Masters of None.

That old canard about being money not being worth the paper its printed on? Well, if three is a trend story, but your sample set maxes out at five, arguing that investment banks turned out to not be worth the buildings they are housed seems like a viable argument, even if that only turns out to be true of two of them.

Remember investment banks? Batting about the acronym IB to malign any boorish nonintellectual who was destroying wide swaths of Manhattan culture, with his evening at Scores followed by bottle service at Lotus and the unthinking embrace of ostensibly marquee quality architecture at positively obscene rates? That was so last week.

Really, let that sink in. FIRE, the term that has haunted New York and any other ‘intellectual capital’ center that has watched the traditional mix of light manufacturing, civil service and the arts get squeezed by an untenable (I think I get to use that term unreservedly now; if not, let me introduce you to a $700 billion bailout — which would pay for a shitload of theater companies and have a higher ROI on a job created/retained basis) market model, just lost one of its legs. Granted, the catch all ‘Finance’ embodied for better and worse by Jamie Dimon, who will cast a longer shadow over the next ten years of Manhattan more than any financier since his progenitor, Morgan, is still a heavy footprint, but rest easy, no one will ever tell you with a straight face that they are an ‘Investment Banker’ ever again. But if they do, be sure to have a good laugh.

In six months, a century of high finance, the center of a charlatan driven-engine of ‘compound interest’ spun out from 1929 to now as the absolute unstoppable force of western civilization, vanished. Really, allowing that Jimmy Cayne’s dope & bridge habit caused Bear Stearns to implode early, saying that investment banking died in seven days is a scenario the most exercised undergraduate Marxist sociology fantasy couldn’t have dreamed up, no matter how many Clash albums you own.

But this is an architecture blog, you say? Well, you say. I try to write about the culture of the city, and since the days of Milken, it’s hard to argue that any other culture mattered. Sure, those idiots who went to the kickball prom think they are the zeitgeist, but that is just part of a rapidly unwinding real estate scam, the rickety basis of which they are about to learn most painfully.

How will this abrupt change refashion the culture of the city? Well, aside from the glib, but still hoped for elimination of the term ‘bottle service’, the nasty effects will of course be felt some rungs further down.

Early signs are not good. Today it was reported that Starrett City bids will take a massive haircut. Not a bad thing in and of itself, but it will likely erode the almost infinitesimal gains in affordable housing, since little headway was made on 421 revisions and the Bloomberg administration has mostly paid lip service to developing new mechanisms to mandate affordability, we will see over-leveraged efforts on the part of organizations like the Toll Brothers simply whither. And once the likes of those people skip, there will be no modern day Sam LeFrak to take up the mantle.

The contagion may well move up and down the ladder. Debt servicing on Stuy Town blows up in about two years. Lacking a pliant Fannie Mae to bail out Tishman, who can say what happens when the largest rental complex in Manhattan becomes insolvent? In both cases, regulated tenants will have a modicum of protection, and are used to living under the tutelage of maliciously benign landlords, but what of the growing ranks of market-rate tenants who think that, you know, garbage should be picked up? Our knight in Shining Silver take another inch or two about the knees he already cut them off at, smiling and telling you he is all about constituent services, too late for you to realize his notion of constituency ends at about where his shoes go. And that is important information when the likes of Tishman start showing up in Albany hat in hand, demanding additional ‘reforms’ to rent stabilization.

Signature buildings only now just sprouting downtown, looking to remake the skyline of New York as more residential than commercial, will likely proceed apace. Sales may make completion a bit tricky. The Euro is losing ground — provided condos are willing to embrace all manner of sketchy Russians, it may be the hordes of ostensible discount shoppers from Europe drying up might not adversely effect things too much.

This is all just dithering about real estate. The vibrancy of this town should not depend on eyeing one’s burgeoning property investments, if only because this has proved to be futile just about everywhere else on earth at this point (though one should not discount the boundless egocentric focus of a New Yorker). What the past ten years have stripped is a thorough-going discussion of what it means to have land management. Now that value are plummeting to earth and far removed suburbs are reproducing the worst vestiges of urban decay (without the density that city services provide to offset the challenges), these questions are being tentatively raised. Here, the forever spiral upward squeezed out rational conversation about mixed use, about historical pricing patterns, about just about anything except the worst pimping of a Curbed comment thread.

So here we are, gazing at the interesting but intellectually bankrupt offerings of Herzog & de Meuron and Koolhaas, edifices that may prove compelling over time, but being touted on the verge of the nationalization of everything that made them possible, ring more than a little hollow.

On the commercial side, the outlook isn’t directly fatal, but leaking into territory where the conventional numbers don’t apply, since we are drowning in highly-leveraged debt. Lehmans’s commercial portfolio is positively absurd, as are some of the notable apartment complex deals in the Barron’s article (linked above), eye popping numbers such as writing $350 million in debt on a complex with $17 million in revenue (almost all rent-regulated) — this after the purchasers refinanced, cashing out almost the entirety of the purchase price.

As the Treasury gears up its printing press, driving our already absurd daily cost of living expenses higher, expect little relief in any way you can measure. The effects should start to become evident in a couple months. Charitable giving, already on the decline, will eviscerate arts organizations (how much was that new New Museum building next door?). Projects underway will slow and construction costs will abate. This will help in areas, such as the WTC, but the concomitant job loss (going all the way up the ladder) and shrinking tax base will offset any benefit. Though in place financing means many of the projects going up will finish, as things start to go sideways here and there, ripples such as construction firms going under and banks that finally start looking at their balance sheet mean the prospect of unfinished hulks in Williamsburg isn’t beyond the pale.

Sure doesn’t look any different outside. Yet. Nameplates haven’t been pulled down, and everyone is warily eyeing the market. The last days of the emperor are writ perfect. Denying the foolhardy greedy and myopic decision making of the last eight years means that doubling, trebling and more down is the only solution they can imagine. Stare at those numbers really hard and pretend. Change? We have no choice; no one has realized it yet.

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