Norton On Real Estate: Wanted for the economy: visionary leaders

Given that it is an election year, thus the process (actually the media) is on full alert, there is a great deal of hype — let’s generously call it hyperbole. Yes, our economy is slowing down, maybe even a lot and for quite a while. But look back — we have had quite a good run since 1995-96. We are good but not that good. Our challenges are many. The global marketplace means the United States can no longer rest on its laurels and presume to be the dominant player.

What happens when those sovereign wealth funds decide to sell half their U.S. treasuries to buy equities? At what price do they sell? And what interest rate must the U.S. Treasury offer to sell new treasuries to fund our massive consumption of foreign oil and negative balance of trade?

I do not pretend to have the answers, but I will predict that we are in a period of market correction and the United States must get its act together to compete in the next round. If we do not, various other countries will inch up the economic ladder as we tread water or slide somewhat backwards.

What’s the point? What we are lacking is leadership. A political leader with a grasp of global economics and the backbone to stand up for progressive and effective policies that will allow the U.S. to not dominate, but contribute and prosper in the global economy.

Clinton and Obama are NAFTA-bashing to gain fawn with rust belt constituencies. Give me a break! NAFTA has quadrupled trade in North America. Companies that figured that out have prospered. Those that have not are suffocating.

A global open economy is risky, but with risk there is reward. The fact is we have positioned ourselves to be a service provider, not a widget provider. Thus four out of five U.S. workers don’t make anything. They provide value through knowledge-based enhancements. Doing that day in and day out is much more challenging than making 100,000 widgets at $17.10 each.

So what does this all mean for New Hampshire? We find ourselves overspending at the state, county, the school administrative unit and our cities and towns. Real estate taxes go up. Fees go up. The economy softens and suddenly there are huge shortfalls. This leads to talk of cutbacks of service, layoffs, shortfalls. Consumers are distracted with $40 and $50 outlays to fill their gas tanks. Where are we going and how are we going to get there?

There are no clear answers. But the fact is we need some vision and we need some leadership in New Hampshire, New England and the United States. Without them we will be surpassed by others, not so much by their brilliance and focus as for our lack of focus and implementation of entrepreneurs and innovation that has allowed us to grow, prosper and improve our quality of life.

What does this all have to do this commercial real estate? Real estate is an asset class, a type of investment. It requires equity and credit — the ability to borrow. It is not instantly liquid, and thus requires patience. All of these components are hard to marshal when the economy is languishing and there is no clear sense of direction. Yet we all have to live somewhere, work somewhere, shop somewhere. So is it a good time to invest in real estate? It is if you have a well-located property, purchased at a reasonable price, with good tenants committed to staying for a reasonable period of time.

Bill Norton, president of Norton Asset Management, is a Counselor of Real Estate (CRE) and a Fellow of the Royal Institution of Chartered Surveyors (FRICS). He can be reached at