War On Terrorism Hitting Real Estate

CHICAGO-One point of agreement between two economists at the National Association of Industrial and Office Properties conference here is that the US war against the nebulous as well as nefarious terrorist enemies will have effects on the nation’s economy, and in turn, the commercial real estate industry. Original assumptions on the scope and duration of the war are turning out to be less rosy than in the days after Sept. 11, add Northern Trust Co. economic consultant Robert G. Dederick and Brainworks Ventures CEO and Chairman Donald Ratajczak.

“In the end, what happens will depend on what happens in the war on terrorism,” says Dederick, who was a member of the Reagan administration. “There’s a war out there, and we don’t even know for sure who our enemy is…we don’t know how big it will be. George Bush said we’re going to eradicate evil in the world. That sounds like a big war to me.”

The economy would react positively if the assault on Afghanistan turned out to be similar to Grenada, Dederick explained, not so well if it turned into a prolonged stand-off similar in duration to the hostage situation that dogged Jimmy Carter’s final months in the White House. However, he and Ratajczak agree the current war already is somewhere in the middle.