Who Pays Attention to Annual Forecasts?

Divining the Future... "Commercial real estate is beginning a return to its norm as an income-producing investment rather than the wildly appreciating asset class it has been this decade."

That's the Wall Street Journal summarizing Emerging Trends in Real Estate 2007, compiled by the Urban Land Institute and PricewaterhouseCoopers. ("Commercial Real-Estate Peak Seen," Oct 18, 2006)

"Investors will have to turn to asset management and operating performance to raise returns as investment inflows slow because of lower return expectations..."

Yes, it's that time of year when organizations issue annual forecasts predicting real estate's future. So naturally "Emerging Trends" ranks cities as "most" or "least" attractive.

Are you an office investor? Buy Seattle, sell Philadelphia. Apartments? Buy San Francisco, sell Philadelphia. Retail? Buy New York, sell Philadelphia (what's up with Philadelphia?). Warehouse? Buy New York, sell Boston.

But how relevant is real estate advice framed in these macro terms? Don't buyers and sellers make money in almost all markets and product types?

OK. Maybe if you're managing hundreds of millions of dollars spread around the country, you'd pay attention to these predictions. But for most practitioners local market specifics are far more compelling.

So where's the best information about the future performance of properties in your marketplace?

-- Peter Pike