Keeping your powder dry? Good idea, because it will be some time before the commercial real estate markets settle into a bottom. You'll probably be waiting well into next year or even later depending on how long it takes for the economy to regear. And for all the happy talk around the stock market, it's much more appropriate for real estate investors to watch employment numbers, which will continue to track down for months to come.
So where do you put your money? Bank stocks still seem like a dicey proposition--the financial institutions have done nothing yet to address their toxic portfolios, require bailout bucks to cushion themselves, and will deal with more losses from credit card problems and, oh yeah, commercial real estate debacles.
Tech stocks are a possibility, but it may be some time before companies and consumers get in a spending mood again.
Corporate bonds look reasonable--they provide excellent coupons, unless you think everything will tank and then it almost doesn't matter where you have your money.
The doomsday scenario players look to gold and precious metals. Things are bad, but not that bad.
Oil and energy stocks make the most sense to me. Oil prices are heading back up. Sub $2 gasoline can't be sustained. For all the talk of energy independence and alternative fuels, it will be years before new technologies make a dent in our energy and driving appetites. All we need is some incident in the the Middle East to send prices skyrocketing. The odds for that happening in the next couple of years (unfortunately) are as good as the Yankees or Red Sox making the baseball playoffs this year. And once the world economies get untracked oil demand will push up prices more.
Black gold, Texas tea--Jed Clampett scored. Oil and energy stocks beat real estate and just about anything else right now.
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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.
