Playing Politics

From talking heads to pundits to nay-sayers, it seems everyone has an opinion about the fate of the US presidency. And given how early the hype has hit this time around, it's easy to brush it all off until it gets closer to crunch time. But this just in: Presidential elections and commercial real estate have close ties, especially when it comes to predicting how the overall market will perform. So maybe it is time we tune in.

Just before Thanksgiving, the Federal Reserve reported that it sees a slower 2008 than previously predicted. Naturally, this sends signals across the growth projection screens of almost all industries, making them think a bit harder about pending expansion plans.

When economic growth slows, Americans tend to respond at the polls by supporting democrats; a theory offered by Dr. James Smith of Parsec Financial in Asheville, NC. However, Smith sees the GDP rebounding in 2008 despite the consensus of his peers (and the Fed) who predict diminished market gains come the election year. As a result, most economists envision a democrat will end up in the Oval Office. If the economy does slow, companies will become more apprehensive about long-term leases, affecting the future value of commercial properties.

Warren Diamond, CEO of American Real Estate Management, LLC, which owns four million square feet of storage centers and mixed-use properties, simply states, "If democrats raise the capital gains tax, say 10%, that makes the difference in the decision of whether to sell a property."

Once the political crystal ball becomes a little clearer in the closing months of the election year, look for a reaction by the commercial real estate market. If properties are hurried to market, it may signal a pro-democratic election because sellers want to liquidate before abated leasing activity reduces property value. If investors remain confident in their properties and hold out for higher prices, perhaps a republican will once again occupy the nation's top office.

LEED-ing the Way

Eventually, it's going to be very easy for a company to sign a lease for office space in an environmentally-conscience building. Tenants will find that property owners aren't just installing long-life light bulbs and low-flow irrigation systems to cut energy bills. Instead, landlords and developers are implementing LEED programs - the brass ring of green.

The Leadership in Energy and Environmental Design initiative has created standards for sustainability. It helps define being "green" for the commercial real estate and construction world and provides blueprints for the environmentally non-cognoscente. Additionally, it offers tenants a landmark by which to find a property that meets or exceeds their own green requirements.

The LEED program has several designations. For example, owners of existing buildings can seek the LEED-EB certification, which would mean the building has been retro-fit, updated and improved to be more earth-conscience, using contemporary materials and approaches to conservation not available upon initial construction. Being granted the LEED-EB rating means the property has met six demanding standards applied to everything from cleaning operations to maintenance practices to major building systems. Currently, less than 100 buildings in the country have reached this mark. More are working toward it.

It's been reported that some landlords across the country feel the LEED-EB standards are too stringent. As a result, some are choosing to clear their own path to sustainability while still keeping close contact with the U.S. Green Building Council, the organization that oversees the accreditation, to ensure their efforts are legitimate. That's a good sign.

Truthfully, LEED approval doesn't need to be stamped on every building. But those that do have it are doing the right thing, given the energy footprint occupied by the commercial real estate industry. Whether adopted fully by all facets of the industry or not, this program is doing a very good job of communicating that its fundamental reason for being - protecting the planet - can be achieved.

Will it be another Blu Christmas?

If holiday shopping trends from the last couple of years continue, Santa will drop a lot of electronics down chimneys this year. However, one product that might not get unwrapped as often as iPods or a GPS, is a high-definition DVD player to go along with all the HDTVs that Old St. Nick delivered last year. Why? Because the electronics gods can't seem to settle the pesky little war between the two high-definition formats: HD-DVD and Blu-Ray Disc. (Think VHS vs. Beta.)

To the layman, the difference in quality between the two formats is hardly noticeable. The only thing that will eventually settle the war is content. In other words, the format that finds itself in the favor of the largest and most valued content providers will come out victorious. Currently, Disney, Fox and Sony seem to be leaning toward Blu-Ray. Recently, film giant Paramount made the announcement that it will only offer HD-DVD content after once trying to tow the line by offering both. That decision balanced the scales.

In the meantime, if you happen to be an early adopter and have to have a suitable counterpart to your 1080p 50-inch plasma, here are some choices that can provide plenty of hi-def entertainment this holiday season:

Venturer HD-DVD Player. You can find it for $189.00. Sure, it's not a Sony or Toshiba, but it's also under $200. If Blu-Ray wins, you won't have sacrificed much.

Toshiba 1080i High Definition DVD Player, HD-A2. At $288.28 it's a bit pricey but comes with five HD-DVD movies of your choice.

Sony Playstation 3 Available in most electronic stores for $499.00. Right now, the Playstation is the most affordable Blu-Ray Disc player on the market. Even if HD-DVD wins out, you'll always have the video game capability to turn you in to an apathetic couch potato.

LG BH100. Online at DataVis.com for (gulp!) $779.00. Now we're really talking pricey. The catch? It plays both HD-DVD and Blu-Ray. This is for the person who doesn't quite have everything. Yet.

In the end, it seems that the only real casualty here is the consumer. Stay tuned though, because as download speeds and broadband capability continue to improve, all the sought-after content may be online and your hi-def discs may be end up needing space next to your 8-tracks.