Commercial Real Estate Response to the State of the Union
Posted By Admin on February 9, 2012
By Joe Brennan
During his State of the Union Address, President Obama spoke of a significant loss of confidence in the federal governments ability to create meaningful policy. This lack of confidence has permeated into commercial real estate markets across the country. However, the President also outlined policy initiatives that he believes will restore both confidence in the government while jumpstarting the American economy. This vision, of a leaner government, may help restore confidence in CRE markets as well.
The Presidents State of the Union address highlighted trends toward a robust industrial America as he seeks to convince voters that his administration can facilitate domestic job growth. Building off of his speech in Kansas last month, the President alluded to each of the four pillars of his Blueprint for an America built to last:
1) American manufacturing;
2) American energy production;
3) the skilled American working class; and
4) American values (ie rewarding hardwork).
These trends, among others mentioned in the speech, could usher in a new wave of policy initiatives that will benefit both industrial and office markets across the country.
The Presidents tone was positive, yet with a hint of self-deprecation. He seemed to deeply understand that the American people are not happy with the status quo in Washington. He seemed confident in his priorities, but did not ram them down Congresss throat.
The Presidents repeated allusions to the military were interesting. It was almost as if he was using the military system as an analogy for his vision of a leaner government. This could have profound policy implications. The tone moving forward was not one of gridlock, it was very much one of moving A to B.
The President had multiple statements that could rouse bi-partisan support:
The application of money from the wars to our national debt and infrastructure.
The continued development of natural gas as an energy resource.
The redemption and continued success of the US auto-industry.
For all the perceived successes and failures of the State of the Union Address, little of it matters until we see the Presidents Budget. When it is released early-mid February, we will get a sense of what is potential and meaningful policy and if it will help to restore confidence in commercial real estate markets as well.
Joseph B. Brennan is a Corporate Regional Director of Jones Lang LaSalle. Joe serves as the Managing Director of the firms national Government Investor Services (GIS) practice, headquartered in Washington, DC.
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