Obviously today's poor employment numbers foreshadow more bad news for the economy and real estate. Months of steady jobs erosion inexorably lead to reduced demand for office, deeper consumer gloom and reduced shopping center sales, less goods shipped through warehouses and distribution centers, slackening travel and hotel bookings, and more problems for the housing market -- fewer people can afford homes even at lowered pricing. Separate from the crisis in financial institutions, until we see jobs and wage growth again, the real estate markets will continue to deteriorate. The one-two punch of gridlocked lending and a stuck-in-the-rut economy set the stage for a very difficult 12-18 months, highlighted by value declines and reduced net operating incomes. Borrowers eating into reserves have more reason to despair. Bankers balance sheets show more red ink. And buyers find more resolve in waiting for what may be a deeper cyclical bottom. The stock market continues to take its lumps. Anyone still think commercial real estate can escape a correction?
I found the Republican Convention fascinating as always. Up until Senator McCain's acceptance speech all the speakers were pounding on "liberals" and "elites." Sen. McCain then takes the stage and claims he wants to bring everyone together for the good of the country. "It doesn't matter who gets the credit," he said. Now we know his political team either wrote or cleared all the earlier speeches, which were laced with similar hyperbolic rhetoric, the very same applause lines that Mr. McCain later decried as "poisonous." Also for all the talk about Sen. Obama's lack of executive experience, nobody, including Gov. Palin, seems to be mentioning that McCain has absolutely none either.
As for Obama -- he tries to prove his mettle by going toe to toe with Bill O'Reilly on Fox. Is that comparable to spending five years in the Hanoi Hilton?
Fascinating indeed.
Also, I didn't hear either candidate at the conventions talk about how to rein in the bad lending practices that led to the credit crisis or rebuilding the country's infrastructure. But as always there was plenty of red, white and blue.
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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.
