Commercial Real Estate – Comments from Maine. Speculation runs high that this is the “next shoe to drop” in our economy. Federal Reserve Chairman, Ben Bernanke, called the alarm last November. CNBC covered the topic last week, presenting a cautious tale of how prices could do what they did in the residential market – fall below the value of the loans behind the properties. High unemployment could lead to companies needing less office space, increasing vacancy rates. But here’s how Joe Malone sees Maine. Joe, President of Malone Commercial Broker, Inc. in Portland, Maine, says: “Southern Maine, especially in the population centers, is seeing vacancy under 10% – a sustainable amount. We have seen less modifications of subletting, reducing space, or moving. There are people with cash and desire to buy, but very few are selling. In general, things are stable and improving.” His last three transactions were either cash or very low loan to value, which he says is another reason prices are stabilizing.
Three pillars of solid good news: 1) Retail chains and auto sales did well in December. Auto sales are post “clunkers”. 2) Manufacturing is improving faster than expected, and the buzz is that this could create a Gross Domestic Product (GDP) in the 4% range for the quarter – whoa. 3) It looks like short term rates will stay low for awhile, or even if they go up 1 to 2% this year, we’re still at historical lows. While many talk of inflation, the market doesn’t seem to agree.
Child mortality down. There are few statistics as core to the global human condition than child mortality. One of UNICEF’s missions is to reduce the effect of preventable childhood diseases. Their website has sobering statistics on how many children die per thousand, and even per minute. But here’s their latest data: Death rates of children age five and under have dropped by 60% since 1960, and 28% since 1990.
