I was speaking with a client on the phone the other day in regard to his office building that I provide leasing services for. He was lamenting over the fact that he wasnbt able to project occupancy in the coming quarters for his properties. bI used to be good at forecasting, Ken, now I donbt knowb&b

I chuckled at his statement and responded that I thought for the time being forecasting was a dead concept. Oh, we can make all the predictions we want, I told him, but based on what metrics? I also told him that I believed we had entered into a time of unprecedented uncertainty, and that the old norms had either bfaded away,b or, more accurately, blasted to smithereens. Even the government has caught on to this idea.

Chairman of the Federal Reserve Ben Bernanke has even testified before Congress this past week that the economy was unusually shrouded in mystery.

After my phone call concluded with my client I sat down and made a list of events or situations in the U.S. and abroad that are providing significant destabilizing influences:

1. High unemployment in the U.S.
2. A continued weak banking sector at home and abroad
3. The globalization of all financial markets—the global stock markets are no longer tied to their respective national economies
4. The European sovereign debt crisis and the war of ideology between austerity measures and economic stimulus
5. A record high U.S. budget deficit and the absorption of GDP it consumes to support it
6. The impact of technology automation on the workplace and its effect on the labor markets
7. Environmental disaster in the Gulf of Mexico (GOM) and its effect on the fisheries, tourism and energy sectors in the GOM area

Taking into account my clientbs interest in seeing his office properties fully leased, I believe the issue is what will stimulate employment growth? There needs to be some specific reason for U.S. employers to begin hiring. Only then will vacancy rates begin to decline. The overall effect on technological automation has acted and will continue to act as a limiting factor to hiring. If software can enable one worker to do the job of three (in certain industries), that certainly will hurt future employment growth.

In truth, I could list several more pages of destabilizing factors that are affecting the U.S. economy and its impact on commercial real estate. I predict that we have entered an age of extreme uncertainty. We have found ourselves stuck in a commonly quoted curse attributed to the ancient Chinese—bMay you live in interesting times.b I think webve definitely arrivedb&

—Ken Morris


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