Which Sector Is Getting Hit Hardest?

This week's Quick Poll shows many people think retail is the industry being hit hardest by the sluggish economy, with 51% respondents selecting that sector. Both office and multifamily were the next popular choices, each garnering 21% of the votes, followed by industrial with 6% of the votes.Jim Kruse, a senior managing director working out of CB Richard Ellis' Beverly Hills offfice, differs with the poll populous.

Our investment business in the office sector has gotten kicked in the head. There are three groups in the office sector right now: Number one, the group that has put properties on the market and that have not gotten the offers they wanted so they pulled their properties off; number two, are the people who put properties on market at yesterday's prices, like June of 2007 pricing. And they just have failed to really embrace to today's pricing, failed to recognize that pricing, and so those properties languish on the market. Third, there's the segment where transactions are getting done. Where people are finding the cracks in the market and filling in those cracks. They're looking in West Los Angeles, where there are not a lot of huge blocks of space available, but they find opportunities where they can assemble parcels. Or they're looking at office buildings that might have a significant rollover.

But all in all, I think the office building business has been hit the hardest. I'm not going to take away from the fact that there has been some retailers that are circling the drain right now. The housing slump, rising fuel prices, soaring food costs—the consumer right now is getting kicked around.