Manhattan Property Could Strain Calpers

A Tishman spokesman said the partners are confident in their investment. "We fully anticipate our partnership will fund more capital into the project, as necessary," he said.

Calpers hasn't disclosed the current valuation of its stake in the 80-acre park-like complex by the East River. At the time when the investment was made, Calpers projected an internal rate of return, after fees, of 13.5%, according to a Calpers document. A Calpers spokesman declined to comment.

The potential loss on the New York City apartment project would deal another blow to Calpers. Already, the $223.9 billion fund has said it could lose much of its $970 million investment in a California land deal that has fallen victim to the housing bust. LandSource Communities Development LLC, a partnership that involves Calpers and owns 15,000 acres of land outside of Los Angeles, filed for bankruptcy-court protection in June.

Rich Russians save New York real estate market

New York real estate seemed standing apart from the housing crisis sweeping other cities of the USA. However, the city needs new foreign investments, particularly from Russia, to keep its privileged status unchanged.

Today’s price of a house in Manhattan is $1 million – the prices here have soared 14% compared to the similar period last year. Nevertheless, the new round of crisis makes local real estate agents apprehend a slump of prices.

Some market participants believe foreign investors, who take advantage of weak dollar, will not let the market down. Rich businessmen from Italy, the UK and Russia have purchased record amount of properties recently.

Real estate bust hits Long Island economy hard

Long Island's real estate market generated $6 billion less in sales in 2007 than it did just two years before, costing the region millions in tax revenue, consumer spending and incomes, along with thousands of jobs, a Newsday analysis has found.

A few more than 26,000 homes were sold on Long Island in 2007, compared to more than 40,000 in 2005. Median prices, too, have fallen. As a result, 2007 sales generated $16.4 billion, compared to $22.4 billion in 2005 - a 27 percent decline, Newsday found.

What's more, the median home price of houses currently on the market has also fallen, an indication that the declines in sales revenue probably will continue.

Manhattan shows first cracks

As the US housing slump deepened over the past three years, Manhattan’s real estate market seemed immune. Instead of crumb­ling with the rest of the nation, prices continued to rocket. Sales surged and new condominiums found multiple bidders. For a long while, Manhattan property was in an orbit all of its own.

But there are growing signs that this last bastion may be giving way. New York City, the seemingly indestructible foundation of the nation’s luxury property market, has this year begun to shown signs of strain. In the second quarter, traditionally the hottest property season, sales slumped 38 per cent to a five-year low, according to the Corcoran Group, the city’s largest residential real estate group.