"The next six months are going to be critical. For the first time inflation is rearing its ugly head, the Fed is caught between stimulating the economy to avoid recession and keeping inflation in check and I don't know which way they're going to go. The dollar is obviously in a nosedive, which helps us in terms of exports but hurts us in terms of imports. The imports are going to add to the CPI. On the other hand, manufacturing might be stimulated somewhat. It did not appear to recently, but where the dollar hits is a huge issue. It makes American companies vulnerable to foreign takeovers. It makes American real estate very cheap for foreigners to buy, but it also may mean that certain foreign companies that have been investing heavily in American real estate might decide that they want to go elsewhere because they're not certain of the stability of the dollar, which was heretofore a safe haven.

"In the recession that came in the early '90s, New Jersey got clobbered because retail sales plummeted. When that happened, there was job shrinkage. We went from 3.7% unemployment in '87 to 9.6% in '91. You saw most buildings lose 25% to 40% of their value. The industrial market went from 40 million sf of vacant space to 120. In the last recession in 2001, retail sales and homebuilding held up, and as a result, there was virtually no diminishing in office and industrial values and virtually no increases in vacancy. So, the question is, if we have a downturn in the first or second quarter, is it going to be a George I or George II situation? The key going forward is job growth and retail sales. If retail sales hold up we'll do well as a state."