Inching Toward Improvement

Just so we could squeeze in one more forecast event before the end of Q1, the folks at J.F. McKinney invited us to their annual forecast dinner at the Peninsula last Thursday night. Professor and economist Joe Gyourko predicted that the GDP would increase by3% this year, with the first half of the year progressing faster than the second. The US is still facing a couple of challenges in coming out of the recession, such as unrest in the Middle East that could cause oil prices to rise and a slowdown in China that could spell good news or bad news as products come in from overseas.
Heitman's Mary Ludgin says the Bs (Bed, Bath & Beyond and Best Buy) will be essential retail tenants in the coming year. With Bordersand Blockbuster declaring bankruptcy, more than 4.9M SF will need to be back-filled in 2011. While sales volume has fallen off in retail stores, it's not because of the Internet, which has yielded just 4.2%of marketshare in retail. Office is lagging even more because of the combination of workers taking up less space, shadow space in the CBD, and lack of new job creation in the service sector, Mary says.
 
We snapped Mesa Development's James Hanson and Hines' Tom Danilek schmoozing before the festivities. James is working on selling condos at the Legacy, a new tower just north of Milllennium Park and is looking forward to spring for more sales.

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