CHICAGO—Despite the growing doubt over the European economic situation, a stateside jobs picture that only creeps ahead and a reported overall lack of confidence about the strength of the recovery, there is some good news emanating from Chicago this week. That’s where the Society of Industrial and Office Realtors is holding its annual Fall World Conference, with some 800 members in attendance.
That alone, reports outgoing president David Zimmer (Zimmer Real Estate Services), who tells GlobeSt.com that the turnout is the highest in a couple of years, an indirect indication that the worst of the economic storm is over. Zimmer handed over the president’s gavel this week to Geoffrey E. Kreusser (Colliers International).
GlobeSt.com content director John Salustri, in his keynote address, noted that the global crisis is largely one of confidence, and that while the international economic picture may be glum, stateside CRE is relatively bright, and our country’s safe-harbor status for foreign investors still strong. “Jobs remain a problem,” Salustri noted, “which means that leasing in many markets remains a problem, which in turn means that valuations may not be robust. But there isn’t much risk of any more widespread devaluations.
“We have virtually no new supply,” he continued, “and of the spotty development that is occurring, little is spec. Put that together with low interest rates and a depreciated dollar and there’s a compelling argument for foreign investment into the US.”
Salustri’s optimism was underscored in a presentation by William Strauss, senior economist for the Chicago Federal Reserve, who focused on the strength of our manufacturing output. He noted that production “peaked in 2007 and dropped 20% in the next 18 months.” He also noted that since the second World War, manufacturing labor has steadily declined by 3.1% per year.
No good news there so far, but Strauss quickly added that while jobs haven’t returned—and are unlikely to—since 2009 the US has recouped more than 50% of the output lost.
“How is that possible?” he asked the crowd. “We’re doing more with less. What took 1000 workers in 1950 can be done today with 177.”
But the implications there are for re-engineering our skills. Jim Reeb of the Institute of St. Onge, in his presentation noted that brokers need to do just that. If healthcare and consumer staples are the growth markets, why aren’t brokers focused more on providing space for those hot-ticket sectors? “The riches are in the niches,” he noted. “As Wayne Gretzky said, ‘Skate to where the puck is going to be, not to where it is.’ “
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