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The "Great Recession" is beginning to recede. While that is what is heard from Wall Street and our government, many of us feel that there is a long way to go before the economy feels right again. The stock markets are soaring on the belief that all is well even though the jobless rate is persistently high. How can everything be so good for them when a majority of Americans are not convinced that the country is on the right track?

The President and Congress rail against the bankers and brokers and do nothing to correct the behaviors that allowed the economy to fall in the first place. They speak of regulating, but it seems nothing is passed. Even the solutions the politicians are proposing appear to be nothing more than window dressing. The United States has become the land of Big Government, Big Business and Big Labor Unions; which is all to the determent of the majority.

The BIGS are parasites who feed off the rest of us. Government employees are paid more and have better benefits than those who work in the private sector. Big Business is subsidized by small business in the land of the BIGS. Citi and Chrysler are given billions while small business is left not only to fend for itself but is taxed to subsidize those receiving this largess. Unions don't have to worry about their special place at the dinner table because the employees of small businesses are the ones providing their dinner.

The country can't move forward because the BIGS won't allow anything to upset their particular apple carts. Their status quo is more important than the good of the nation and the majority of its people. The BIGS can't even pass universal health care which every industrialized nation has had as a right for many years. What the BIGS call health care reform is nothing more than a continuation of the same big hogs eating the corn while the chickens scratch in the yard for a little feed.

Most of what the BIGS do is not for the good of the majority. It is to keep the elites from experiencing the same economic uncertainties as the rest of us. If that were not true, why is it that we have a tax code that is inscrutable to all including the IRS. If we truly were an egalitarian nation, we would have a flat tax on income with no exemptions and that would include social security and universal health insurance. The tax would be calculated from the first dollar of any income irrespective of how it was earned. In a truly egalitarian and free-market nation, there would be no businesses too big to fail, no elected official beholden to an industry or labor union, and no government worker who couldn't be terminated as in the private sector. The government would regulate industry to prevent fraud and malfeasance -- not to encourage certain proscribed behaviors.

If all of us, including the BIGS, do not begin to look to the good of the entire nation, we will not survive as a truly great country. The specialness that many Americans have come to believe is our birthright was not granted to us by God but rather bequeathed to us by past Americans. If we want that birthright to continue, we must bequeath to our children. But, that won't be done without hard work and sacrifice by every American from now on.

The 2010 Designers' Show House to benefit the Martin County Chapter of the American Red Cross will be open to the public from March 20 through April 10. This spectacular home, located on the St. Lucie River in Sewall's Point, will feature rooms decorated by area designers. The home will be open for viewing Monday through Saturday from 10 a.m. until 4 p.m. and on Sunday from noon until 4 p.m. For more information, visit www.martinredcrossdesignhouse.org.

Thomas F. Campenni, CPM CCIM, represented the landlord in renting a ground floor space at 95 University Place/41 East 11th Street in Manhattan to Pop Burger, a casual restaurant with other locations throughout New York City. The 12-year lease, finalized in mid-February, will produce an aggregate rental of more than $3,700,000. The tenant was represented by Joseph Isa of Winnick Realty.

The building, located on the northeast corner of University Place and East 11th Street, is in the final stages of completely renovating the stores (including new storefronts and mechanical systems). The building has recently completed the replacement of the heating system and is in the process of installing new elevators and a new security system which will be completed by the summer of 2010.

Thomas F. Campenni, CPM CCIM, served as the broker representing both the Owner and Tenant in the leasing of the corner store and basement at 41 East 11th Street (a/k/a 91 University Place) in Manhattan. The new tenant, CGP Enterprises, is a tri-state operator of upscale delicatessen restaurants. The 10-year lease, finalized in early February, has an aggregate rent in excess of $3,500,000. The building, located on the northeast corner of University Place and East 11th Street, is in the final stages of completely renovating the stores (including new storefronts and mechanical systems). The building has recently completed the replacement of the heating system and is in the process of installing new elevators and a new security system which will be completed by the summer of 2010.

The commercial real estate leasing market continues to improve in most geographical areas where we operate. While prices for the sale of properties are still in flux, it appears that rents for those properties and rental activity have finally reached bottom. It has been a long time coming, but the drop from 2007, 2008 and 2009 has finally hit a plateau.

