First half 2016 has been smooth, gradual and mixed. Macro measurements are helpful in defining market context. For commercial real estate, inventory snapshots and trends describe a micro market context for planning, development and investment. The Counselors of Real Estate meet in Washington, D.C. September 26-28, to rehash the 2016 data and identify the risks for the second half and beyond. Halfway there is a relative term! The counselors’ symposium on Global Communities in an Era of Change at Stanford University in April was a target full of bulls-eyes. In just a few months the forecasts and commentaries were part of history and reality. The headliners in the counselors’ Washington annual meeting will be Mark Zandi of Moody’s and New York developer Dan Rose CRE. Both have a demonstrated renaissance quality to their thinking and commentary which often moves outside the box or context, very sharp on real estate and the global economy. The conversation will be full and challenging.
The July jobs report released August 5, was broadly positive. Nonfarm payrolls bumped upward 255,000, significantly above consensus July forecast of 180,000. Even with positive net upward revision of 18,000 jobs and a six-month moving average monthly gain of 189,000 jobs, some skeptics are saying not so fast. The labor force is expanding and causing the national unemployment rate to remain at 4.9% for July, and participation rate and average hourly pay rate are bumping up. All a very positive context for the national economy. Zandi and Moody’s have an established reputation for slicing and dicing the context, relating the data to commercial real estate for the counselors and others and reconciling both with a credible outlook.
Cycles are often delegated to Q and A and sidebars at large meetings. The counselors have a particular curiosity about cycles (economic, capital and property) because commercial real estate investment performance is so tied to cyclical forces. With attendees generally familiar with current macro and micro economic data and trends, two panels which precede Zandi will focus on cycles in Washington. Economists seem to have a tendency to avoid cycles. Commercial real estate professionals cannot afford to do so.
Migration and immigration will also be on the agenda in Washington. Global terrorism and catastrophes will necessarily be discussed. The Presidential election campaign and the candidates are not.
Go Rio. The Olympic Games open August 5 in Rio Janeiro, Brazil. Heroes and inspiration go global. Go Rio!
David Kirk, CRE, MAI, FRICS, is principal and founder of Kirk & Company, Real Estate Counselors, Boston.