A lot of people think that success on Wall Street is connected to the New York City real estate market. The assumption is that if apartments and office buildings are selling well, Wall Street must be booming.
According to Todd Lippiatt, a Managing Principal at Aristone Realty Capital and former Wall Street exec, that is not necessarily the case.
“A lot gets made about New York real estate and Wall Street compensation, but there’s points of clarity that need to be made about that,” Lippiatt, a former VP at both Credit Suisse and Morgan Stanley, told StreetID. “In terms of who’s buying these $20, $30, $40 million apartments, they’re not anybody that works on Wall Street. Or if so, it’s a very rare occasion. Most of the people who work on Wall Street live in Westchester or Connecticut. They don’t live in the city, they don’t buy in the city at these prices — it’s other people.”
Lippiatt added that the New York real estate market could still be influenced by firms that are related to financial services.
“It’s all the supply companies that feed off of Wall Street,” Lippiatt continued. “To that extent, do I think it affects pricing? Sure. But there are a lot of other places that employ in the city. It’s the ripple effect.”
Thus, if Wall Street began to downsize, the New York real estate market might have something to worry about. But the opposite is not necessarily true.
“I don’t think what the average person made at Goldman Sachs in the year is gonna necessarily have a dramatic impact on the real estate market,” Lippiatt added. “But if Goldman decided to fire 10,000 of its employees in New York, that would have an impact.”
If Wall Street execs aren’t attracted to the New York living experience (costs and all), you might wonder about the identity of those who are living there.
“There’s a ton of income here,” Lippiatt explained. “Everyone has to live somewhere, and if you happen to work in the city and are employed in the city and the city generates a lot of jobs, you have to find a place to live.
“Once you get past that, what drives [New York] — it’s any number of things. One of the major things that drives it is [the fact] that the island of Manhattan is not getting any bigger.”
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