Since the beginning of 2010, I have seen a remarkable increase in the number of inquiries for renting of commercial space. Brokers and prospective tenants are realizing that this may be a great time to move or expand. The price per square foot for office and retail space is probably the lowest it will ever be. If you want to open a business, a store or an office, this is a golden opportunity to do so before rents once again begin rising.

After going through their worse years since the 1930's depression, owners are eager to make deals. At this moment in time, both sides realize that the bottom has been reached. Owners want to begin filling the vast amount of empty space that has accumulated. Real deals are to be had for those tenants that are first in line to take advantage of this unique opportunity.

As the number of vacancies decrease, starting rents will begin to rise and concessions will be fewer. That is why it is so important for brokers and tenants to take advantage now. I am seeing entrepreneurial businesses jump on this opportunity while more established and larger firms are losing out because of their bureaucratic tendencies.

I have or am in the process of closing several deals with tenants. Each one of those tenants is entrepreneurial with but established offices and businesses. They do not over-rely on others before making a decision. Twice in January, I saw large corporations lose space to entrepreneurs because of their inertia. These entrepreneurs possess the ability to make quick and nimble decisions. They are renting the best spaces in the building, taking advantage of the lower rents and more concessions being offered, and will be open for business long before completion invades their marketplace.

The one exception to what I have written is the Treasure Coast market of Florida. While the other areas where we operate are doing much better, the Florida market continues to lag behind. Overbuilding of product, a higher unemployment rate, fewer new residents arriving and high real estate taxes are some of the factors that contribute to Florida lagging economically behind.

While I don't see a return to an earlier period of spiraling rents, I do see a period in which rents increase proportionately to the economy. Once rents are stabilized, then prices for properties will also stabilize. Too often in the last decade, investors overpaid for real estate based on faulty assumptions of what future rents would be. Mortgage lenders have learned their lesson (at least for a little while) and will improve their due diligence before lending. Perhaps reality will once more prevail in the real estate market.

The American Red Cross provides food, shelter, comfort, and hope to families all across the US. In this season of hope, the Red Cross is asking people to give a gift that can really save the day when the next disaster strikes, when a neighbor's house burns down, or when a child needs a hug and a blanket.

For example, did you know that 540 people die each day from measles? Your $25 gift can vaccinate 25 children. Did you know that the Red Cross works with the military to deliver messages and get service members home to their loved ones during emergencies? Your $75 gift can help one family connect during an emergency. Did you know that families devastated by hurricanes, fires and floods often do not have even basic supplies? Your gift of $45 can provide comfort kits containing shampoo, soap, deoderant, a toothbrush and other essential personal care and hygiene suppplies for 15 people.

When you are doing your holiday shopping, consider visiting the American Red Cross Holiday Gift Catalog online at www.RedCross.org/gifts.

President Obama and his economic advisors continue to state the Great Recession is over. It is a thing of the past, the danger has been averted and "Happy Days Are Here Again". The stock market is soaring and the banks will pay out record bonuses this year. I am just so glad that the oligarchy that now comprise our governing and business elites have determined that all is right with their world.

But I am not of that world. Like millions of other Americans, I don't feel that the Great Recession is over and done. As a real estate professional, I see business owners and residential tenants struggling to pay their rents. Vacancies are not being leased. And 10% of our work force is unemployed.

I see our Congress and the President locked in an epic struggle about healthcare that will likely produce more of the same. Every other advanced economic nation managed to solve this problem decades ago. The solutions being proposed now will do nothing for the long-term societal and economic reasons that propelled us to tackle the problem. At the same time, the reasons that Wall Street sent us close to the precipice are not being addressed. Congress, the bankers and the bureaucrats are in their own universe which does not include any real change or oversight. If only the window dressing of regulation changes, then what is to prevent the same thing from happening again?

While we beat our collective chests and proclaim that we are Americans, The Chosen Ones, the rest of the world looks at us with disbelieving at our parochialism and naïveté. The United States spent the better part of the 20th century creating the most dynamic economy in the world. Now we are so blinded by our earlier success that we don't see what may befall us.

