After a six day swing from New York through London and Paris, here are some disparate observations and takeaways:
Rail and subway links within and between major Euro capitals and their airports put major U.S. cities to shame. We continue to fall further behind in our ability to move people and goods around and between our congested metros, and that spells long-term issues for real estate markets. Earlier this week, a French company just introduced the prototype for a train that will travel at 225 miles an hour. America does not have tracks or dedicated rail lines to accommodate high speed trains. Amtrak's so-called Acela Express in the Northeast corridor can run for spurts over 100 mph, but that's all.
London congestion pricing seems to work. Traffic appears more manageable in the center city. On Monday, truckers began getting charged £200 a visit into the congestion zone, if their rigs don't meet pollution requirements. Most locals accept the schemes. And the revenues go to mass transit and road repairs.
Privatizing London rail and subways leads to fares double or triple those in U.S. cities. Roundtrip tube rides cost nearly $12, compared to $4 in New York. A one way off-peak train ticket to suburban Milton Keynes cost $20. But the convenience and connectivity keep ridership up.
With congestion pricing a coming attraction to New York and probably other U.S. cities with mass transportation alternatives, expect travel costs to increase dramatically here to pay for all the new roads and mass transit we will need in the years to come. London is a leading indicator. The Brits reluctantly accept they must pay. At some point we will too.
Euro real estate attendees at the Urban Land Institute conference in Paris show growing apprehension over economic prospects. In a show of hands -- about half expect a mild downturn, the other 50% anticipate a deeper recession. All eyes focus on U.S. prospects both economic and for the November election. Everybody you talk to wants to see a "change" in direction.
London and Paris like New York are chock full of luxury retail, and no shortage of shoppers. It looked like December 23rd on the ground floor at the flagship Galeries Lafayette department store near the Paris Opera on Tuesday afternoon. Harrods in London was packed too on Saturday morning. Meanwhile, the real estate markets seem to be headed south in London --talk of values dropping 10-20%, and commercial real estate companies listed on FTSE take their lumps.
© Miller Ryan LLC 2008
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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.
