recent GlobeSt.com reader survey poll on the question
“Sequestration: What is it Good For?”, 58% of the respondents
answered that the cuts have to happen—it is time. Twenty percent
said they were still trying to get their heads around the issue and
22% said it would be a mess for CRE.
The numbers are understandable, says Kurt Stout, executive
THE BIGGER ISSUE
vice president of government solutions at Colliers International.
“I think what you are seeing is a reflection of the economic prin-
ciples of the readership, which believes there needs to be a reduc-
tion in spending,” he explains. “I don’t believe that people think
sequestration as a method for reducing spending is good—I
think they view reducing spending in general is good.”
Also, the cuts will be felt disproportionately in the DC area, he
adds, which might also explain why 58% of the readers who
answered the survey were sanguine about sequestration. “Of
course it will have an impact wherever government contracts are
met, such as in Texas and California,” he says. “The DC area,
though, is clearly at the epicenter of that.”
One myth that needs to be debunked, Stout adds, is the per-
ception that sequestration will hurt the public sector more than
the private sector: The easiest way for the government to make
immediate cuts is to cancel or defer contracts, which are held by
private sector firms.”
Joel Ross, principal of Citadel Realty Advisors in New York City,
says the sequester is not the issue. Rather, the point for commer-
cial real estate is the uncertainty of where we go from here, the
attack on carried interest taxation, potential space reductions,
and other cuts to make everyone’s life miserable.
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