most important sentiments expressed over and over again in the days following the attack was the desire to rebuild, to act on an abiding faith in New York City, particularly in Downtown Manhattan.

The community has its differences regarding the nature of what should be built to replace the Twin Towers, but remains united in its faith that Downtown will recover and resume its role as one of New York's best live/work environments.

As the future of the World Trade Center site was discussed, and building staffs cleaned up debris, other less visible steps toward "rebuilding" we under way Downtown.

One of the most important means of support for the rebuilding effort came from mortgage lenders. New York's commercial mortgage market was active throughout summer 2001 despite indications of a possible recession; owners and developers were looking for new financing packages, and lenders were seeking investment opportunities. Naturally, at the time of the attack, numerous financing transactions were in process for Downtown commercial and residential buildings. Although circumstances changed drastically the moment the planes struck the Twin Towers, and the resulting uncertainty could have been crippling, most lenders remained steadfast throughout, completing their deals even on properties close to the terrorist strike zone.

In the weeks since the attacks - in spite of continuing bad economic news - lenders have lived up to their commitments and sought new business. Some underwriting standards have tightened, but this is an appropriate response to a changed marketplace. Lenders are carefully considering the merits and risks of each transaction. But for every out-of-town lender who is hesitating while they wait for a committee to tell them if they can make offers in New York City, there are a dozen other institutions competing for the business. With so many lenders seeking transactions, and yet such strict underwriting standards in

place, the New York real estate finance market is in a strong position moving forward.

The lenders, like New York Life and the New York State Teachers Retirement System, who funded their existing transactions Downtown in the wake of the World Trade Center disaster made a statement of commitment to New York City and belief in the long-term viability of the real estate community. Lenders across the board today are backing up that long-term belief by moving forward with new transactions in spite of short-term uncertainty.