David Goldstein on Last Week's Poll

Landlords may be losing their grip in real estate, but in a matter of time the downturn will reverse itself. We asked our readers if they think 2008 is more of a tenants’ market compared to last year. About one third of you think that the power is in the tenants’ hands now, while the other 67% believe that the market has equaled out more or less. It doesn’t seem that anybody thinks all the bargaining power resides exclusively with landlords. The cooling of real estate prices isn’t the first speed bump and won’t be the last, according to David Goldstein, executive vice president and director of Studley.

“We’re at the beginning of a softening period. As leasing slows and availability rises prices are going to drop. It happened before and will happen again. Demand is slowing a bit. It’s not my first choice, but it’s normal. It’s the natural forces of the real estate cycle.

“As employment weakens, space opens up and supply and demand takes place. It’s not about what landlords can do, it’s a market-driven process. Landlords will have to be more competitive in order to retain existing tenants and attract new tenants.

“Many of the significant financial firms are actively rationalizing their portfolios.

“The whisper numbers on taking deals are starting to fade slightly in favor of the tenants.

“You can’t fight the physics of an environment that—in most experts’ opinions – is deteriorating. Fed cuts are trying to stimulate growth, but growth comes naturally.

“The beauty of New York metro real estate is that it’s so diversified. Those who made irrational investments may be up in arms because this is not necessarily what they bargained for. There hasn’t been a lot of irresponsible development, which will help.

“The question on everybody’s mind is: How long will it last? How significant will the event be? When will we start to come out of it?”"We’re just entering the next phase of a cycle. Only when we understand the magnitude will we be able to make some projections about when we might start to come out of it.”