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Real estate developer Don Peebles told CNBC on Friday that he anticipates a slow economic recovery for New York City in the wake of the coronavirus pandemic.
“I think New York will ultimately come back. It’ll come back differently. It’ll be a different place, and it will be much more affordable,” said Peebles, CEO of privately held Peebles Corp., which has a corporate office in lower Manhattan.
He added on “The Exchange,” ”I think it’s going to take New York about a decade or so to dig out of this. Maybe longer. But it’s not going to be soon.”
Peebles said he foresees challenges ahead for New York City in attracting and maintaining new residents and businesses going forward. Among them is the strength of other U.S. cities, especially in places with a more tax-friendly environment, he said.
“New York City can come back, if it becomes competitive and if we all recognize that we’ve got to go and compete with South Florida,” he said. “We’ve got to compete with Nashville, [Tennessee]. We’ve got to compete with Austin, Texas, and Dallas, Texas. Absent of that, if we keep these blinders on, New York City’s hole is just going to dig deeper.”
Previously rumored to have weighed running for mayor of New York, Peebles said Friday that “probably I will focus on my business, but we’ll see.” The city’s next mayoral election is 2021. The current officeholder, Mayor Bill de Blasio, is term limited.
The death of New York City has been debated often, especially following seminal events such as the Great Recession, 9/11 and the fiscal crisis of the 1970s. In each case, the most dire forecasts for the city haven’t materialized. But the coronavirus pandemic, Peebles contended, has been “worse than all three of them.”
The city — once the epicenter of the United States’ Covid-19 outbreak — has only seen an acceleration of troubling trends that predated the health crisis, Peebles said.
“There was an exodus out of New York prior to Covid. New York was becoming less competitive in terms of it becoming a business-friendly environment. It was less competitive and less attractive to high net worth individuals, and as result of that people were leaving,” he said.
Now, Peebles said many realized they could work from anywhere. From a real estate lens, in particular, he said markets such as South Florida are likely to see a “massive growth.” Peebles Corp. has developments in that region.
“New York City, I mean some major projects are selling now at 50% discounts for new construction,” he said. “I think that shows some real stress.”