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New York City May Take a Decade to Recover From Pandemic

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Key Points

  • Don Peebles told CNBC he is expecting a gradual economic recovery for New York City following the coronavirus pandemic.
  • “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,” he added.
  • Peebles said he anticipates difficulties ahead for New York City in attracting and retaining potential new residents and businesses. Among them is the strength of other US cities, especially in places with a more tax-friendly climate.
  • Visit The Financial Today’s homepage for more stories.

On Friday, real estate developer Don Peebles told CNBC he is expecting a gradual economic recovery for New York City following 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.

“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,” he added.

Peebles said he anticipates difficulties ahead for New York City in attracting and retaining potential new residents and businesses. Among them is the strength of other US cities, especially in places with a more tax-friendly climate, 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.

New York City’s death has been frequently debated, particularly following landmark events like the Great Recession, 9/11, and the 1970s fiscal crisis. The grimmest predictions for the city have not materialized in each case. Yet, Peebles contended, the coronavirus pandemic has been “worse than all three of them.”

The city—once the epicenter of the COVID-19 outbreak in the United States—has only seen an acceleration of alarming trends that predated the health crisis, Peebles said.

“There was an exodus out of New York prior to COVID-19. 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 a result of that people were leaving,” he said.

Peebles said many people now realized they could work from anywhere. In particular, he said markets like South Florida are likely to see “massive growth” through a real estate lens. Peebles Corp. has developments in that area.

“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.”

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