Editor’s Page
Cynthia J. Hoffman
Economy in Crisis Mode
MOVING INTO THE SECOND HALF OF THE YEAR, THE
economic situation is getting downright ugly. Just when you
thought the troubles in the financial sector couldn’t get any
worse, mortgage giants Fannie Mae and Freddie Mac, which
together hold or guarantee some $5 trillion in mortgages or
nearly half of all outstanding loans, needed a federal bailout
after posting significant losses. Couple that with news of the
collapse of IndyMac, and it only makes fears of widespread
bank failures seem all the more real.
As Fed chairman Ben Bernake noted in his rather grim
midyear report on the economy, inflation is a mounting problem.
The US Department of Labor announced that wholesale prices
increased 9.2% over the 12 months ending in June, marking
the biggest increase since 1981. Consumers are seeing their
home values weaken while faced with the prospect of job losses and rising food and energy prices. A gallon of milk now costs
the same as a gallon of gas, and the stimulus checks have
come and gone.
In a slow growth environment, it’s no wonder that leasing and
investment sales activity in the nation’s office markets is on the
decline. Although some areas are still posting single-digit vacancies, commitment-shy tenants and flush development pipelines
are sure to send those rates higher. Yet at this point, the industry experts aren’t predicting widespread gloom and doom. This
month’s cover story, written by a team of Real Estate Media
journalists, looks at how some of the largest office markets in
the US are faring at midyear and what to expect in the quarters
ahead.
On a personal note, we at Real Estate Media were saddened
by the recent death of Cushman & Wakefield media relations
director Terry Spillane. In an industry where sharks and gunslingers seem to be the norm, Terry was a true gentleman. A
former journalist himself, he understood what it meant to be on
deadline and was quick to offer plaudits for a job well done. He
will be sorely missed.
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