Musings Along I-55 from Memphis to St. Louis

 Last week I was in Memphis and St. Louis—two so- called “secondary markets” not getting much if any attention from institutional real estate investors. Secondary markets are low growth and too risky. “What’s the upside and where is the exit?” ask lenders and equity dealmakers.   With employment growth so anemic any place off the global pathways presents too big a gamble. And anyplace where you need a connecting flight to get to Europe or Asia is off the global pathways.

So here I am giving speeches about “Emerging Trends” in places that want to hear better news than I’m giving, and I need to be prepared to answer the inevitable question—“How can we do better and become more competitive?”  My answer is pretty simple. For a secondary market to have a decent chance for above average prosperity in our current Era of Less it must link into the nearest gateway market or markets or create its own global pathway out of the U.S. In St. Louis’s case they have been trying both gambits—talking about a high speed rail link to Chicago (and O’Hare)  and attempting to attract Chinese companies to use its sadly under-utilized Lambert Field (since American Airlines pulled out the old TWA hub) as a U.S. airport distribution center.

Memphis isn’t sitting idly by either. They see their future built around a combination of Fed Ex and freight railroads, which effectively connect the city already to key gateways. Fed Ex uses the airport as its American portal for organizing literally millions of package deliveries around the world and four (of five) national freight railway carriers already pass through the city. If business leaders and local officials can marshal a strategy to marry rails to air deliveries, further leveraging the city’s central location and interstate intersection well may be they have something going.

Before leaving  Memphis , I tried to visit its authentic global attraction, but my trip down Elvis Presley Boulevard ended in disappointment--Graceland was closed for the day—he was not in the building. Then inspired by hearing Rush Limbaugh on every radio station available on my drive north (well other than the odd country format or religious preacher), I made a quick pass through Cape Girardeau, MO. Rushbo’s unfortunately left-in-the-dim-past hometown along the swelling Mississippi River has really dim prospects for any global pathway links, but by that time I had been convinced by the cacophony of broadcasts and broadsides that I could never, ever possibly vote for Obama.

Then once I got in range of St. Louis NPR was consumed by the latest European debt crisis news and KMOX reported almost non-stop about the tragic defection of Albert Pujols. I mused about the global pathway solution. So we link into Europe—its banks are insolvent and its countries effectively don’t have enough to backstop the banks so the countries are all moving money around to forestall a panic. Of course, the U.S.A. has one step in the same graveyard—can we be confident that our overleveraged financial and government system is much better off? China and Brazil, the emerging market superstars, sputter because they can’t sell as much in Europe or North America. And we want to link into global pathways… Well, maybe it’s better we spend time distracted by the lamentable Pujols crisis.

 I just hope for Albert’s sake he’s been paid his $250 million upfront in gold.