PricewaterhouseCoopers and the Urban Land Institute have just released Emerging Trends in Real Estate: 2009, which I have the privilege of authoring. This is the 16th edition of Emerging Trends I have written and now I feel like have gone through an entire real estate cycle -- and a long one at that. In 1993 when I started writing these annual forecasts my colleagues at Equitable Real Estate kidded me for writing about "submerging trends." We all were coming out of what amounted to the roughest period ever experienced for commercial real estate since the Depression -- a combination of overbuilding and recessionary demand sent values plummeting and created monumental dislocation for our clients. In fact, our insurance company parent almost went under, rescued by a sweetheart deal for the French insurer AXA. They bought one of the nation's largest insurers for about $1 billion. Sounds a little bit familiar.

Well today, commercial real estate isn't leading the charge into economic crisis -- this time it was housing. But now commercial real estate sectors are following the crowd over the cliff after the stock and bond markets with the recession providing an extra big shove. In Emerging Trends, the consensus of our survey respondents is that value writedowns off 2007 peaks will average 15-20%, hopefully less for trophy properties in the best markets, but likely much more for lower quality properties, especially in secondary and tertiary markets. And total NCREIF-core real estate returns will be well into negative territory next year.

After meeting with some of my neighbors last night, the discussion turned particularly gloomy. It was a well-heeled group -- whiteshoe lawyers, a couple of investment bankers. They talked about hedge funds collapsing and looking to sublease space, insurance companies tanking next, telling their grown up kids to expect a less generous Christmas time...

If anything our ET forecast may be a bit too cheery. Let's hope not.

If you want a copy of Emerging Trends contact ULI or PWC. See you next week at the ULI Miami Convention where Steve Blank of ULI and I will be presenting the report's outlook. I'm heading out right now to do an NPR interview on the "On Point" program, syndicated nationally. Unfortunately, bad news peaks everybody's interest.

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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.