Industrial Sector to Lead Recovery: Analysts

NEW YORK CITY-Increased defense spending is expected to revive the local industrial sector, followed by the Midtown office and, eventually, citywide retail markets, analysts tell GlobeSt.com. But with so many economic and psychological factors at play, it may be too early to predict post-Sept. 11 activity in New York City real estate.

Cushman & Wakefield executive vice president David Gialanella sees a confluence of positive factors contributing to an upturn in New York City’s office, industrial and retail sectors. “Several things are coming together for a more optimistic point of view,” Gialanella says. “Low interest rates, low inflation, the rapid prosecution of the war in Afghanistan…the fundamentals are starting to shore up their weaknesses going into next year and we’re starting to see the consumer coming back.”

Gialanella says the New York industrial market, which was the first to feel the economic pinch, is also poised to be the first to recover. “Companies reduced production and were living off their inventories,” he says. “Now they’ll have to go back into production to build those inventories.” Warehouse, distribution and manufacturing space will all be in demand come next year, Gialanella says.