Tto enrich the few, our government has allowed last year's deficit to be almost $1,500,000,000,000.00 (a trillion and half dollars). Not even the Chinese can buy all that paper. It is unsustainable. The Fed will print more money and inflation will roar again. What is the average person (often referred to as "hard working Americans" by politicians when it is politically expedient) who is not a member of the oligarchy to do?

I have come to believe that stocks are not a viable investment for the average investor. The deck is stacked against those outside the club of institutional investors. A good hedge against inflation, however, continues to be real estate. But, you must do your homework and not use leverage in a way it was not meant to be used. When buying an income-producing property, make sure that the price paid reflects what the rents are today. In the recent past, too many investors were using unrealistic projections in determining purchase price.

When inflation begins to kick in, it is important that your leases have clauses that protect you (e.g., cost of living). If you have relied on realistic projections when determining your property investment, then you will be able to weather the coming inflation by at least keeping the dollar value constant. With good management and proper leases, you will also see cash on cash return on the investment. Through good and tough times, nothing does better over the long run than a solid real estate investment.

Check-O-Matic, a copy and printing showroom, has signed a lease at 21 West 46th Street in Manhattan. The 3-year lease runs from November 1, 2009 through October 31, 2012. The owner was represented by Thomas F. Campenni CPM CCIM.

Thomas F. Campenni, CPM CCIM served as the broker in a lease deal with The Resource Club LTD, a garment company, for an additional full floor (10,000 sq ft) at 134 West 37th Street in Manhattan. With the addition of this new space, The Resource Club LTD now leases 3 floors (30,000 sq ft) in the building for their general and executive offices. The company has signed a new 10-year lease for the 3 floors at an aggregate rental of more than $10 million. The owner was represented by Thomas F. Campenni.

The real estate market is supposedly improving. It is hard for me to believe that is true when the unemployment rate continues to climb. How can people who are still without jobs afford to buy houses and apartments? If companies are not hiring, then how are recent graduates to rent their first apartments? With obtaining a mortgage becoming harder and harder, the real estate market cannot improve for the average person.

It would be imprudent for the vast majority of Americans to enter the market until they know their jobs are secure. You do not buy a home or rent an apartment unless you have the means to pay for it. What we see now is nothing more than the usual puffery by both the real estate industry and the media.

President Obama is trying to convince the country that his stimulus plans and the rest of the Washington voodoo have saved the Republic. Most Americans may want to believe it, but they are having a hard time doing so. Deep down, they know nothing fundamentally has changed. The Democratic-controlled Congress holds hearings bashing the banks, Wall Street, and insurance companies but continues to take millions in contributions from them. The Obama administration talks tough but up until now has done nothing to make sure that a repeat of the debacle will not re-occur. The Republicans spout inane platitudes that make them appear more and more irrelevant.

Is there any wonder why so many of us hold our elected leaders in contempt? Many ordinary people distrust Washington and their allies in Big Business and Big Labor. Lobbyists, whether they are from the UAW or Focus on the Family or The National Association of Realtors, are looked on with scorn. Americans innately know that the lobbyists, the politicians, and big business and labor are not concerned with the common good but with their own parochial interests.

The collective interests known as "Washington" can dribble all they want about the economy improving, but until reforms to the system are made, it will be all illusionary. Any stock market gains will be lost, and any jobs will be temporary. We have been in this illusionary state for about twenty years. How can economic growth be based on the sale of Credit Default Swaps instead of the increased manufacturing of products. Is the American economy sustainable when our largest export is becoming the sale of U.S. Treasury debt to China? What is being perpetrated as economic growth is theater of the absurd.

Can any industry in the United States from cars to real estate really have sustained growth if our government does not have sound economic policies? It is a question that needs to be answered or else nothing of value or of any duration can happen. With each economic downturn the country looses standing in the world. Great nations are not just militarily powerful. Military power is unsustainable without economic power…one needs only to take a look at Russia to find the latest example of that fact.

