An almost universal real estate investor assumption today giveseveryone some comfort that values won't fall too precipitously.That assumption is there is somewhere in the neighborhood of $300billion in equity capital waiting on the sidelines to snap upbargains and keep a floor on pricing. This money includes sovereignwealth funds, pension fund dollars committed to opportunity funds,foreign institutional monies as well as high net worth capital.

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Someone very wise and close to me always pounded into my head"don't make assumptions." So let's examine several counterpointsthat may chip away this cushion.

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First of all we have the return of the denominator effect. Thebear market has reduced stock values and increased the percentageof real estate in overall pension portfolios. That means manypension plan sponsors will look to reduce property holdings or atleast hold off on new real estate investments until theirportfolios have been re-balanced to meet their asset modeltargets.

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We haven't had any backlash yet, but at some point the politicsmay work against foreign entities buying up our choice U.S realestate, especially if spotlighted as the gains from Middle East oilregimes gouging us at the gas pumps. Some of these sovereign fundsgot burned badly backstopping major investment bank declinesearlier this year before the full extent of exposures to bad loanswas known. These generally savvy investors may now wait untilreal bargains appear on the real estate front before extendingthemselves. In any case these cash-flush international players willcontinue to focus on prime, trophy properties (like the Chryslerand GM buildings) in the best markets. New York and San Franciscomay benefit from their infusions. It's doubtful secondary ortertiary markets will derive any support or interest from them.

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Economies outside the U.S. are following us into a funk. Europeis cooling. What happens to China after all the Olympics hoopla asthe rest of the world reduces consumer spending on their prodigiousexports? Will foreign investor fervor in the U.S. slacken despitethe generally weak dollar or will the dollar start to strengthenmore, making buying opportunities here somewhat less attractive inany case?

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The world remains an extremely unsettled place, ripe forstopping investors in their tracks. We're one event away fromrekindled Mideast turmoil which sends oil prices back up whether infractious Iraq, the powder-keg Israel/Palestinian territories, orsnarly Iran. Afghanistan gets worse. And now Russia flexes itsrestored muscles (thanks to petro power) in Georgia and signals awillingness for confrontation on other fronts. Who knows what couldhappen?

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Lastly, the debt markets remain in intensive care and highlyrisk averse. Equity buyers preying on motivated sellers can'tdepend on leverage strategies to juice returns. Even that $300billion on the sidelines assumption can't come close to filling thegap in missing debt capital from the marketplace.

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Never make assumptions.

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Jonathan D. Miller

A marketing communication strategist who turned to real estate analysis, Jonathan D. Miller is a foremost interpreter of 21st citistate futures – cities and suburbs alike – seen through the lens of lifestyles and market realities. For more than 20 years (1992-2013), Miller authored Emerging Trends in Real Estate, the leading commercial real estate industry outlook report, published annually by PricewaterhouseCoopers and the Urban Land Institute (ULI). He has lectures frequently on trends in real estate, including the future of America's major 24-hour urban centers and sprawling suburbs. He also has been author of ULI’s annual forecasts on infrastructure and its What’s Next? series of forecasts. On a weekly basis, he writes the Trendczar blog for GlobeStreet.com, the real estate news website. Outside his published forecasting work, Miller is a prominent communications/institutional investor-marketing strategist and partner in Miller Ryan LLC, helping corporate clients develop and execute branding and communications programs. He led the re-branding of GMAC Commercial Mortgage to Capmark Financial Group Inc. and he was part of the management team that helped build Equitable Real Estate Investment Management, Inc. (subsequently Lend Lease Real Estate Investments, Inc.) into the leading real estate advisor to pension funds and other real institutional investors. He joined the Equitable Life Assurance Society of the U.S. in 1981, moving to Equitable Real Estate in 1984 as head of Corporate/Marketing Communications. In the 1980's he managed relations for several of the country's most prominent real estate developments including New York's Trump Tower and the Equitable Center. Earlier in his career, Miller was a reporter for Gannett Newspapers. He is a member of the Citistates Group and a board member of NYC Outward Bound Schools and the Center for Employment Opportunities.