Commentary with Eastern Consolidated's Alan Miller

Which Sector Is Getting Hit Hardest?

When you’re not doing so hot, there’s always the hope that somebody else is doing worse. If you’re involved with the industrial sector it seems you have little to worry about since only 7% of the polled GlobeSt.com readers think you’re being smoked. An almost equal amount of readers think multifamily and office are suffering the worst (21%) and (22%) respectively. More than half (51%) of the polled GlobeSt.com readers decided that retail is taking most of the licks of this economy. New Yorkers love to explain that their town is different than the rest of the country, and Alan Miller, senior director of Eastern Consolidated, is one of them. He doesn’t think the poll numbers match with what is going on in the Big Apple, yet.

“What stands out is half of the people are saying retail is being hit the hardest. I can’t tell you if the retail average is accurate. I’m surprised to see that 50% attribute problems to the retail area. I hear a lot of things. There are a lot of deals being signed in the Meatpacking District where record-breaking deals are being signed.

“The prices people are paying to get into these retail spots don’t reflect these numbers.Every retailer in the world is clamoring to be in the Meatpacking District. SoHo has come back. I don’t think SoHo or the Meatpacking District are affected. Maybe we’re talking about secondary areas.

“Absolutely the office sector has been hit. They were telling us we were going to see triple-digit rents, which was a little bloated and overstated. There’s lots of space because we’re in a sort of recession right now, but the best class A buildings will still get bids.

“Offices and hotels always go with the economy. They could get hit hard. There are not many trades going on, but the ones that are still at high prices. The volume’s not there.

“It’s been so good for so long. There needs to be a fundamental change of the global economy. It’s been a bull market for so long things have been overlooked. This is not just an American problem. The gas prices don’t bode well for the future. We’re going through a little bit more challenging times.

“Young brokers, they can’t imagine this and have never seen anything like this. Me, I’ve been working hard. I’m going to get market price.

“Without many banks lending, it’s tough. Only the strong will survive in a period like this. Something has to happen. There’s a lot of distress out there. We’ve seen this movie before, but this time it’s a little bit different.

“I’m sure industrial is sort of safe. Multifamily, at the end of the day, is always a safe investment. In New York City, multifamily has always been and always will be a good investment. Those are anomalies though. New York is the last to be affected, but there are big changes coming. There have been some big land deals, which is a good sign. They’re not making any more of it.

“There have been no fire sales, but there are vulture accounts from people that are just waiting.”