Wall Street seems to be doing really well these days. I just can't figure out the reasons for the upsurge. From everything I see, we are still mired in the worst economic mess since the 1930s. When a dichotomy such as this occurs, I often think there is more than just one economy in the United States. There is the Wall Street/Banking economy, and then there is the great majority of Americans who actually produce and add to economic activity by making widgets, flipping burgers and growing crops. This is what we produce and sell, our economic output, to the rest of the world.

I don't think the Wall Street/Banking economy works like that. It seems to me that they just move paper from place to place to make their money. It's not quite real since what they produce is not concrete and tangible. You can not point to it and say "I had a big sale" or "I made 300 breakfasts at the diner" or "I produced 500 dresses." A Wall Street worker can say she bought 5000 shares of P&G at $30 and sold it at $31 making a profit of $5000. A banker can say he bought $500 million of commercial paper and unloaded it for $550 million and made a $50 million dollar profit. But what tangible good has really been added to our economy?

The salesperson with the big deal moved product facilitating getting goods from A to B. The short order cook fed hungry diners. The dress manufacturer took material and created a finished good. The Wall Street/Banking industry's transactions made those of the real economy look puny and inconsequential. Yet which of the transactions accomplished more for our society?

It is not that we don't need banks or a place to raise capital in order to have a vibrant economy. Banks are needed to facilitate the disbursement of funds. We need a safe place to deposit our earnings and, after paying our bills, a secure place to save our money. Banks then have the funds so that we can borrow to buy a car or a house. They should be compensated for providing those services. Larger companies and enterprises need somewhere to go to raise funds to increase output. The stock and bond markets allow that to occur. Wall Street entities that raise the capital to foster increased output should be compensated also.

What we as a society have forgotten is that Wall Street and the Banking worlds exist only to service the rest of the economy. They don't produce or add value to goods. They facilitate the transfer of funds from those who want to invest to those that need the investment. The United States and most of the rest of world were trying to base their economic growth to a large extent on the movement of funds not the production of goods. It is true these banks and investment groups were making profits from the movement of funds, but the profits were unsustainable since nothing of value was created.

We have just bequeathed to our children and grandchildren crushing debt to bail out these "too big to fail" institutions. Congress, the Federal Reserve and the Administration have not really addressed the reasons we are in this mess. They frequently cite their vigilance in making sure bankers don't receive large a bonuses or who can pay back TARP funds to the government quickly. But they do nothing to curb the excesses that allowed our economy to become such a mess in the first place. It is hard for our political system to regulate the people who write the checks to election campaigns…..to say nothing of the egregious costs associated with running a political campaign. Unfortunately, if serious reform is not undertaken and if our political leaders continue to think that real wealth can be created by moving paper instruments from one country to another, then we are in for a repeat of this disaster.

The disconnect between the money business and the rest of us has not been corrected. If it had been, we wouldn't be seeing profits and a rise in stock prices when the people who actually make things continue to struggle. Until there is once again a connection, I am afraid that we are headed for another bubble in a few years. Only this time there will be no bailouts of Wall Street/Banking because the rest of us will be broke and our credit will be exhausted.

Polly Campenni has accepted an invitation to join the Board of Directors for Domino's House, a no-kill cage-free cat shelter located in Palm City, FL. Polly has been an active volunteer at Domino's House over the past several years. In addition to continuing with her regular volunteer commitment, Polly will focus on marketing and fundraising for the 503 (c) (3) shelter.

A year ago, I experienced the world economic collapse in abstract terms. By Christmas of last year, it had become more personal because of the loss in my investment and retirement accounts. Then, in January and February our commercial tenants began to complain that their businesses were experiencing losses. March brought even more of the same with tenants of 20, 30 and even 40 years in business calling it quits. April brought residential tenants moving and breaking their leases, especially young people, because of lost jobs. Now, not a day goes by that I am not trying to keep tenants in place by offering concessions or deferred rent payments.

Vacant spaces that 18 months ago would be rented within a month now linger without a single showing. Through the first 6 months of this year, I have hardly had any new commercial tenants. This may be the worst I have seen the market since the early seventies. In the past when things were bad, I remember that prospective tenants at least had interest in available spaces. Now, there is little or no interest. Businesses are just not opening or expanding. While summers have always been a bit slow, the summer of 2009 is just dead.

