Despite Slowdown,
OC’s Future is Bright
UC Irvine’s Center for Real Estate Gala reviewed the
region’s current state and its outlook
By Natalie Dolce
The world economy and commercial real estate markets
have been roiled by unimaginable events this year. Economies around the world are sagging, and capital investment flows are minimal. As a result, local property fundamentals
are weakening.
But what caused the crisis and what does it mean for Orange
County, a place that Nelson Rising, president and CEO of Los Angeles-based Maguire Properties Inc., calls one of the first to enter
the recession? He addressed these questions during his keynote
speech at UC Irvine’s Center for Real Estate’s 20th Anniversary
Real Estate Gala & Awards Dinner on Nov. 10.
“You were first into the recession, which usually means you are
the first out,” he told more than 550 attendees at the event, which
was held at the Hyatt Regency Irvine. Rising, who has deep roots
in Orange County, was optimistic about the area’s future, without
discounting the current slowdown.
“All of us want to look at the future through a crystal ball, but we
can’t,” Rising said. “All you can do is look at the past and learn from
it. We have lived through many of these hard times. The question
now is, ‘What is our economy going to be like in the aftermath?’”
He explained that in the past 40 years, there has been six recessions, with the longest lasting 17 months, the shortest spanning
three months and the average duration coming in at 11 months.
According to traditional definition, “we are not actually in a recession yet,” Rising said nearly one month before a recession was
officially declared, referring to the required two consecutive quar-
ters of negative growth. “We had negative growth in the third quarter of 0.3% and it looks like the fourth quarter will not disappoint
those who want to call it a recession.” He added, “If it’s as long as
the 1973 recession and the 1981 recession— 17 months—we would
be in one until July of 2010. If it lasts as long as 1980, we would be in
a recession only until the second quarter of 2009. If it lasts the average duration of 11 months, we would be in a recessionary period
until the end of the fourth quarter in 2009.”
To put the situation in perspective, Rising looked at where negative growth and job loss stand today compared to past recessions.
More than 550 attended UC Irvine’s Center for Real Estate’s 20th Anniversary
Real Estate Gala & Awards Dinner.
