We've all heard the rumblings about the potential demise of the commercial real estate market. The old saying in the commercial business is that "commercial follows rooftops" which basically means that residential development is followed by a surge in commercial development. Retail stores, businesses open to serve the new residential growth. Does it mean that with a downturn in residential sales and prices that commercial real estate will also fail on a similar level as residential? I don't think so, but what I think matters very little in comparison to what the news media thinks of the situation.
I have huge respect for those journalists who devote themselves to getting the story RIGHT versus just getting the story. The problem is, that in a world where print media competes with television news and where immediacy is king and accuracy and completeness are secondary, we are often given an incomplete and inaccurate picture of the way things are. I believe this happened in my area with the reportage of the subprime mortgage situation. Our market was compared to the meltdown markets of Phoenix, Sacramento, Las Vegas and Florida when, in fact, local lenders were not experiencing foreclosure rates anywhere near those markets. Our local paper just took national wire service stories, pasted them on to the front page of the paper, wrote an alarming headline, and VOILA, there was a crisis where none had existed.
Commercial practitioners have an opportunity (and possibly an obligation to our clients) to help local media outlets keep the story accurate. By assembling and distributing local commercial real estate metrics such as vacancy rates, prevailing capitalization rates, absorption rates and anecdotal information driving the market, we can get ahead of the information curve and beat the media to the story simply by understanding the story better than they possibly can. We then need to share that information with the media. Caution: There is no room here for puffery or speculation, as Joe Friday would say: "Just the facts, ma'am." While this action won't stop any commecial market correction, it will at least provide some documentation to the adjustment and would remove the "Fear Factor" from any correction we might see.
Just a thought.
Keep 'er steady.