When things are as bad as they are now, the planning and preparation that smart investors did will pay dividends. Everyone looks like a genius when the economy is doing well. Why not ignore fundamentals when you can buy a property and mortgage it for more than you paid? It doesn't matter whether the rents collected even equal the monthly interest due…never mind all the other expenses. The banks were more than willing to accept those rosy scenarios of ridiculously increasing rents with each passing year. It was one fantasy atop another. By the end of the cycle, reality played no part in those investments. It was inevitable that these investments would fail and would contribute to the collapse of the banks.

Those owners and investors that did their homework and who relied on empirical data and the fundamentals of the real estate markets will come through this period just fine. There is no substitute for common sense whether the investment is real property, stocks or bonds. You need to look for a steady reliable return on the money under investment. Remember you are investing not gambling.

Any money that you are investing is money that you worked long and hard to earn. The return on that capital will determine how your life will be in retirement, whether your kids and grandkids will have an inheritance or a college education, and whether that house on the beach will someday be yours. Would you take your money and bet it all on the turning of a roulette wheel? Most likely not. Then why would think that you would do any better in the stock market or in real estate without applying fundamental investment techniques and principles?

It is when times are at their worst that those who practice sound investment techniques will not only survive but prosper. When the market is as low as it today, this may be the time to buy. If you have a ten-year horizon, then this may be the opportunity of a lifetime to put your money into real estate. But do so only after you have investigated the property and have done your homework. There are credentialed, professional real estate asset managers with the expertise to help you through this process. Be sure to seek professional advice prior to making such a large financial investment if you are not a seasoned real estate investor.

The new administration has been in office for several months. In that time they have certainly reshaped the economic underpinnings of the country. We no more think that free market capitalism is sacrosanct -- not that it ever really was. What we had under the last administration was not really capitalism but closer to the Russian model of Oligarchy.

With President Bush and Congress leading the way, the big got bigger and the rest of American business was relegated to the sidelines. A bank was no longer just a place to deposit your money, cash your paycheck and get a loan. It became a financial supermarket with different departments doing everything from selling you stocks and bonds to trading those nasty credit default swaps.

The big tried to invade each other's territory. Wal-Mart wanted to have a bank and Citi wanted to become a real estate broker to sell you a house. Big Business's mantra was they needed to go into all types of businesses to compete with those big bad foreign entities. Of course those big bad foreign entities were saying the same thing to their respective home country governments and regulators.

The big boys from GM to Bank of America enticed politicians and regulators with campaign contributions to get their way. They succeeded in being allowed to buy up competitors until they became behemoths with a stranglehold on the US economy in such a way that would have made John D. Rockefeller and Andrew Carnegie proud. In the 19th and early 20th centuries, many believed it was "efficient" to be a monopoly.

Democrats and Republicans both adhered to that dictum for the last twenty years. While the small business person has been regulated to death in the name of protecting society, the big boys were allowed to write their own rules. In the process, they became too big to fail. It wasn't a failure of capitalism, but a perversion of its doctrine, that lead to this mess.

What is the solution that Congress and the Obama administration have come up with? They continue the prior administration's belief that the auto industry, insurance companies and banks are too big to fail so they must be rescued by current and future taxpayers. A few CEO's of these behemoths will be ousted. Individual members of Congress and the Senate will make bombastic statements in empty chambers. They will berate witnesses by asking leading and politically-motivated questions in hearings, and in general show their utter ignorance of our financial system.

Obama and his economic team, who, for the most part, have never held private industry jobs, have not addressed the root cause of this economic catastrophe. Most of these financial institutions should have never been allowed to become so big and deal in such diverse products. It is ridiculous to believe that one entity can be both a conventional bank and at the same time an investment broker and bank, a hedge fund, and a purveyor of any other financial product that it wants.

In order for a financial meltdown to be avoided in the future, several things must be done. One of the primary things that government must accomplish through regulation and policy is to makes sure that the current banks are stripped of their ancillary businesses. We should only have one institution too big to fail, and that is the United States.

Tom was featured in an article in the May-June '09 issue of Commercial Inbestment Real Estate, the Magazine of the CCIM Institute. The article, "Retail's New Reality," called upon various CCIM experts in the retail sector, and Tom was included. Go to www.ciremagazine.com for more information.

