On January 22nd the The Miami-Dade CCIM Chapter held its annual Commercial Real Estate Outlook Conference at the Coral Gables County Club. Approximately 300 Realtors, bankers, attorneys and allied trades attended.
Economist Dr. Sean Snaith was the keynote speaker. He is the director of the University of Central Florida’s Institute for Economic Competitiveness and a nationally recognized economist in the field of business and economic forecasting.
Dr. Snaith gave a comprehensive overview of current economic conditions beginning with the challenges due to the "weakest recovery in four plus years" and moving into a fifth year of economic uncertainty.
He began his speech explaining the definition of uncertainty, and the three factors factoring into the uncertainty index. They are: newspaper clippings, the number of Federal tax credits to expire and disagreement between and among economic forecasters.
Higher uncertainty means lower private investment, industrial production and employment. In spite of this, the economy continues to unfold and it "continues to accelerate", although he said "it will not be a rocket taking off."
Topics covered were employment, US forecasts, GDP, home equity, housing and a sector-by-sector analysis. Leading the economy in new jobs will be the construction industry, he said. Regarding unemployment, Dr. Snaith explained that "the government does not count people as unemployed unless they are looking for work" and do not factor into the index.
Regarding GDP and inflation Dr. Snaith mentioned in his forecast the "take away the punch-bowl just when the party gets going" theory of controlling inflation with higher interest rates, a reference to a 1965 quote by Fed Cheif William Martin who raised interest rates to stave off inflation.
Additional presenters were:
- Edward J. Redlich, SIOR, CCIM of ComReal Miami, Inc. Industrial Markets
- Minday Mcllory, VP Terranova Corp. - Retail Market
- Alex Zylberglait, VP Marcus & Millichap - Investments
- Marty Busekrus, CCIM, Director HFF, LP - Capital Markets
- Jack Lowell, VP, Flagler Real Estate Services, Inc. - Office Market
- Tom Hudson, VP with WLRN - "Sunshine Economy"
Mr. Redlich, Past President of the local Miami CCIM Chapter and President of the Miami Association of Realtors (MAR) Realtor's Commercial Alliance (RCA) compared the 2012 vs. 2013 industrial markets pointing out that industrial lease rates increased from an average of $7.54 to $8.25 per square foot on an "industrial gross" basis. Vacancy, he said, lowered from 6.7% to 6.3%. Redlich forecasts that the vacancy to drop to as low as 5% due to the strong demand for industrial properties.
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