January 13, 2012

Four on Friday: Marci Rossell Addresses CREW Atlanta

Lori Kilberg of Hartman Simons and Marci Rossell

In her days as CNBC’s chief economist and co-host of the popular “Squawk Box” show, Marci Rossell gained a loyal following because of her lively and humorous analysis of economics and politics. On Thursday, Rossell, currently a visiting professor at DePaul University, brought that engaging style to the Cobb Energy Performing Arts Centre for CREW Atlanta’s monthly luncheon. (In the adjacent photo, Rossell, left, is pictured with Hartman Simons partner Lori E. Kilberg, the immediate past president of CREW Atlanta.)

Rossell’s nearly hour-long remarks detailed her commercial real estate and economic forecast for 2012. Below are four of the many noteworthy points she made during her talk.

Commercial Real Estate Markets Are Improving. After bottoming out in 2009, commercial real estate experienced improved transaction volume and financing conditions in 2010 and 2011. Pricing has yet to improve, but it is always “the last phase of a [recovery] cycle,” she said.

The real estate and broader economic recoveries would be farther along if not for the disruptions caused by last year’s earthquake in Japan and the decreased consumer confidence that resulted from the federal debt-ceiling crisis. “Those two things temporarily caused a slowdown across the board,” Rossell said. “We’re just now seeing those effects wash away.”

Single-Family REITs Are Growing. REITs that buy single-family homes and then rent them out to tenants are among the “fastest growing segments of commercial real estate,” Rossell said.

Atlanta is at a Crossroads. The population growth that largely insulated Atlanta and much of the South from the effects of previous economic downturns has slowed, Rossell noted. During the past three years, the population of the Atlanta region has increased by just 1 percent, leaving the area more exposed to the ravages of the recent recession, she said, adding “that [percentage is] starting to look like the rest of the United States.”

As a result, Rossell said, Atlanta officials must ask themselves, “Do we become Charlotte or do we become Detroit?” Charlotte, she explained, adjusted to the decline of its manufacturing sector in the early 1990s by opening “itself up to [the] financing [sector],” while Detroit has stubbornly continued to rely on the automobile industry. 

The recent streamlining of its permitting process, which officials hope will make Atlanta a more appealing destination for business expansions and relocations, indicate the city is responding to the challenge, Rossell said.

A Break-Up of the Euro Zone Wouldn’t Significantly Harm the U.S. Economy.  Rossell estimated there’s a 60 percent chance the euro zone will break up this year. Contrary to conventional wisdom, though, such an occurrence wouldn’t derail the U.S. economy, she said. “I believe that’s been priced into U.S. financial markets already.”

What would create a setback is an unexpected event, such as last year’s earthquake in Japan or debt-ceiling crisis. “What bumps you away from the [recovery] cycle? The unexpected things,” Rossell said. “Is there anybody here that hasn’t heard that Greece is in trouble?”

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