Economic conditions are going to be tougher for awhile before they improve, and the nation may even stagnate along the bottom, akin to Japan\u2019s last recession, according to the discussion between two economists that opened CPN\u2019s Net Lease Summit yesterday. But some benefits will come out of it, according to Craig Thomas, vice president and head of research at Citi Property Investors, and David Wyss, chief economist at Standard & Poor\u2019s Corp., during the Economic Face-Off, which was moderated by Matthew Bruck, managing director of the Royal Institute of Chartered Surveyors Americas\u00a0 and partner in McDuff Capital. The pain is likely to be felt most by the investment banks, as they transition to more of a European model, with the investment bank part of a commercial bank\u2014\u201ca wonderful place to put your money but not very exciting,\u201d noted Thomas. Regulation, however, was inevitable, added Wyss, while Thomas termed longstanding companies like the century-old investment banks that will cease to exist as independent entities \u201cnot majestic.\u201d He explained, \u201cThere is a creative destruction that takes place. (As long as the talent remains) it doesn\u2019t matter what sign is on the door.\u201dBeyond that, the future is somewhat muddied by the upcoming election, Wyss added, since whoever wins will determine how the scenario further plays out. But Thomas cautioned that things seem far worse in New York City, home to Wall Street, than elsewhere in the country. \u201cIn New York, the world just ended,\u201d he commented. \u201cIn Kansas City, they\u2019re wondering what\u2019s going on.\u201d For the commercial real estate sector, prospects are mixed, although ultimately not dire. On the one hand, noted Wyss, with a recession under way, companies don\u2019t need more office space, they overbuilt retail and high gas prices will deter travel to hotels. \u201cSo even without the financial problems we would\u2019ve had a dropoff in real estate.\u201d But, added Thomas, the harder-hit cities are those that emphasized growth through secondary-home investment, whereas cities like San Francisco, Boston and even New York have been less hurt by market fundamentals. In New York, Wyss noted, Mayor Michael Bloomberg was relatively calm in discussing the Wall Street situation over the weekend. \u201cNew York has held on remarkably well thus far,\u201d Thomas added. Wyss predicted New York will remain as one of three financial capitals worldwide\u2014also including Singapore and London\u2014and both economists lauded the weak dollar as likely to keep attracting foreign tourists. They also noted that many of the layoffs that have occurred nationwide have been related to the housing crisis\u2014now entering its third year and so no longer new\u2014and lauded federal efforts being made to address homeowners\u2019 difficulties. And for real estate players, their advice was encouraging: \u201cWe\u2019ll get through this,\u201d Wyss said. \u201cIt is a recession … but not anywhere close to the problems we had back in \u201991, \u201992.\u201d And although the economy will remain at the bottom for awhile, \u201cthe bottom is not that deep,\u201d he said, noting that the real problem is, after all, financing and not the real estate.<\/p>\n","protected":false},"excerpt":{"rendered":"
Economic conditions are going to be tougher for awhile before they improve, and the nation may even stagnate along the bottom, akin to Japan\u2019s last recession, according to the discussion between two economists that opened CPN\u2019s Net Lease Summit yesterday. But some benefits will come out of it, according to Craig Thomas, vice president and…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21825],"tags":[],"class_list":["post-1003853554","post","type-post","status-publish","format-standard","hentry","category-finance"],"acf":[],"yoast_head":"\n