Some Industry Optimism over Bush Stimulus Package

WASHINGTON, DC-As lawmakers debate whether President George W. Bush’s economic plan–which he officially introduced this week–is going to stimulate the economy in the short-term, some in the real estate industry are crossing their fingers in hopes that the plan will give the commercial sector a much-needed boost. James F. Smith, Chief Economist of the Society of Industrial and Office Realtors, talks to GlobeSt.com about how the president’s $674 billion package of long-term tax cuts could impact the real estate industry. (For other reactions, see sidebar .)

“Basically, if it does what it’s supposed to do, which is increase the pace of economic growth, then obviously that will be very favorable to all of the US economy, including the commercial real estate industry,” Smith asserts. “Commercial real estate in general has been hurt by the continuing decline in investment spending over five quarters now, not including the quarter ending December 31, 2002.” While some areas, such as the Metropolitan Washington region, have managed to weather the current economic conditions, most markets have seen great increases in the amount of available leasable office and industrial space. “Dropping those vacancies has to happen first, but anything that speeds up the rate of economic growth should result in growing employment. And that results in more people in more offices, and then folks need more space. So it’s definitely a positive.”