Economist pledges realistic view of Memphis commercial property market
Memphis real estate professionals will get a forecast on the commercial market, which includes the Ridgeway Trace center at Poplar and Interstate 240, on Feb. 8 from economist Loren C. Scott.
Economist Loren C. Scott will give Memphis commercial real estate professionals his forecast for 2012 using undergrad-level economics principles and history lessons instead of a crystal ball.
“A real good predictor is what we learned in (economic) principles class,” said Scott, whose Baton Rouge, La., consulting firm conducts a lot of economic impact studies for companies.
He was on the Economics Department faculty at Louisiana State University from 1969 to 1998, and chaired the department 13 years.
The 2012 Commercial Property Forecast Summit will provide an overview of commercial real estate and economic trends.
The Memphis Area Association of Realtors event will be Feb. 8 at Germantown Performing Arts Centre, 1801 Exeter. Breakfast starts at 8, and the program begins at 8:30.
Registration is less expensive if completed before 5 p.m. Friday, $40 for MAAR members and $60 for the general public. For more information, call (901) 818-2400.
In addition to Scott, Ron Kastner of CB Richard Ellis Memphis will talk about the outlook for office space, Wyatt Aiken of Commercial Advisors on industrial space, Josh Poag of Poag & McEwen on retail space, Eric Bolton of MAA Communities on the multifamily sector, Bob Turner of Southern Properties on land, Reid Dulberger of the EDGE board on economic development, and Will Taylor of Vining Sparks on financing.
Scott is admittedly a conservative economist who believes the Obama administration is practicing the worst economics of any administration over the past 40 years. He refers to the health care reform legislation passed in 2010 as “Obamacare.”
He’ll compare the “weak” recovery so far (2 to 2.5 percent growth rate) from the most recent recession to the sharp rebound made after the twin recessions in the early 1980s (8 to 9 percent growth rate).
“I’ll show how the policies that have come out of Washington have been exactly opposite of those in the early 1980s,” Scott said.
That 200,000 net job gain in December, hailed as good news, wasn’t so great in Scott’s estimation. At that rate, it will take years to re-coup the 8.4 million jobs lost in the recession while also creating 1.8 million new jobs annually for young adults entering the job market, he said.
The current economic problems cannot be fixed by raising the tax rate, Scott said. Increasing the rate does not raise tax revenue because tax hikes tend to lower production.
“The problem is not on the revenue side, but on the expenditure side,” he said.
Even if banks make money available to lend, businesses won’t take it because they feel a sense of uncertainty about Washington economic policy, Scott said.
“You won’t believe this: I’m actually an optimist,” he said. “But I’m struggling right now to give a very optimistic message. We’re just pursuing policies that are very European.
“High unemployment, slow growth, that’s what those polices generate.”
Bottom line: If Scott were in commercial real estate he’d likely be “hunkering down.”
“I would probably not be pursuing new projects right now, probably waiting to see what happens this November and see if things will turn or continue on the same track they are now,” he said, referring to the presidential election.
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