Bill Rudin: tighter credit, global instability will not stifle NYC investors

One of New York City’s top real estate magnates sees a rosy future for the city’s real estate financing despite signs of global instability and tightening credit.

Bill Rudin, keynote at A.F.I.R.E. winter 16' conference
Bill Rudin, keynote at AFIRE winter 16′ conference

One of New York City’s top real estate magnates sees a rosy future for the city’s commercial real estate market despite signs of global instability and tightening credit.

William Rudin, vice chairman and CEO of Rudin Management Company, gave the keynote address for the 2016 Winter Conference of the Association of Foreign Investors in Real Estate (AFIRE) last week at the Mandarin Oriental hotel in Manhattan.

Rudin, speaking to a banquet hall packed with members of the real estate industry, admitted that credit is tightening as falling oil prices and a weakened dollar cause some concern.

But there is still “significant liquidity” and the city’s investor base of pension funds, sovereign wealth funds, REITs and high-net worth won’t be deterred.

“New York real estate remains attractive and competitive, with the ability to offer yield in addition to capital creation on a long-term basis,” Rudin said.

Demand for space in the city is still high, the billionaire developer said, and there’s plenty of capital available for ambitious developments. He pointed to the massive Hudson Yards project on Manhattan’s far west side, where Related Companies and Oxford Properties Group have secured more than $6.3 billion in financing — about $3 billion of which comes in the form of debt.

Midtown submarkets will continue to evolve, he added, with new projects like the addition of SL Green’s 1.7 million sq ft skyscraper at One Vanderbilt and L&L Holding Company’s 900 story office building at 425 Park Avenue.

“These projects will create some relief on the supply side,” said Rudin, “[and] we will continue to build upon the momentum because our office stock is aging.”

Financial markets around the world, particularly in Europe, Brazil, and China, have stalled in recent months. But Rudin said investors will continue to flock to the New York due to demand of an increasing population, continued public infrastructure investment, and the higher long-term prospects for commercial space in New York City compared to cities like London or Hong Kong.

“New York has been a shipping town, a manufacturing town, a center of finance, a tech center, and a healthcare and education center,” he said. “We are constantly able to retool and reinvest in our city, in our people, and in our organizations and our space to remain the place to be.”

The Rudin family’s New York City commercial real estate portfolio boasts 17 buildings, making it one of the largest privately-owned real estate portfolios in New York.