What’s in This Season

What’s the best sector of commercial real estate to be investing in right now?

Mr. Neibart: You still have to remain very cautious. What we’re spending a lot of our time on is the multi-tenant segment. We’re also looking at hotels and also the recapping of partnerships that are short of money.

To us, those three represent the best opportunities. The office market, as far as we’re concerned, continues to have declining rents and increasing expenses, and we’re still concerned with retail. It would have to stabilize, and the consumer has to stabilize in terms of the unemployment rates starting to drop again and consumer confidence coming back in the market so they’ll buy.

Well, the only reason that we’re interested in hotels is that they had been beaten down so dramatically in value that they’re trading at very, very significant discounts from their highs of 2007 and 2008. We think that when that corporate market comes back, hotels will do very well.

I think we’re seeing a few. But I think what you’re seeing is a lot of distressed hotels selling. We think that we have the expertise and the proper asset managers that are our partners will do a very good job in repositioning these hotel assets. That’s really what it’s all about. Hotels are in a daily fight to gain market share, and it must have the marketing and sales force on the ground to do that.

We’re certainly going to stay away from the specialty sector—resort hotels, land development, single-family housing. We think the industrial market is a slow market. Our thinking on the industrial market is that rents are not rising, that there’s plenty of supply for industrial tenants to choose from. So, in terms of being a business where value and money can be applied, we think there’s little chance of getting the proper returns that we need for this capital.

Yeah. From flex space to light industrial to warehouse.

I was answering on a national basis. New York, for industrial, will always outperform the national averages.