Tom has been invited to join the Board of Directors of the Martin County chapter of the American Red Cross. Tom has been an active volunteer at the chapter since moving to Florida in 2005. He is a member of the Disaster Logistics team and is responsible for the food service at all shelter operations. Martin County's chapter has been designated a High Performing Chapter, an accomplishment achieved by only 10% of the chapters throughout the United States. Visit www.martinredcross.org to learn more about the American Red Cross.

On this Presidents Day 2009, I wish I could have more hope about the future. The entire world, including the United States, is in a catastrophic economic mess. There is no recovery in site anytime this year or even in 2010. Congress has just passed an enormous economic stimulus measure that will be 6% of GDP this year, and the President will sign it with great fanfare today. The bill has just as many critics as supporters, and neither side believes that this is anything more than a down payment in "moving the economy forward." The President and Congress are next promising to look at the car companies and banks again in addition to taking care of the huge credit crunch.

It seems that the United States government has taken the position that no institution, industry or individual can be allowed to fail. If a bank made bad loans, then it must be rescued with tax payer's money. If the car companies couldn't (or wouldn't) create the right product mix, then it is the taxpayer that must pay to keep them going until they do. If my next door neighbor bought a house he could not afford with money he did not have, then somehow it is my responsibility to help pay his debt. Our society has devolved into one that celebrates victory and everyone needs to be victorious.

A generation ago, we began to teach our children that everyone was a winner. No one is second because everyone is first. Merely coming to the game resulted in being awarded a trophy -- no effort or talent needed. We did not want to damage the child's little ego by insisting on performance. So, we raised a generation of kids that strived for nothing, were never challenged by adversity and wanted for nothing. While we instilled the vices of under-performance and immediate gratification in our children, the nation's leaders were doing the same to the country's adults.

The following platitudes were said and written so often that they became our Orwellian credos. We were the only super power. The rest of the world envied our standard of living. We were technologically superior. Our medical system was unrivaled. Our education was the very best. With each passing year, those clichés have become less and less true.

While our military still remains unsurpassed, we no longer can recruit the most able to the ranks. Instead we rely on less and less qualified individuals to meet recruiting needs. According to the UN, we rank 15th in the world's quality of life index. In the UN educational index, the U. S. is 20th, even ranking behind Castro's Cuba which is 13th. In the overall democratic index, the United States ranks 18th due to our generally low voter turnout. When it comes to health care, we are rated 37th behind most of Europe, Saudi Arabia, the United Arab Emerits and Costa Rica. While our life expectancy is 24th in the world, we are number one in what we spend for that health care as measured by our gross domestic product.

In the next few months, Congress and the President will be spending hundreds of billions (perhaps trillions) of dollars to fix the problems of businesses and individuals. This is money we will have to borrow from the rest of the world. If China does not or cannot lend us the money, our choice would be to print more which will surely start an unprecedented cycle of inflation.

They are taking these actions to keep people in their homes – homes many of those people could not originally afford to buy. Well, Mr. President and members of Congress, there is nothing sacred about a house. It is there to shelter you against the cold. The same need can be met by renting an apartment. What our elected officials want to do with the proposed plan is to reward people for their bad behavior while at the same time punishing those who acted responsibly by not spending more than they could afford. By their proposed actions, the government will artificially keep home prices at an inflated level. Whether they do this through subsidy of the individual or the institution, the bottom of the cycle cannot be reached.

The reason that real estate prices are in this predicament is because of cheap and plentiful money and the lack of proper underwriting standards. Cheap and plentiful money allowed builders to build too many homes, offices and shopping centers. Cheap money allowed individuals to buy homes and condos with no money down and in some cases borrow more on the property than the purchase price. Cheap money spurred prices for properties to artificially inflate even when there was no shortage of product. In fact, the amount of product continued to grow much faster than demand for the product because of this policy.

There was so much credit available that, in order to lend money fast enough, underwriting standards were negligible at best. Builders were given money on demographics about population and income that were impossible to achieve. Developers were given money to buy office buildings on the premise that rents could be raised once current leases expired to unsustainable levels. Individuals were given so-called "no doc" mortgages on homes with inflated market value with no down payment.

