Industrial survey hints at change in direction.

Industrial survey hints at change in direction

In a business characterized by cycles, a change in direction may be imminent, according to the most recent Greiner-Maltz Company survey of industrial building space in Brooklyn, Queens, and Long Island. After a period of steady increase in availability and decline in absorption, figures for the last six months reveal a leveling off.

One six-month period does not define a cycle, or even a trend, and based on years of experience. William Greiner, who heads the Nassau/Suffolk office of the firm, said. "It is now critical to watch activity and subsequent availabilities over the next six months," said Greiner. "If government predictions are correct, and the current slight upswing in the overall economy continues, we should see an improvement in absorption. Typically there's a six month lag between general business activity and real estate."

The Greiner-Maltz survey for the Brooklyn-Queens area reveals a similar pattern. According to Richard Maltz, who heads the Long Island City office, "The recent survey indicates a market that is essentially flat. However, after a period of steady increase in overall availabilities, the number of new listings is slowing down, more activity is taking place, and we hope to see the absorption rate start to improve."

One of the more interesting points to come out of the Brooklyn-Queens survey is the increase in the activity level of small units (under 20,000 square feet). Small business can react much more quickly to changing business conditions than large ones. The increase in this sector could be a positive sign for the overall economy. The bigger firms may be planning their moves, but are slower to respond.

One of the problems affecting the real estate business -- and the economy -- has been appraisal values. They are often quite inaccurate because they are based on earlier income streams and comparables. At this point any properties that are not gerating income are not worth what they were. According to Greiner, "some appraisals and rents are based on past glory, not present conditions." But both markets are now seeing evidence that reality is returning and that finally, sale and rental prices are coming down to levels that the market will bear.