Lawrence Kushnick: Where are we now, where are we headed and where are the opportunities?

No doubt there are daily mixed signals and forecasts as we wade into the real estate recovery period. The word "correction" has oft been replaced with glimmers of "breaking even". Still, the commercial real estate market took less of a mauling than residential real estate. The current actuality is that rents are the lowest they have been in years and investors are bidding up property values due to low interest rates, even though financing availability is less than predictable. Sidelined market money is making its way back into property investments and our skylines are abuzz with cranes, construction chutes and sidewalk sheds. The Brooklyn waterfront from Willamsburg down to Sunset Park and the western end of Long Island City Queens are growing straight up. The affordable housing complex at Hunters Point South will be the largest since the 1970s Co-op City in the Bronx and Starrett City in Brooklyn. Long Island City is also investing in schools and a $28 million library is already underway. The main issue is construction costs and project delivery methods. Many/most in the construction industry and affiliates have incorporated considerable modifications in their "cost of doing business" model. Companies kept good hard working and productive personnel working via break even lost-leader jobs so that when the "recovery" hits, the company's team would be fully intact. In reality, many were sidelined and scrambled into other industries leaving a vacuum for key personnel. Others chose the wayward underbidding back end change order model which just made the construction process even uglier. This "recovery" is fraught with new regulatory enforcement efforts that have never descended upon the construction industry so massively. Enforcement of labor and wage laws, Code and OSHA regulations, have caught many new and/or re-emerging construction entities off guard. The short answer- put your regulatory tool belt on first and build second. Lawrence Kushnick, Esq. is a member of Kushnick & Associates, P.C., Melville, N.Y.