A Funny Thing Happened on the Way to Washington
No one expected we'd have a real estate guy as the new president.
Politics in Washington are one of the nation’s capital’s most revered sports. Hardly a day passes in town where some committee or member of the congress makes the news media or talk circuit, usually on a favored topic involving taxes, policy or current spending. What no one expected is that we’d have a real estate guy as the new president. Now, the Washington region and those of us in the suburbs are pretty much used to the four-year election cycle. Each time there is an election marauding hordes of committee members, congressional staffers and supporting personnel drift out of town to be replaced by a usually larger group of new employees, eager to take on their appointed roles as citizens of the public trust. Not surprisingly vacancy rates drop to new lows and rents soar to welcome the new arrivals with the hometown wisdom of expenses that reminds them they are now in the big city.
One of the more frequent questions that comes up in almost every discussion and industry event is what now and how will the new administration affect commercial real estate, especially with his reign beginning as realty mogul number 1. In attending industry events since the beginning of the year, the common viewpoint (wisdom of crowds’ pre-cocktail party) is that demographics are destiny and that all property sectors will continue to perform well. Now we’re in for some old-fashioned Capitol Hill negotiations on tax and revenue issues but otherwise small owners, larger owners and major corporate entities are still going to find a welcome reception to doing business the same way, slow growth, steady improvement and stability that will belie an undeniable optimism in the industry that demonstrates that the halls of power are firmly in the hands of the voters and not the elected congress members. If you listen closely when you’re in town, you might almost hear the soundtrack from Mr. Smith Goes to Washington and realize that just maybe this time it will be different. We have the mid-term elections coming soon and what happens next in White House policy will determine if the people decide the incumbent party will retain control or once again lobby to share power. Either way, commercial real estate will provide offices, apartments and even snack shops in shopping centers. And if the cocktail party index is any true indicator, then make mine a double.
The Accidental Economist is written with great respect and admiration for our readers by Jack Kern, long-time observer of the comings and goings in national politics and the research editor for Multi-housing News and Commercial Property Executive. Currently he enjoys lighter traffic in the Washington metro since many new political appointees haven’t arrived in town yet.