Everybody is playing defense. That's what one real estate industry vet told me today in a conversation on the markets. Everybody is scared to go on offense since they not only can't figure out the complex, pretzel-like debt structures of old deals, but they also realize values have nowhere to go but down, and value declines have only just begun. So capital rich players hoard money waiting for greater clarity, and capital poor owners wait to get hammered on refinancing and debt restructuring. In the middle, banks and other lenders play for time hoping the economy improves enough so that their borrowers can find firmer footing to restructure. And hopes are about all anybody has when it comes to the economy.
Many observers have been pinning more positive outlooks on continuing strong US export activity. But other economies -- particularly in Europe -- may be flagging, following our lead rather than pulling us out of our skid. Certainly the UK has been troubled. Now Germany may be starting to stall. Spain and Italy have been in rough shape. The picture gets cloudy. The US consumer pullback also spells trouble for Asian countries which have been shipping all that stuff over here for us to buy. Will China hit a post Olympics malaise? Ya think?
Let's hope the air over there clears before the games begin. A chemicals exec just back from a tour in China tells me that they have imposed the toughest anti pollution regulations of any country. It's just the government is having trouble enforcing the laws, he says. Maybe that's because the government, its army, or relatives of of government bigwigs own all the factories.
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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.