The real estate crises is just one more example of the "no sacrifice no adversity" school of nationhood. Everyone should have everything they want regardless of merit or work or qualifications. At one point in our history the United States really did have an entitled upper class. There were Boston Brahmins and other old money elites that controlled business, banking, higher learning and politics. That system gave way to a meritocracy based on ability to perform rather who your parents were. The meritocracy has been giving way in the last generation to one of entitlement and right. There are only winners…no second place finishes, no losers. We are truly in a race for the bottom.

Installation of state-of-the-art security systems have been completed for properties located at 134 West 37th Street and 159 West 25th Street. These systems provide 24/7 security monitoring using strategically placed, high resolution cameras which are monitored at the concierge desk and management offices. In addition, the automatic freight elevators are completely controlled from the concierge desk. Both properties are managed by Thomas F. Campenni, CPM CCIM.

It appears that the nation is in for some drastic government action in order to "save the economy." No American can doubt that the economy is experiencing the greatest recession since World War Two. I believe this crisis will be remembered as our generation's "great depression." There will not be bread lines or Hoovervilles because of the social safety net. Yet I do hope that this will awaken in all Americans, including the politicians of both parties, the notion that there is no free ride.

President-elect Obama and Congress have a once-in-a-century chance to fix our endemic problems. Programs from Social Security to healthcare to subsidy-driven industry that are mortgaging our children's and grandchildren's futures need to be reviewed and solved. For more than 30 years, our citizens have both collectively and individually lived far beyond our economic circumstances. President Hoover promised a chicken for every pot and our modern-day politicians promise a 72-inch flat screen in every home. Even war against an implacable foe like Iraq demands no blood, sweat, and tears from the general public. We are told, instead, to spend our way out of the problem.

Our elected officials set up false dichotomies between "Main Street" and "Wall Street", suggesting there is a difference. While demonizing the institutions that created the financial ruin, our Congress and President then vote hundreds of billions of dollars to save those very institutions from their sins without demanding any accountability regarding how those funds are used. Under our current system of free enterprise, a bank, a brokerage house or a car company can screws up and be allowed to stay in business by government infusion of money. This money, our money, is given to these large institutions, usually with no strings, under the auspices of saving the jobs of working men and women. Conversely, the small business owner quickly disappears because there is no safety net for him.

Most Americans work for small businesses or, more and more frequently now, simply as independent contractors with no benefits and are required to pay the full percentage of the payroll tax for Social Security and Medicare. They do not have access to the army of lobbyists that banks, brokerage houses and car companies do. What the government has done to date during this crisis is borrowed hundreds of billions of dollars from China and other nations to bail out these big "American companies" and given the bill to future generations of our citizens.

I do not know whether this is the right thing to do or not do. Only time will tell. I do know that if Obama, Pelosi, and Reid continue on the same path as every U.S. administration and Congress has for the past thirty years, then we are doomed to becoming a third rate power. The status quo is not acceptable. We, the American people, must be willing to sacrifice some materialistic things today for the good and future of our nation. It is time for a reckoning for all of us, and it is incumbent upon the Congress to take the lead on these changes. Let's hope the bills they present will be carefully crafted to address the immediate urgent problems we face and not be packed with million of dollars of pet projects for their districts. We need to take a realistic assessment of what we can afford to buy both as a nation and as individuals.

Thomas F. Campenni, CPM, CCIM, received special recognition by the Martin County Chapter of the American Red Cross for his contributions during Topical Storm Fay. Tom is part of the Disaster Relief team and is responsible for food procurement when shelters are opened during disasters.

The economic news the day after Thanksgiving is just as somber as the news was the day before the holiday. While the financial markets seesaw with every statement our political leaders make, the real estate market continues to suffer regardless of who is speaking. Real estate has three distinct challenges to overcome before equilibrium returns to the marketplace. In order to have sustainability in the market, all three of these challenges will have to be addressed and solved.

