Amid doom-and-gloom reports about the national economy, records will be shattered this year for investment sales of commercial real estate in Manhattan.

For the first 11 months of 2007, according to a report issued by Cushman & Wakefield, more than $50.26 billion — yes, 50 billion dollars — in sales and contracts for commercial properties were closed in just the borough of Manhattan.

That’s about a 164% increase versus the first 11 months of 2006. In 2005, commercial sales in Manhattan amounted to $22 billion through November.

Looking ahead, with a turbulent credit market and a vastly different economic climate than the previous two years, industry leaders have mixed predictions about investment sales for 2008.

“We continue to see high transaction volume, though with less activity than we experienced earlier in this year,” the managing director and president of ING Real Estate Finance USA, David Mazujian, said. “$50 billion in sales is impressive, but I guess the real question is how much of the sale went under contract in the past few months, or is there overhang from the late summer?”

He added: “Next year, I expect lower transaction volume until the credit markets settle down. The only certainty about the cost of capital today is that it’s higher, but it is still difficult to determine the ultimate ceiling.”

A co-founder and managing member at Murray Hill Properties, Norman Sturner, said New York City “continues to lead the national marketplace in size, desirability, and pricing. As I continue to reiterate to anyone who will listen, the New York City real estate marketplace is healthy and remains steady.”

As for declining pricing on properties, he said: “When a property purchased for $500 per square foot 18 months ago is offered for sale at $1,500 per square foot, and is subsequently sold for $1,100, I do not consider that declining pricing. The perception that what affects Chicago or Los Angles must affect New York City is erroneous and has been disproved many times over. The liquidity crisis will affect those buyers who would not, should not, and could not be in this market without sufficient capital to withstand downturns and slumps that affect every market.”

He continued: “The extraordinary real estate financing of the past seven years has allowed marginal and sometimes part time investors to increase pricing and competition to unsustainable levels, with very little capital to lose. Now that the financing market has tightened, I believe we shall see opportunities arise from owners and sellers who will not or cannot meet the new loan to value requirements. We see 2008 as a unique buying opportunity year.”

The managing director at Jamestown Properties, Matthew Bronfman, said 2007 “got off to a great start. The first half was a great time and that is when I would guess most of the trades took place. I don’t think that much is trading right now, compared to what traded earlier in the year. In 2008, I think there will be a flight to quality, where truly special assets still trade at high values. But the days of using aggressive debt are behind us.”

The managing director of Natixis Real Estate Capital, Jon Brayshaw, said properties are trading, but many investors and brokers are taking a “wait-and-see approach.”

“With so many people in the market echoing this sentiment, it is hard to imagine that overall transaction volume is outpacing fourth quarter 2006,” Mr. Brayshaw said. “We think there will be continued appetite by well capitalized investors and lenders to purchase and finance high-quality assets in the markets like New York in 2008. In the absence of an increase in cap rates, it is hard to imagine how overall investment sales volume can be maintained in the current credit environment.”

The chairman and founder of Apollo Real Estate Advisors, William Mack, said distress in the market “will come when people will need to take their property to market, which only comes when you’re financing runs out and you have to refinance in this market. When you look at the capital markets, they’re frozen. There is going to be lots of opportunity around for the well-heeled and experienced, and lots of pain for the others.”

Industry leaders expect rents to fall in 2008, due to the credit crisis and the loss of jobs.

“This year was the last hurrah in New York City,” the chairman of the Lightstone Group, David Lichtenstein, said. “For the next two years as it will take that long for companies to release space to wash out. The next nine months will be the worst deal time in years because the credit market will be tight, especially for big deals.”

“Expect deal flow to slow down, as buyers will not be able to hit the bids,” he added.

“The looming job cuts within the financial sector, coupled with the difficulty in borrowing, will translate into sluggish rent growth,” the chief investment officer for ABP Investments, Barden Gale, said.

The president of Silverstein Properties, Larry Silverstein, said 2008 “is going to be a much tougher environment in which to function.”

