As 2011 winds down, many of us are taking a look back the preceding year looking for indications that 2012 will show continued albeit minimal improvements over 2011. While we are seeing an improvement year over year from 2009 to 2010 and 2010 to 2011, we are still looking for that sign that indicated that the economy is on stable ground and we are asking ourselves: Are we out of the woods yet?
We have all been watching with great interested as the Republican presidential candidates jockey for position to win the Presidential Nomination. They each have their unique tax and employment programs to get our country back on track; albeit some plans are better thought out than others. President Obama delivered his Jobs Plan to congress which only a portion was approved while the Congressional Super Committee has failed to come up with its $1.2 trillion budget on spending cuts. It is clear that our law makers in Washington are having a hard time seeing the forest through the trees!
On the State level, Governor Snyder is pressing forward with his plans and has to make some difficult and unpopular decisions in order to get the State’s budget back on track. There is talk that the State may have to appoint a financial manager for the troubled City of Detroit so that they can get their finances in order. Recently Mayor Bing announced plans to make significant cuts and layoff a large chunk of the City’s workforce to stave off further financial crisis, the City Council responded by saying that the announced cuts were still not enough to balance the City’s budget.
We have seen continued improvement from the automotive sector; Ford, General Motors and Chrysler have all announced new investment and job hires during the past year and based upon its confidence in Chrysler, Fiat has upped its stake in the Auburn Hills manufacturer. Chrysler’s rebound has been so that it has expanded beyond its headquarters leasing 210,000 square feet at 1075 W. Entrance Drive in Auburn Hills. We are seeing the supplier base follow suit acquiring new facilities either through purchase or lease to fulfill new contracts.
On the other side of the equation, we are still seeing distress in the real estate markets as rents are still far below the levels to support the debt that many buildings need to support. Banks are still very tight with their credit making it hard for owners of commercial real estate to refinance their properties and live to fight another day. It is clear that we are not yet Out of the Woods but hopefully we are walking in the right direction.
I hope you and yours have a Safe, Happy and Healthy Holiday Season and New Year!
Regards
Matthew B. Fenster, CCIM, MCR
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