The Amazing Kreskin considers himself “the world’s foremost mentalist.” Earlier this month, he released his predictions for 2006 in areas including business, health, entertainment, sports, and others. Fortunately, his area of expertise fails to predict the future of the real estate industry for 2006.

According to the Cushman & Wakefield New York Capital Markets Group, total real estate investment sales for New York City for the year ending December 31 set another record and reached $16.8 billion, up from $15.1 billion the prior year. Additionally, 77 properties, representing $5.8 billion in sales, are already in contract for sale and are expected to close in the first quarter of 2006. The chairman of Massey Knakal Realty Services, Robert Knakal said, “The supply of available product for sale is shrinking while the volume of sales is holding steady.”

The president at Dividend Capital Total Realty Trust and a partner at Black Creek Group, Marc Warren, said, “While the real estate bubble now makes the front pages, I see a Manhattan market with supply and demand in solid balance in basically all product types.” The head of New York real estate finance for North American at HSH Nordbank AG, James Fitzgerald, said, “This is the year where we separate the men from the boys, no gender offense intended. If rates go up much further, the number of unemployed real estate bankers, especially the investment bankers, will increase dramatically. Finally, we will see some bad real estate deals hit the market. Hear the sound? It’s the crazy abundant liquidity evaporating out of the market.”

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The chairman and co-founder of Murray Hill Properties, Norman Sturner, said, “We are as enthusiastic about 2006 as we were about 2005.The prices will be a little higher to buy, but sellers will then rejoice in the increases. This will be the year that rents begin to catch up with buying and selling prices. Vacancies continue to decrease and general business looks strong. It seems to me that the math equals an up 2006.”

The chairman and chief executive of the Red Apple Group and Gristede’s, John Catsimatidis, said, “I believe that over the next 12 months, the real estate market in New York will soften.” The president and chief executive officer of BRT Realty Trust, Jeffrey Gould, said, “There will be a flattening in the market both as it relates to commercial and residential, so I would view New York as a whole as cautious and concerned.”

Frank Lively, the senior vice president of the real estate division of Wafra, the social security system of Kuwait, said, “There will be a continued strong interest in real estate assets as a result of continued liquidity, particularly true in the commercial office market, especially in midtown Manhattan.”

The president of Macklowe Properties, William Macklowe said, “Vacancy statistics have gone beyond equilibrium and as a result, rents are up, concessions down, and after three years of moribund job growth, the banks are starting to hire. I look for this to continue,not on a meteoric pace as it did 1998 to 2000, but at a steady pace. Our investment focus remains in Midtown, not downtown, where we have yet to see any signs of life or brilliance with respect to absorption, activity, and increased economics.”

On September 29, Equity Office Properties Trust closed on the $505 million acquisition of 1095 Avenue of the Americas. It acquired nearly 80% of the building from Verizon. The senior vice president of Equity Office for the New York region, Don Huffner, said that more than 5.1 million square feet is expected to be delivered in the New York area over the next two years, with a majority of this space being located in Midtown. Projects include the new New York Times headquarters on Eighth Avenue, One Bryant Park, and 1095 Avenue of the Americas. “The once-struggling Bryant Park neighborhood is truly being reborn, becoming home to luxurious condominiums, world-class office space, all attracting more than 20,000 office workers, residents, and tourists a day.”

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In 2005, an investment partnership headed by Belfonti Capital and the Carlyle Group paid $88 million for the 10-story, 185,000-square-foot office building at 485 Fifth Ave. This spring they plan to begin marketing 104 residences designed by the world-famous Peter Som and about 26,000 square feet of retail space.The chief executive of Belfonti Capital Partners, Michael Belfonti, said, “In 2006, one neighborhood will undergo the greatest renaissance: Bryant Park, home of the library and an oasis of green and great energy in the very heart of Midtown.

“Development of both rental and condominium housing in Manhattan may continue to slow in 2006,” Mr. Belfonti said.

