On the Right Road, Destination Unknown

NEW YORK CITY-Six months after a “tentative sense of optimism” hung in the air as the Obama administration geared up, the commercial real estate industry is still waiting for clarity, said John Salustri, editorial director of Incisive Media’s real estate group. However, the experts Salustri reconvened on Tuesday for the third in GlobeSt.com’s series of semi-annual webinars on the state of the economy agreed that federal efforts to jump-start the economy are at least on the right track. For a replay of the webinar, click here.

“History will probably not rewrite what’s going on right now as a giant mistake,” commented Howard Roth, global and Americas real estate leader at Ernst & Young. Added Ed Friedman, senior economist at Moody’s Economy.com, “The Obama administration is telegraphing that we’re not headed down the road of complete and utter socialism.”

Nonetheless, Raymond Torto, chief economist with CB Richard Ellis, emphasized that federal initiatives and the normal mechanisms of the economic engine will take a long time to generate a recovery, and what that recovery will look like is a mystery. The jury is a long way from a verdict on whether the federal stimulus program will produce the intended effect, but Torto warned that we shouldn’t expect more stimulus funds should the current allocation prove insufficient. In the meantime, the fundamentals of both the general economy and commercial real estate still face further decline.