So what do you know -- Merrill Lynch has more mortgage writedowns and so do other financial giants waiting in the wings, continuing to dribble out more bad news. Opening the kimonos has been a slow process -- in part because their sliced and diced mortgage securities are so inscrutable. Banks are also coming to realize that waiting for a turn around isn't going to make things better, because real estate markets will not improve in the near term.
In doing my annual round of Emerging Trends interviews, I'm struck, although not surprised, by how many industry leaders focus on resolving the ongoing credit crisis as the key to putting the real estate markets back on track. No doubt the credit crisis triggered a sudden reversal in prospects, slammed the securitization business on its back, crippled dealmaking, and put many borrowers in a bind. But the credit crisis appears to me to be only act one. The quickly deteriorating condition of the American consumer is act two. Real estate fundamentals -- still reasonably strong -- are now directly in the cross hairs of evident recession. Everybody needs to shift at least some attention to what tenants start do and the outlook is for demand to decline across all sectors thanks to all the issues we've been reading about -- housing, energy, over borrowing. The curtain is going up now and this act promises to play out well into next year. If you jump ahead into the play notes, you'll see higher vacancies, declining revenues, and value hits will be a big part of the building drama. And meanwhile act one shows no signs of ending anytime soon either.
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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.
