Before I began social marketing via BuzzBroz to support Overactive Imagination Pictures I was a real estate broker and developer. Back in 1990 I was deep into building Oprah's Harpo Studios and a $162 million skyscraper. One cold December day, near the end of that year, I had lunch with my friend, past client and former mentor, Chicago great Paul Beitler.
Left to right: John Lamb, Oprah Winfrey, Jeff Jacobs, Ken Sheetz
I remember the sinking feeling I had when Paul told me that 1991 was going to be a disaster of a year for all of us in commercial real estate. He was right. In 1991 I lost everything I owned in the first of a wave of friendly, and not so friendly foreclosures, that devistated almost every property in Chicago, including the mighty Sear Tower. Nothing was "too big to fail" in the real estate crash of '91.
So imagine my horror when Paul warned me in late 2008 that 2009 would be a worse economy than 1991. And darned if he wasn't right again. In 2009 I had a lot shorter distance to fall than 1991 but the sheer lack of capital made it sting far worse. I gave up many things I loved to survive 2009.
But fearing the worst might not yet be over despite the new year, I asked Paul if he saw 2010 as a year of recovery. Luckily for you, dear reader, Paul has graciously consented to share what he had to say to me. But first a little about Paul Beitler, president of Beitler Real Estate Corporation, pictured below.
So imagine my horror when Paul warned me in late 2008 that 2009 would be a worse economy than 1991. And darned if he wasn't right again. In 2009 I had a lot shorter distance to fall than 1991 but the sheer lack of capital made it sting far worse. I gave up many things I loved to survive 2009.
But fearing the worst might not yet be over despite the new year, I asked Paul if he saw 2010 as a year of recovery. Luckily for you, dear reader, Paul has graciously consented to share what he had to say to me. But first a little about Paul Beitler, president of Beitler Real Estate Corporation, pictured below.
Over the course of Mr. Beitler’s 30 year real estate career, he has achieved a remarkable financial success record for his partners and investors. Mr. Beitler has been responsible for the development of over 10 million square feet of Class A office space, including some of the largest and most architecturally distinguished building in the City and suburbs. Many of these developments sold for the highest values in the history of Chicago providing unprecedented financial returns for investors.
In addition to his success and involvement in the business world, Mr. Beitler is extremely active in many prominent civic, cultural and business institutions. He has served on the Board of Trustees of the Museum of Science and Industry, Board of Trustees for the Museum of Contemporary Art, Member of the Architecture Committee of the Art Institute of Chicago and is on the International Board of Directors for the Frederic Remington Art Museum in New York.
Paul Beitler's Thoughts on Economic Recovery
2010 is going to be a transition year. While viewed as being better than 2009; it won’t be putting the world on fire.
The main problem is the Obama administration who continues to send mixed and unclear signals to corporate America. When in doubt do nothing. And that is exactly what most decision makers are doing - - nothing.
The commercial real estate industry will not expand. Most of the trading that will occur will be the buying and selling of second position paper for properties with the intent of blowing the original developer and equity holder out of the deal. Nice hummm.
Residential properties will continue to lose value. I estimate that the residential market will lose another 15-25% in overall value.
Banks are continuing to hold on to the money they have to balance against their bad debts which they are refusing to write down against their profits. So there will be little if any new money for borrowers.
As always those people who manipulate money for the benefit of the public investor will do well. Hedge fund and derivate operators will continue to make a lot of money.
Unemployment may drop to 9% but the general public will not return to their old spending habits which means the single saving grace called American Consumerism will not come riding in to rescue the economy.
2011 will start to show the first signs of recovery with the real benefits realized beginning 2012.
Well, there you have it. While Paul doesn't see a quick recovery I'm happy, given how he's usually bang on in his predictions, that he sees a recovery coming at all given some of the doom and gloom I've been reading of late. So chin up!
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