The Freedom Tower

The Wall Street crisis hitting the heart of the city’s financial district should slow construction of its biggest commercial real estate projects, the Associated Press says, including the World Trade Center and Atlantic Yards in Brooklyn. Quoting real estate experts the wire service moved a story saying that:

“Basically, people are afraid,” said Tom Geurts, a professor at New York University’s Schack Institute of Real Estate. “Although a project could be profitable, they are afraid to put their money in it because they don’t know what is going to happen.”

In the short term, businesses in partnership with Lehman Brothers Holdings Inc. and American International Group Inc., which had over $50 billion invested in commercial real estate around the country, had their deals threatened. Lehman and AIG were investors in many large real estate deals.

Barclays PLC’s takeover of Lehman’s assets included the midtown office building it owned and will keep many of the employees in the skyscraper, valued at $1.7 billion. Lehman bought the tower earlier this decade after leaving lower Manhattan in the aftermath of Sept. 11.

“That’s very good news, because otherwise 10,000 people would have been out of work and we would have had to deal with that. And we would have had another million square feet of office space on the market,” Mayor Michael Bloomberg said Wednesday. “This deal means that the building stays full.”