With the upward swing of some important macro-economic indicators in recent weeks, the planning team inside CoreNet Global was on the mark when crafting the Las Vegas Global Summit learning theme and focus months ago.
The result is the 12 - 14 October Las Vegas storyline, Convening for Change: Transforming Real Estate for a New Economy. Or as the related Brussels Global Summit theme conveys: Positioning for the Turnaround and Beyond.
It's a very timely one - no doubt - with certain global regions like Asia and Australia, even parts of Europe, coming out of the funk. We're also seeing better-than-expected GDP growth, the stock market continues to climb, and there's been a slowing in the growth of unemployment, among other signs that six months ago would have been called 'green shoots.'
Corporate earnings reports for Q2 were also surprisingly upbeat, which is helping the stock markets.
But the forecast is still pretty stormy for our industry, and no wonder. We've always been the laggard on the economic recovery curve. Even with some encouraging signs at the macro-economic level, the industry is still confronting record-low transaction volumes, an absence of credit, air-tight capital, devaluation, falling rent and occupancy rates, several tranches of toxic CMBS refinancing, and then some.
Now, add to the list a serious revision in lease accounting standards, which could turn out to be a big deal by 2012 if we're forced to capitalize all of the leases that are now off the balance sheet as operating expenses. We're talking an impact of a trillion in US dollars, in proportion with the CMBS issue.
There are, however, pockets of strength on the supply side. One for sure is the corporate services and strategic support pieces of the business. Sustainability is a huge industry niche in the making. Another is the REIT industry, which has begun to recapture public equity and is in positive territory again. While it represents only 10% of the industry asset base, it's a proven fact that REIT recovery is a precursor of a capital markets rebound.
In Dallas six months ago, I heard that some doubt there will be many big changes for the industry post-downturn. But not everyone agrees with that view point.
The fact that the brokerage and transactions sides of the industry took such a heavy hit gives pause enough to make anyone wonder about the compensation model, risk-reward and the value of long-term strategy over short-term returns.
One way or another, it's going to be about transformation. And the Vegas setting provides the ideal place and moment to start addressing it. The word's out and the buzz is growing: If you're not in Vegas with CoreNet Global, you're missing one of the most important gatherings in our industry's history. Just look at who's coming. You'll see what we mean by clicking the link below:
http://www.corenetglobal.org/Learning/LasVegasSummit2009/content.cfm?ItemNumber=13514&navItemNumber=12237