Nevertheless, given that areas of softness are making themselves known throughout the five prime market sectors, most survey respondents say that multifamily will be the safe haven this time around. The Quick Survey pulled in responses from more than 1,500 participants, including lenders, sales and leasing brokers, developers and corporate real estate executives.
Asked point blank if we are in a recession, 60% of the respondents (roughly 900 respondents) voted no while 40% said yes. That's not a wide split at all, and it narrows still more when asked if signs of a recession are evidenced yet in their businesses. While they avoid the R word, some 55% (825) of our respondents said that yes, indeed, some belt-tightening has taken place. Some 45% said no.
"They used to drive at 99 miles per hour and now they're driving at 45," says Manhattan-based Insignia/ESG vice chairman John Powers. But Powers laughs off the sense that a slowdown is the bellwether of a recession, noting that at 45 mph, "we're still going forward. We were not, are not and will not go into a recession. The leading economic indicators are down only 2%. We've slowed down, but we are still consistent with the long-term growth trend."
Given the perceived threat of a recession looming overhead, we asked participants to place their bets on the top-performing market sector through the end of the year. Not too surprisingly, apartments garnered the healthiest response, with some 50% (750) of the voters coming down in its favor.
"There are a couple of reasons for this," suggests Mark Obrinsky, vice president of research and chief economist for the Washington, DC-based National Multi Housing Council. "First, everyone has to live somewhere--even in a recession. In fact, when times get tougher, some people who would otherwise have bought a home postpone that decision and remain as renters. So there's actually a bolstering of demand for apartments."
Second on GlobeSt.com's list of 2001's best-performing property types is industrial at 19% (285 respondents), followed by office, which garnered 18% (270) of the vote. Retail and hotel didn't even break into the double-digit figures, pulling in only 9% (135) and 4% (60) of the vote, respectively.
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John Salustri
John Salustri has covered the commercial real estate industry for nearly 25 years. He was the founding editor of GlobeSt.com, and is a four-time recipient of the Excellence in Journalism award from the National Association of Real Estate Editors.
