“Serving The Corporate Real Estate Community Since 1932”
Market Sound Bites
March 2013
An Educated Population Is Critical
Commercial Real Estate Forecast Update: 2013-2014
Business Spending Improves as U.S. Profits Grow: Economy
Stocks Waver, Dow Hits New All-Time High (Again)
Stress Tests Seen Boosting U.S. Bank Shareholder Payouts
The Blau & Berg Company
@BlauBergCompany
The Blau & Berg Company
140 Mountain Avenue, Suite 204, Springfield, NJ 07081 | Phone: 973-379-6644 | Fax: 973-379-1616 | www.blauberg.com
The information contained herein has been obtained from sources considered to be reliable, but no guarantee of its accuracy is made by this company. In addition, no representation is made respecting zoning, condition of title, dimensions, or any matters of a legal or environmental nature. Such matters should be referred to legal counsel for
determination. Subject to errors and omissions. The information contained in this document is proprietary to The Blau & Berg Company.
MARKET SOUND BITES
March 2013
“The Blau & Berg Company has been committed to its clients’
success since 1932; creating corporate real estate solutions through
professionalism, integrity, market knowledge and cutting-edge technology”
An Educated Population Is Critical
The Blau & Berg Company
Kenneth F. Crimmins, CCIM, SIOR
President & CEO
Sequestration. More than a trillion dollars of cuts in spending by the US Government over the next 10 years. For the last 4 years,
we have never worked harder to stay above water; nonetheless, each year is getting slightly better than the last. Up to now since
2008, markets have been steadily increasing both in commercial and residential real estate. Most small to medium size companies
are experiencing similar situations, while larger companies seem to be experiencing greater profits and accumulating cash. There
are fewer players as well as larger companies seem to be buying up their competition. Of course, eliminating competition should make for even
greater profits for those companies. With a reduction in government spending, government employees and firms that have government contracts will
experience layoffs. The indirect impact of sequestration will trickle down to retail, lodging, and other property sectors.
A cut across the board is not planning. It is just being inept. Despite our government’s ineptness, I am concerned about the sequestered budget cuts
especially in education as they are arbitrary cuts and not well thought out. Regardless of program demand or effectiveness, they represent a poor,
short-sighted policy. In order to stay relevant and competitive, we, as a country, have to make sacrifices. Not by indiscriminate cutting across the
board, but instead by allocating these cuts intelligently and adjusting spending more efficiently. Some of these cuts will negatively impact many of
us. Companies are now competing on a world stage, not only against other companies, but also against quasi- and State-owned entities that can
subsidize these larger companies with State monies while curtailing competition. If the US is to attract businesses, it will be driven by where skilled
workers can support their products. To bring jobs back to the US, for example, new methods of automation using the logistical cost and time savings
that would occur if products were manufactured in the US, as well as capitalizing on a higher educated work force having the ability to apply
advanced technology, productivity and efficiency, we would reduce unit costs significantly.
140 Mountain Avenue, Suite 204, Springfield, NJ 07081 | Phone: 973-379-6644 | Fax: 973-379-1616 | www.blauberg.com
The information contained herein has been obtained from sources considered to be reliable, but no guarantee of its accuracy is made by this company. In addition, no representation is made respecting zoning, condition of title, dimensions, or any matters of a legal or environmental nature. Such matters should be referred to legal counsel for
determination. Subject to errors and omissions. The information contained in this document is proprietary to The Blau & Berg Company.
MARKET SOUND BITES
March 2013
“The Blau & Berg Company has been committed to its clients’
success since 1932; creating corporate real estate solutions through
professionalism, integrity, market knowledge and cutting-edge technology”
An Educated Population Is Critical
The Blau & Berg Company
Kenneth F. Crimmins, CCIM, SIOR
President & CEO
The workplace of the foreseeable future, say in 10 years’ time, will probably be very, very different. For example, the transition
from fossil fuels to alternative energy will be in full swing. Rapid development in China, India and elsewhere will place a huge
strain on resources. Alternative fuels – solar, wind, tidal, hydrogen – are going to be huge, although renewables might also see an
influx of workers from the disappearing oil and gas industries. Nuclear too, will return, although there may be a shortage of uranium.
The next decade may see the return of manufacturing, identifying niche sectors that are highly skilled and knowledge-intensive. The techie
generation will be middle-aged, and virtual services will be the basis for many jobs. With search engines already anticipating what we want before
we ask, artificial intelligence will change, eliminate and transform many jobs by 2020. "We've just seen the NHS unveil a system that can predict the
probability of a patient developing cancer," says Ian Pearson, a futurist. "Robots will take over the high-precision, high-value surgery, leaving
surgeons redundant."
