Magazine article Real Estate Issues

Editor's Note

Magazine article Real Estate Issues

Editor's Note

Article excerpt

The truth is the winter of 2011-2012 didn't amount to much. It was pretty mild, relatively dry, and, in some quarters, downright disappointing. At my little apartment in Washington, we had two mornings with just the slightest dusting of snow. February was among the warmest on record at both Reagan National and Dulles, according to the National Weather Service. In Colorado, my wife reported just a single blizzard at the old homestead (lucky for me, because I would have heard shoveling horror stories to be sure).


I am thinking that, perhaps, the weather serves as an apt metaphor for our lives and our businesses. Perhaps, things aren't as dismal, cold and barren as we had thought. Maybe that stupid bird, singing in the courtyard outside my little apartment all day and all night long for the past six weeks, has it right: The ice is melting. It has been for a while. We just haven't been paying attention. Or, perhaps we have just been afraid to think that things might be getting ... well, better.

So far, in 2012, the economy appears to be (ever so slowly) improving. Employment figures are on the mend. Consumer spending is stable. Housing markets, according to a number of analysts, have finally found a bottom. Stocks have had a wild, if largely upside, ride, hitting levels not seen since before the crisis.

Of course, there are hazards aplenty. And, there is still a heap of uncertainty out there. As of this writing, considerable turbulence continues in the EU, with future bailouts and austerity measures--even a whole currency--in some doubt. Tensions have increased across a large swath of the Mideast, and oil prices have responded with a volatile climb to some of the highest levels we have seen in late winter Dodd-Frank is still coming as new regulations slowly make their way onto the books in ways that will have sweeping implications across the financial and investment landscapes. Debt issues--personal, corporate and governmental--continue. Those distressed properties are still out there. And, of course, election-year antics in the U.S. have pushed political and policy agendas to and fro across this town and the rest of the country, as the Republicans seek a single voice behind which to rally and as the Democrats seek simply to be heard.

It does seem like years since we've been here. And, maybe that's why we're not fully confident about the strength or stability of the recovery. But, according to the Conference Boards Index of Consumer Confidence, while the Index dipped a tad in March, people feel marginally better about current conditions and slightly better about future conditions, including jobs and incomes. On the business side, Moody's Analytics reports that businesses are slightly more confident so far this year, while expressing some caution in hiring and investment. Maybe, we've just been beaten up with so much bad news that we refuse to see the smiles returning to the faces.

Real Estate Issues is pleased to offer a number of articles to ease our colleagues into spring, to stimulate the mind, to get the sap running, as it were.

While winter was a fairly mild affair across much of the country, my wife reports that it has been unusually windy in Colorado, with the month of March one of the driest but windiest on record there (she is learning to retrieve and stow susceptible outdoor items). Ironically, just as I heard that report from home, which is one of the hot spots for the wind energy industry, Barton DeLacy, CRE, submitted his article "Renewable Energy: Headwinds Ahead?," which focuses on the interrelationship of fuel power generation and real estate. DeLacy asserts that the relatively mature wind energy industry is in crisis mode in 2012, as government subsidies expire. Without those subsidies, he notes, large scale wind energy projects will no longer be feasible. He tells us "In the end, energy is a commodity whose availability and cost can dramatically affect facility location and overall economic growth. …

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