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(Editor’s note: Readers may click on the below links to view GlobeSt.com stories that discuss the recession question)Is it or isn’t it? Fears have been growing ever since the credit crunch hit the housing market in August that the economy would move into recession as a result. The most sobering assessments have come in the past six weeks or so — albeit there are still some analysts who believe we may avoid at least the technical definition of recession.

GlobeSt.com has been covering the issue from the perspective of the real estate industry. Even through that prism, though, opinions still vary about impact and duration. For analysts at Global Insight, the recession is a done deal—all that is left is for it to become official. The only question is whether it will be a mild or severe one. Right now, they are banking on a mild slowdown. (http://www.globest.com/news/1092_1092/washington/168219-1.html).

At a New York City event — law firm Morrison & Foerster LLP’s fourth real estate investing seminar – participants were equally gloomy about the next six months (http://www.globest.com/news/1083_1083/newyork/167850-1.html). One comment from Martin Cicco, formerly of Merrill Lynch, “People are questioning cash flows in every asset class. There’s a real concern of a recession.”

The outlook varies -– sometimes substantially– though when the topics narrow to specific asset classes and/or certain markets. Michael Fishbin, national director of hospitality and leisure services for Ernst & Young in New York City, for instance, believes the hospitality sector will remain relatively unscathed (http://www.globest.com/upclose/upclose/168330-1.html) by a slowdown. Travel and lodging are still activities in demand among Americans; a weak dollar means more international tourists. Also, he notes, the last hotel cycle — in which existing supply was exhausted before new construction began — will also temper volatility. When supply has been strongly constrained, “it creates an opportunity for existing hotels to hold, if not somewhat increase, their rates,” Fishbin explains. “On an overall basis, occupancy levels will be flat, and room rates will continue go up.”

By contrast, Richard J. Mack, partner with Apollo Real Estate Advisors, told the audience at a breakfast presentation sponsored by the Real Estate Lenders Association and held at Club 101 last week, that he does believe the economy is headed into recession — but doesn’t think it will translate into substantial increases in the Manhattan office vacancy rate (http://www.globest.com/news/1093_1093/newyork/168225-1.html). Assets, though, will have to be re-priced, especially as fewer landlords are getting the rents they had expected.

Investors in distressed assets, for their part, are using the uncertainly to swoop in on opportunities. Bruce Richards, president and CEO of Marathon Asset Management LLC and the opening keynote speaker at Argyle Executive Forum’s 2008 Leadership in the Distressed Markets event held in New York City in February, told the audience (http://www.globest.com/news/1090_1090/newyork/168104-1.html ) that the current credit cycle is more like that of the early 1990s – and not necessarily the 2002 cycle. He noted that if you tried to characterize the types of companies that were distressed in 2002, they were the “Enron’s of the world,” and the downturn was more about “fraud and bad business models in general. This time around, you will see more good companies with bad balance sheets and bad companies with bad balance sheets, akin to the ’90s era.”

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