INDUSTRY OUTLOOK
The real estate industry is healthy, despite some concerns to the contrary. While the run-up in
values is leveling off, in most markets supply and demand are in equilibrium. In
high-barrier-to-entry markets such as New York City, we are likely to see increasing rents and
higher values, and the continued influx of capital to commercial real estate that has provided
liquidity is unabated. High demand and prices are focused on five markets (Chicago, Los Angeles,
New York, San Francisco, and Washington, D.C.) as they have been for quite some time. Frothy
speculative markets such as Las Vegas have been hurt. It was a mistake to generalize about the boom
before; it is a mistake to generalize about a downturn now.
