IF you’ve played the real-estate game since 2005, you should be quaking in your kishkas.
“Our steroids were leverage and the buyers were way over-financing,” admitted one investment broker who oversaw many such transactions.
Although many buyers could not afford the prices they were paying, they propped up the bottom lines with “reserve funds” that were, amazingly, also allowed to be borrowed from the banks.
These extra funds were supposed to help make payments until rents went higher.
The reserve funds, however, are almost all quickly running out.
“If their bank was handing over 90 to 100 percent of the money for the deal, they weren’t sensitive to what they were paying,” the broker said. “But if they financed the deal short-term, it’s now sayonara.”
Whose deals will survive depends on when they bought, and how they financed.
And those buildings that have to be sold by current owners or lenders will only sell based on current incomes.
“Buildings will trade much more on cash flow — on current and contractual cash flow,” explained another broker. “For the last few years, buyers were gambling that buildings would grow in value. And they did for six straight years. Now, the buyers want a yield going in.”
When we turned to our past lists of properties sold, that ol’ Excedrin feeling kicked in.
While some deals will be fine due to long-term tenant leases, more transactions are quickly heading underwater.
That’s because most of the properties were purchased based on future signed leases achieving unsustainable rents — say $80 to $100 a foot.
Despite the recent tiny increase in leasing volume, the reality of the new world order of rents is kicking in, and no owner is going to get the rents of his dreams.
That means, however, that bankers are going to harden their stances and more litigation and bankruptcies are on their way.
Remember when Rockefeller Center was lost by the Japanese after the market crash of 1987 sent office rents tumbling?
Nearly 40 percent of the Center’s leases were up for renewal on Sept. 20, 1994, and instead of garnering the original projections of $60 to $70 a foot, rents were closer to $30 a foot. The owners couldn’t pay the mortgage and filed for bankruptcy.
Now, all but the most stable and financially prudent owners with long-term financing are sparring with their bankers and hoping the government can bail them out before their own friends get their hot little hands on the buildings.
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First, there was the reality-TV series “Dating in the Dark.” Now there’s dining in the dark.
A Paris-based restaurant chain that hires blind waiters to serve diners in a pitch-black room, is seeking a spot in New York.
Amy Murawski of the Dana Commercial Group of Prudential Douglas Elliman, along with Bruce Smith of PDE, are handling the search to find a minimum of 3,000 square feet for the chain, called Dans Le Noir?, preferably in the Bowery, the East Village or the West Village.
“They also need at least 25 feet of frontage, a full basement and someone willing to take on a very cool tenant,” Murawski said.
Founded in 2004 by Edouard de Broglie and Etienne Boisrond, Dans le Noir? was co-funded by the Paul Guinot Foundation for Blind People.
The unusual gastronomic experience already has locations in Paris, London, Barcelona and Moscow.
To keep servers from tripping on stray purses and umbrellas, patrons park their belongings in a locker. Menus are read and orders are taken in a lighted bar area. Diners are introduced to their server who then leads them conga style to their table in a pitch- black room.
The entire experience is overseen by infrared security cameras, but unlike the new ABC show, “Dating in the Dark,” the video isn’t supposed to end up on “You Tube.”
“You are creating awareness about someone who lives in the dark,” said Murawski noted. “It’s kind of daring and while people have different feelings about it, New Yorkers are adventurous enough to try it. I can’t wait to make the reality here on the other side of the ocean.”
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Broadway Stages, a Greenpoint, Brooklyn-based soundstage company, is planning to lease, relocate, develop and expand into larger facilities with help from the Industrial Development Agency.
According to public documents, Broadway Stages expects to build or renovate several buildings at 359-381 Kingsland Ave. — the site of a former truck ing company.
The work will in clude constructing new 53,000 foot, 20,000 foot and 30,000 foot facili ties and renovating a 5,000 foot and a 9,000 foot building. lois.weiss@nypost.com