PHOENIX—KC Conway, a Counselor of Real Estate with SunTrust Bank in Atlanta, told NAIOP Arizona members at a recent market leaders series there were signs that the Federal Reserve Board was not going to raise interest rates. Conway addressed the audience at the offices of Colliers International a day after the Fed cited risks from abroad and downward pressure on US inflation from a high dollar as reasons to stand pat.
“When the Fed is about to do something, it is so telegraphed,” Conway said. “(Federal Reserve chairman) Janet Yellen didn't attend a conference in Jackson Hole, WY. They usually get very vocal, but not this time around.”
Not even a volatile stock market, Conway said, could sway the Fed. He noted that during the recent, six-day period when the stock market began to plummet, market cap loss was estimated at $1.4 trillion. “You know what,” he said, “consumers are still doing OK. We seem to roll with the punches.”
The last time the Fed raised interest rates was in June 2006. Conway said the government is recreating all the bubbles of the past. But one area in which he says he sees strong yield is commercial real estate, which “is an attractive asset,” he said.
Tim Lawless, president of NAIOP Arizona, tells GlobeSt.com: "The fact that Moody's predicts that our region will be among the strongest performing metros in the US is my biggest take-away from the event and is under-reported great news for the economic health of our market."
Conway says when it comes to the government, it is too data dependent. Five economic indicators to which he subscribes are ADP job data, “They track 24 million actual payrolls;” rail- time indicators: “Everything that happens in North America moves from the ports via the rails inland and back and forth;” NAHB forecasts, “What did we learn from the housing crisis? That commercial real estate follows the rooftops;” the U-Haul index “shows who's moving and to where” and Kroll Bond Rating Agency “monitors what's happening with CMBS loans”.
Conway wrapped up his discussion with the latest report from Moody's Analytics.
“This is a favorable demographic,” Conway said. “Moody's predicts that the Phoenix-Mesa-Scottsdale area will prove to be one of the strongest large metro areas in the coming year. That's good for all of you.”
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