“The more robust condominium development arena is losing momentum as the divide widens between the prices set by ambitious sellers and the capital that cautious buildings are wiling to put at risk,” Mr. Fitzgerald said. “I am worried about condominiums in undifferentiated locations expecting to get north of $1,000 per square foot – that is not happening.

“Nevertheless, take this from the guy who provided $500 million in debt on the residential condominium at 15 Central Park West, the Mayflower deal, where the units trade north of $3,000 to $5,000 per square foot, which sell without any difficulty.”

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The chief executive of the Moinian Group,Joseph Moinian,said,”2006 will be a banner year for the far West Side. The local government is investing heavily in the expansion of 42nd Street toward the Hudson River and the multiuse zoning regulations will allow the far West Side to eventually become a 24-hour neighborhood.”

The chairman of the Global Real Estate Practice at Greenberg Traurig LLP, Robert Ivanhoe, said, “The West Side should over the long term provide a natural extension to the strong Midtown market, as long as proper infrastructure plans are implemented.”

The president of the Praedium Group, Russell Appel, said, “Gentrification will expand through the New York metropolitan area. In Upper Manhattan, north of 96th Street, I expect an explosion of new activity.With all of the new services and retail,the Upper West Side,Harlem,and Washington Heights are becoming much more dynamic and attractive to live and work.”The senior vice president of City & Suburban Federal Savings Bank, Joseph Laquidara, said, “Harlem’s real estate renaissance continues. The rebirth started over five years ago, and its maturation has become firmly implanted as a vibrant real estate market, both residentially and commercially.”

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The president of Athena Group, Louis Dubin, said, “Value markets where price points are below the median will remain strong. Prime Harlem locations will be successful selling at or below $1,000 per square foot, and condominiums in the markets along the New Jersey water front below $600 a square foot will continue with robust sales due to strong demand for more affordable housing.”

Mr.Warren of Dividend Capital said, “I think the fabulous growth of Harlem and the outer boroughs will continue into 2006 on these areas being more acceptable to people from more traditional areas.”

“Harlem is a continuing improving market due to the proximity to downtown and ever increasing capital investment an improvement of buildings all around a new demographic continuing to migrate in,” Mr. Gould said. “As to Long Island City and the outer boroughs, there continues to be a great deal of land assemblage taking place mostly for residential condominiums and I have a concern for these areas if the Manhattan market flattens or reduces in values as it might,” he added.

The chief executive of Silvercup Studios,Alan Suna,and his brother,Stuart, transformed a former flour silo room of the landmark bakery in Long Island City into the largest independent, fullservice film and television production facility in the Northeast. Alan Suna said, “We are very optimistic for the next four to five years. We believe all the new housing units and office construction coming on to the Long Island City market during this time frame will be great. Such a concentrated infusion of a variety of middle-income and luxury housing in addition to the new office space under construction and planned over this time period will be sure to make services, restaurants, and other urban living amenities a profitable certainty for all concerned. As a result, we feel LIC is uniquely positioned to continue to grow, both as a location for housing and commercial space, at a far lower cost than Manhattan, while only one subway stop from Manhattan.”

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I have to agree with Joseph Moinian when he says it is an exciting time to be a New Yorker, as the last reaches of underdeveloped land become prime real estate. It looks like commercial rents will rise all over the city, including Lower Manhattan. Thousands of condominiums will come to market, and likely sell at stabilized record prices. I agree with Joseph Beninati of Antares real estate, who said “that the key to downtown Manhattan is continued growth in residential and lifestyle development.This is what is needed to fill up the new office buildings that are being rebuilt.” And I also have to agree with Robert Knakal, when he says,”Office buildings will once again be the favored asset as the lack of new office construction and the elimination of office space due to residential conversions will start to catch up to the market.” Many signs indicate there will be another excellent year for commercial real estate and a slight adjustment for condominium sales.

Mr. Stoler is a television broadcaster and senior vice president at First American Title Insurance Company of New York. He can be reached at mstoler@firstam.com.