There will still be real jobs available, but you may have to switch careers to find one. This could be the decade we witness an explosion of
technological advances in nanotechnology, biotechnology, information technology and cognitive science, collectively known as NBIC. As these
fields expand and converge, opportunities will arise to reprogram our bodies' "software," extending life, reducing deaths and alleviating poverty. As
indicated by Ian Wylie, there may be job titles such as “Hydrogen Fuel Station Manager; Uranium Recycler; Personal Robotic Mechanic; Powered
Exoskeleton Engineer, designers of wearable robots that protect soldiers and construction and rescue workers; Traceability Manager, examines global
supply chains; Cloud Controller, buys the planet time – maybe 25 years – in the fight against climate change, by increasing the ability of clouds to
reflect solar radiation; Digital Architect, designs a range of virtual buildings for advertisers to market their products and services; Avatar DesignSecurity Consultant, designs, creates and protects the virtual you; Mechatronical Engineer, who combine mechanical engineering, electronics, control
engineering and computers into the product design process; and Metal Skin Consultant, manufactures self-healing composite materials for use on
aircraft, ships and spacecraft.”
140 Mountain Avenue, Suite 204, Springfield, NJ 07081 | Phone: 973-379-6644 | Fax: 973-379-1616 | www.blauberg.com
The information contained herein has been obtained from sources considered to be reliable, but no guarantee of its accuracy is made by this company. In addition, no representation is made respecting zoning, condition of title, dimensions, or any matters of a legal or environmental nature. Such matters should be referred to legal counsel for
determination. Subject to errors and omissions. The information contained in this document is proprietary to The Blau & Berg Company.
MARKET SOUND BITES
March 2013
“The Blau & Berg Company has been committed to its clients’
success since 1932; creating corporate real estate solutions through
professionalism, integrity, market knowledge and cutting-edge technology”
An Educated Population Is Critical
The Blau & Berg Company
Kenneth F. Crimmins, CCIM, SIOR
President & CEO
So, what better time to figure out which sectors, industries and jobs are destined for growth. Schools, universities and private
providers are expanding to keep pace with the accelerating need to train and retrain. Educating our work force is critical and needs
a larger allocation of funds rather than a reduction of funding. Congress and the administration should identify and execute a
balanced approach to deficit reduction that will not cripple the nation's schools. Under sequestration, education funding will be
subject to cuts ranging from 9.1% (in 2013) to 5.5% (in 2021) according to the Center on Budget & Policy Priorities. The reduction in FY 2013
would be $4.1 billion.
An educated population will continue to be critical for tomorrow's jobs. Congress and the president must tackle today's problems and make cuts
where cuts need to be made, but also spend wisely, and create employment which will create more revenue.
This last financial crisis was the worst crisis I have experienced in my 42 years in the real estate business. A certain job killer is another recession.
What scares me is to think that another recession is not out of the question in the upcoming months if we do not continue to add jobs and at the very
least to spend the money needed on our infrastructure and education. The simple fact is that jobs create jobs and create a strong economy.
Sequestration will affect our markets here in New Jersey and put us closer to a possible recession.
140 Mountain Avenue, Suite 204, Springfield, NJ 07081 | Phone: 973-379-6644 | Fax: 973-379-1616 | www.blauberg.com
The information contained herein has been obtained from sources considered to be reliable, but no guarantee of its accuracy is made by this company. In addition, no representation is made respecting zoning, condition of title, dimensions, or any matters of a legal or environmental nature. Such matters should be referred to legal counsel for
determination. Subject to errors and omissions. The information contained in this document is proprietary to The Blau & Berg Company.
MARKET SOUND BITES
March 2013
“The Blau & Berg Company has been committed to its clients’
success since 1932; creating corporate real estate solutions through
professionalism, integrity, market knowledge and cutting-edge technology”
Commercial Real Estate Forecast Update: 2013-2014
Forbes
Bill Conerly, Contributor
February 21, 2013
Commercial real estate continues to improve at a moderate pace, much in line with our previous
forecast update from six months ago.
The office market enjoyed “11 consecutive quarters of occupancy growth and eight straight
quarters of rent increases,” according to the Jones Lang LaSalle firm. The length of the expansion
is more noticeable than the strength of the expansion. REIS Inc. reported national figures for office
vacancy that are only slightly lower than a year ago.
