Despite what you've read here in the trends department, I'm really a pretty positive guy. For example, 15 years ago when nobody else believed it, I predicted New York and other major cities would mount a major come back.
I'm trying to find a silver lining for 2008, but I'm struggling. The housing numbers get worse, and Christmas retail was less than jolly, a particularly ominous sign since our economy is nearly 70% consumer driven. Many Americans are simply tapped out and the government sinks deeper into the red. Fallout from the credit crisis will crunch Wall Street volumes and transaction activity in coming months. States and cities tighten their belts and prepare to cut back spending. The nation's unemployment rate has nowhere to go but up (and update--on 1/4 it did to 5%) . Recession here we come.
The good news for commercial real estate is that the industry has only two strikes against it -- overleveraging and overpaying. Unlike housing, most markets are not overdeveloped -- excepting Florida condos and Las Vegas everything. Plenty of money has been warehoused by institutional and foreign investors to swoop in and prop up markets from swooning too far. But some repricing can't be avoided and expect baleful headlines to trumpet various blow-ups. Bad press will inevitably turn some investors more skittish -- especially pension funds.
The world scene, meanwhile, remains inescapably problematic. The potential grows for unwelcome exogenous shocks. The entire Middle East is a tinderbox. Al Qaeda central operates unfettered in nuclear Pakistan, which is a disaster waiting to happen, and Iraq is a remorseless pit. And we're worried about Iran?
My resolution for 2008 is to become more upbeat... I'm trying. I'm trying.
© Miller Ryan LLC 2007
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Jonathan D. Miller
A marketing communication strategist who turned to real estate analysis, Jonathan D. Miller is a foremost interpreter of 21st citistate futures – cities and suburbs alike – seen through the lens of lifestyles and market realities. For more than 20 years (1992-2013), Miller authored Emerging Trends in Real Estate, the leading commercial real estate industry outlook report, published annually by PricewaterhouseCoopers and the Urban Land Institute (ULI). He has lectures frequently on trends in real estate, including the future of America's major 24-hour urban centers and sprawling suburbs. He also has been author of ULI’s annual forecasts on infrastructure and its What’s Next? series of forecasts. On a weekly basis, he writes the Trendczar blog for GlobeStreet.com, the real estate news website. Outside his published forecasting work, Miller is a prominent communications/institutional investor-marketing strategist and partner in Miller Ryan LLC, helping corporate clients develop and execute branding and communications programs. He led the re-branding of GMAC Commercial Mortgage to Capmark Financial Group Inc. and he was part of the management team that helped build Equitable Real Estate Investment Management, Inc. (subsequently Lend Lease Real Estate Investments, Inc.) into the leading real estate advisor to pension funds and other real institutional investors. He joined the Equitable Life Assurance Society of the U.S. in 1981, moving to Equitable Real Estate in 1984 as head of Corporate/Marketing Communications. In the 1980's he managed relations for several of the country's most prominent real estate developments including New York's Trump Tower and the Equitable Center. Earlier in his career, Miller was a reporter for Gannett Newspapers. He is a member of the Citistates Group and a board member of NYC Outward Bound Schools and the Center for Employment Opportunities.
