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Ned O'Hearn of Oncor Int'l

The old art of examining real estate cycles is gone; we have disengaged from the cycles theory.

By John Salustri | Updated on January 18, 2002

Ned O’Hearn doesn’t kid himself. The economy is showing some signs of improvement, but measuring rebounds is only in part a game of numbers. Mostly, he says, it is a game of trust, of confidence that the fiscal environment will support business expansion. It’s that feel-good outlook that pushes the business forward as much as the occupancy rate of any particular market. To that extent, he says, there’s a bit too much optimism this early in the cycle and a drive on the part of many forecasters to push the envelope a bit in their assessment of a rebound. As EVP of the Washington, DC-based Oncor International, O’Hearn has folded a heavy measure of that caution into the firm’s 2001 Year-End North American Office Market Report, released earlier this month. It’s a much more unpredictable market than ever before, he says. There are pressures beyond our control being placed on the industry–not the least of which is the justifiable case of nerves imposed by Sept. 11–that will throw potholes of various size into our road to recovery. The good news–as the report states–is that real estate practitioners have become more cognizant “of the swirling, unpredictable forces that contribute” to the chaos. Here’s how he sees 2002 shaping up.

GlobeSt.com: You mention in your report that there are unpredictable forces that affect the real estate market. That’s clear, but forces aside, the traditional six-month lag time between the economy and the industry gives us time to strategize, no?

O’Hearn: Not really. There used to be a six- or 12-month lag, but those time frames have shortened. The old art of examining real estate cycles so you could predict direction is gone, and we have disengaged from the cycles theory. The forces affecting the industry today are so complex and diverse, and the changes taking place are happening so rapidly that you simply can’t trust the cycles.

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