Full Story
140 Mountain Avenue, Suite 204, Springfield, NJ 07081 | Phone: 973-379-6644 | Fax: 973-379-1616 | www.blauberg.com
The information contained herein has been obtained from sources considered to be reliable, but no guarantee of its accuracy is made by this company. In addition, no representation is made respecting zoning, condition of title, dimensions, or any matters of a legal or environmental nature. Such matters should be referred to legal counsel for
determination. Subject to errors and omissions. The information contained in this document is proprietary to The Blau & Berg Company.
MARKET SOUND BITES
March 2013
“The Blau & Berg Company has been committed to its clients’
success since 1932; creating corporate real estate solutions through
professionalism, integrity, market knowledge and cutting-edge technology”
Business Spending Improves as U.S. Profits Grow: Economy
Bloomberg
Michelle Jamrisko
March 6, 2013
The outlook for U.S. business spending is improving as rising earnings, easier credit and pent-up demand prompt companies from Warren Buffett’s
Berkshire Hathaway Inc. to Chrysler Group LLC and Lowe’s Cos. (LOW) to expand.
Orders for non-military capital goods excluding aircraft, considered a proxy for future business spending on equipment and software, climbed 7.2
percent in January from the prior month, the biggest gain since September 2004, revised data from the Commerce Department showed today. They’re
up 9.8 percent since November, the most for a three-month period since 1993.
Full Story
140 Mountain Avenue, Suite 204, Springfield, NJ 07081 | Phone: 973-379-6644 | Fax: 973-379-1616 | www.blauberg.com
The information contained herein has been obtained from sources considered to be reliable, but no guarantee of its accuracy is made by this company. In addition, no representation is made respecting zoning, condition of title, dimensions, or any matters of a legal or environmental nature. Such matters should be referred to legal counsel for
determination. Subject to errors and omissions. The information contained in this document is proprietary to The Blau & Berg Company.
MARKET SOUND BITES
March 2013
“The Blau & Berg Company has been committed to its clients’
success since 1932; creating corporate real estate solutions through
professionalism, integrity, market knowledge and cutting-edge technology”
Stocks Waver, Dow Hits New All-Time High (Again)
USA Today
Contributing: USA TODAY's Kim Hjelmgaard, The Associated Press
March 7, 2013
A record-high Dow Jones industrial average and an upbeat hiring report propelled
global markets higher Wednesday.
The Dow, after setting an all-time high Tuesday, did it again Wednesday, after
climbing another 0.3% from that previous close. It now stands at 14,296.24 -- about
42 points above Tuesday's close of 14,254.38.
The broader Standard & Poor's 500 index gained a point, or 0.1%, less than 25
points from its all-time closing high. On this date in 2009, the S&P closed at 666
and began its rebound after falling steeply in the aftermath of the 2008 financial
meltdown.
Full Story
140 Mountain Avenue, Suite 204, Springfield, NJ 07081 | Phone: 973-379-6644 | Fax: 973-379-1616 | www.blauberg.com
The information contained herein has been obtained from sources considered to be reliable, but no guarantee of its accuracy is made by this company. In addition, no representation is made respecting zoning, condition of title, dimensions, or any matters of a legal or environmental nature. Such matters should be referred to legal counsel for
determination. Subject to errors and omissions. The information contained in this document is proprietary to The Blau & Berg Company.
MARKET SOUND BITES
March 2013
“The Blau & Berg Company has been committed to its clients’
success since 1932; creating corporate real estate solutions through
professionalism, integrity, market knowledge and cutting-edge technology”
Stress Tests Seen Boosting U.S. Bank Shareholder Payouts
Bloomberg
By Dakin Campbell and Hugh Son
March 6, 2013
The six largest U.S. banks may return almost $41 billion to investors in the next 12 months, the most since 2007, as regulators conclude firms have
amassed enough capital to withstand another economic shock.
Lenders including Citigroup Inc. (C) and Bank of America Corp. (BAC) will buy back $26.4 billion in shares, up from $23.8 billion, according to the
average estimate of three Wall Street analysts. An additional $14.5 billion will be paid in dividends, $3.4 billion more than 2012, separate estimates
show. The payouts are contingent on approval by the Federal Reserve.
The central bank tomorrow will release preliminary results of its stress tests on the 18 largest U.S. lenders. Next week, it will tell banks whether they
can increase their payouts.
Full Story
140 Mountain Avenue, Suite 204, Springfield, NJ 07081 | Phone: 973-379-6644 | Fax: 973-379-1616 | www.blauberg.com
The information contained herein has been obtained from sources considered to be reliable, but no guarantee of its accuracy is made by this company. In addition, no representation is made respecting zoning, condition of title, dimensions, or any matters of a legal or environmental nature. Such matters should be referred to legal counsel for
determination. Subject to errors and omissions. The information contained in this document is proprietary to The Blau & Berg Company.