EisnerAmper/Morgan Stanley Forum Examines the Economy and the Real Estate Market
May 09, 2019
By Abraham Engelson and Zach Cohen
EisnerAmper and Morgan Stanley co-hosted the Real Estate Principals Breakfast Forum in Manhattan on May 5. Tony Charles, Head of Global Research and Strategy at Morgan Stanley Real Estate Investing, presented a forecast for both the U.S. economy and the New York real estate market. The key takeaway was that economic indicators (e.g., capital flows, jobs report, and interest rates) are expected to remain positive for the U.S. over the coming months and years. Furthermore, models show no upcoming interest rate hikes. “We expect interest rates to remain where they are for the next 18 months,” said Tony. “As for the New York real estate market, the best sector to be in from a return standpoint continues to be industrial and multi-family.”
The breakfast panel, consisting of multi-family owners and developers, included Greg Gleason of Corigin Real Estate, Arik Lifshitz of DSA Property Group, Samuel A. Raia of Raia Capital Management, and Edward R. Setton of Shamco Management & Shamah Properties LLC. The panel, which was moderated by EisnerAmper tax partner Jordan Amin, provided insights into the current and potential future position of the real estate market. The New York apartment rental market is experiencing steady price growth due to several factors. NYC has a steady influx of new renters, many of whom are people from abroad. This is both natural and longstanding as New York is a gateway city that acts as a key landing point for new immigrants.
Other factors are driving real estate market growth. The healthy job market is attracting Millennials to the area. Landlords are seeing strong tenant demand from the age 18-34 demographic. These young renters are also receiving significant starting salaries and wage increases to help keep up with rent increases. “Starting wages are up 20% to 30% in New York, and that’s probably the result of companies responding to the increased living costs here. Companies might also be able to pay higher wages because of tax reform savings,” said Arik.