The chief executive officer of a prominent real estate development company in the region, who prefers not to be identified, said: “I believe that the residential and office investment sales brokers are continuing to talk up what properties should sell for in this market. Thus they are not being really candid about what is really happening this is especially true on the residential side.”

The president of SJP Residential, Allen Goldman, said a changing cast of buyers is the reason why the commercial sales market is still robust given the turmoil in the credit markets.

“Far more foreign investors are involved in transactions today than ever before as a result of the cheap dollar and the need to reinvest vast amounts of dollars being sent and made overseas. In the eyes of foreign buyers, our markets are safe and cheap,” Mr. Goldman said. “Foreign investors have a great deal of patience. They will continue to invest in our market at low cap rates as long as our economy remains reasonably sound and offers continued growth in rents and the expectation of low inflation. In the eyes of foreign investors, price per square foot and rental rates continue to appear to be a bargain relative to such markets as London, so why not invest in New York?”

Mr. Goldman added: “As for domestic buyers, except for the big buyout funds that have the capacity to put down the larger amounts of equity now required, the market will likely see fewer participants next year. There’s plenty of mezzanine debt available to make up for the newly increased equity requirements. But will the numbers work for those in need of this form of capital? I’m not so sure.

“I believe the transaction market will continue to remain relatively strong in 2008, so long as foreign money views our prices as being cheap and our economy as being safe and stable. It’s what’s keeping cap rates so low. Take the foreign buyers out of the equation, and you’ll see an old fashion cyclical downturn, in this case brought on by the credit crunch, which would finally bring some sanity back to the market.”

Over the past three weeks, seven major properties have gone under contract for an aggregate sales price in excess of $2.3 billion, according to an executive vice president at Cushman & Wakefield, Scott Latham. Four of the properties are to be sold to foreign investors. Mr. Latham said he expects this trend to continue for the foreseeable future.

The director of the National Multi Housing Group at Marcus & Millichap, Peter Von Der Ahe, said the market has weeded out all buyers and sellers that are not highly motivated.

“Velocity has definitely slowed since August as the adjustment in financing has removed your highly leveraged buyers from the marketplace and on-the-fence sellers as well,” Mr. Von Der Ahe said. “In 2008, I predict that we will see a healthy amount of inventory hit the market. There are still many owners who were waiting for this run of appreciation to end before placing their assets on the market, who may attempt to sell in 2008.”

“If Wall Street’s performance slows in 2008, it will be a hard to sustain the level of appreciation we have all become accustomed to over the past few years,” he added.

“Manhattan sellers have not yet reacted to the market by drastically lowering their prices, but perhaps if the trends in the capital markets continue in 2008, they will,” the chief operating officer of Citi Habitats, Gary Malin, said.

Based on an inventory of Manhattan properties that are now on the market, the year-end sales figures might reach close to $55 billion. The owner of the Class A office building at 650 Madison Ave., Hiro Properties, is expecting to sell the 27-story, 600,000-square-foot tower for $900 million, or $1,500 a square foot. Industry leaders believed the property would sell for no more than $660 million, or $1,100 a square foot. In the meatpacking district, industry leaders expect the 300,000-square-foot building at 450 W. 15th St. to trade for about $170 million, or $570 a square foot. In SoHo, Cushman & Wakefield is marketing for sale mixed-use buildings at 90–94 Grand St. and 42–50 Green St.

My tarot cards are in place, and I continue to be cautiously optimistic for investment sales in 2008. The biggest obstacle that continues to block the road is the inability to finance acquisitions in the greatest city in the world. The capital markets are closed and lenders prefer to sit on the sidelines instead of financing. Nevertheless, investors are very resourceful, and when the turmoil in the capital markets subsides, investors once again will be actively purchasing real estate. The biggest question is how long we have to wait for a stable market. Six to 18 months is the range cited by experts; time will tell who is correct.

Mr. Stoler, a contributing editor to The New York Sun, is a television and radio broadcaster and a senior principal at a real estate investment fund. He can be reached at mstoler@newyorkrealestatetv.com.