Giving Thanks in a Cold Season

While thinking about Thanksgiving last week, as I prepared – and later, cleaned up after -- the traditional holiday feast at our house, it struck me that this is a rough time for many in our commercial real estate world. That said, here are a few things I’m thankful for:

1. The people in our industry. OK, it’s corny, but we get to work with many terrific folks in commercial real estate. The people in this industry are generally high-energy, imaginative and intelligent. Most try to make their corners of the world a better place. And the creativity of taking a location, envisioning a good use for it, and building that field of dreams into a real project, is striking.  I am grateful to be able to work with visionaries from time to time, and with decent folks who are often spinning dross into gold much of the time. On top of that, many are kind – an old fashioned virtue, perhaps, but an important one that makes each day a little better. (There are a few others, as with any business, that I’m not so grateful to know – so I guess I can also be grateful not to have to deal with those daily.)

2. The advent of green technologies and the growth in renewable energy. We’re just at the beginning of these technologies, and it will no doubt take a long time before all our energy is clean and renewable. But it seems that every week brings new advances in the use of renewable energy sources for power generation, hot water heating, space heating and fuels for transportation. Great advances are being made in battery technology needed to store renewable power for use when it is not being generated. While governmental subsidies are still needed to promote the development of renewable energy, its costs are coming down steadily. It is one of the growing businesses in the US (and in California), which is good for local employment. In addition, the use of renewable energy may one day lead to better energy security: the ability of the US to generate all, or much more, of the energy our economy needs domestically, without having to buy it from oppressive regimes in far-off countries – or, worse, to war over energy supplies. In my opinion, though that day of energy independence is not coming soon, it is well worth seeking.

3. The fact that we still have time to avoid sovereign default in the US. Our national debt to GDP ratio is about 65 percent or so; not good – especially as the baby boomers’ cohort lurches toward retirement and towards drawing down the Social Security "reserve" and other entitlements – but this is still much better than the ratios of most of the troubled EU zone PIIGS countries. (And, the fact that we have control over our own currency gives us a bit more flexibility also.) The banks that have received the TARP money are generally paying it back; the US economy is showing at least some signs of improvement; and we have some time to correct the poor long term spending decision trajectory we are on. Whether we will have the wisdom (and our political leaders the political courage) to tackle our long term spending imbalances timely or not is yet to be seen – but if we are smart and act reasonably quickly, we have the time to do so, and to avoid the kinds of draconian measures that have caused chaos in the streets of Greece and protests in Dublin.

These may not be the biggest, most glamorous things to be grateful for, but in a cold season, we need to cling to what keeps us warm.