The first problem is the home mortgage crises. Contrary to what some of our elected representatives have said, only a small part of the problem was caused by unscrupulous lenders, mortgage or real estate brokers. For nearly twenty years, the elected representatives of both parties pushed the idea of home ownership for all. Though political contributions by the real estate and banking industries were part of the reason for this enthusiasm, much of that policy was brought on by politicians believing that home ownership was the birthright for all.

Rather than providing government help such as below market rate mortgages for the sub-prime market, Washington DC urged, threatened and cajoled the private financial industry to provide mortgages to poor credit risks. Cheaper priced homes became in demand because of easily obtained mortgages resulting in price escalation in that sector and subsequently every other sector. Homeowners, who a generation ago strove to pay off their mortgages, now refinanced yearly taking advantage of falling rates and perceived accumulated equity in those homes. Homes were no longer thought of as a place to live and raise a family but became commodities just as gold or platinum.

Home prices fueled by abundant and cheap money provided by Wall Street's exotic financing instruments were now caught in an inflationary spiral. Homeowners became investors and bought homes not to live in or even to rent but to sell at a profit within weeks or months of purchase. The homebuilding and construction industry responded by building more homes for these investors to purchase which resulted in the second problem -- oversupply.

As new homes were being built to meet this demand of investor market exuberance, many real estate professional investors saw where this was heading and began to sit out the market. Neither the population nor their incomes were increasing as much as prices and availability. As more and more buyers were forced into more and more exotic mortgages in order to afford to buy homes at ever inflationary prices, there was less wiggle room in the family budget. A job loss, sickness or a simple home repair became enough to send some into missed mortgage payments and foreclosure.

With oversupply of housing and inadequate income to meet existing obligations, home prices have fallen, credit markets won't lend due to losses, and fear of further economic erosion have frozen the home market. This has caused credit and financial markets to become unstable. A recession that has gripped the entire world has resulted in the third problem of the real estate industry -- the commercial vacancy problem.

When the economy goes into recession businesses need less space. This retraction causes vacancies resulting in a weakening of the commercial real estate market. The good news for that market is that unlike the home market there was no overbuilding, and therefore, oversupply is less of an issue. Unlike the last several recessions, this one did not have as one of its causes too many office buildings being built. As the nation emerges from recession, the commercial market should find equilibrium rather quickly.

Until all three of these problems are solved, the real estate market will continue to experience severe problems. But to solve these problems our political leaders must understand the problems. Our world is too complex to have the same hackneyed phrases and promises offered to us as have been offered in the past. It is imperative that our leaders surround themselves with experts and then listen to their advice even when it is advice they do not want to hear.

Not everyone can obtain the American dream of wealth and success, and home ownership is not for everyone. What our government should be striving for is giving every American an opportunity to achieve success not guaranteeing the achievement of that success.

Governments in the U.S. and around the world are now spending trillions to rescue banks and the financial industry. World stock markets are down 900 points one day and rebound the next. Banks won't lend to each -- other never mind to us. Two years ago, I was bombarded with e-mails and telephone calls from lenders and brokers begging me to borrow their money. Properties were sold for prices that bore no relationship to the income they produced.

That's when I knew it was time to sit tight and wait. I had seen this same crazy inflationary property spiral before, and here it was again. The fundamentals of real estate investing were being ignored in the frenzy climb to the top. Lenders were giving borrowers not only the money to buy properties at exaggerated prices but also reserve funds to make improvements and cover the operating expenses in hopes of further appreciation in value due to inflated rent projections.

The same convoluted investment strategy invaded the home mortgage market. The banks, investors, government and bond holders had forgotten the "real world." When you need to employ physisists and mathematicians to create your mortgage products, it should be a telltale sign that something is wrong. Finally, the "real world" did catch up with this alternate universe, and the result has not been pretty.

Now the same polititians that encouraged this 'bubble" are railing against the result. While there is plenty of blame to go around, it is not just the fault of the greedy real estate agents, mortgage brokers and bankers. It is also the fault of our elected officials who thought they could make home ownership affordable for all with initially low interest rate mortgages, no money down and no closing costs. I believe when all is said and done, it is also the buyer who accepted the loan that bares ultimate responsibility.

Whether you are a supposedly sophisticated developer or a guy buying a tract home for the first time, aren't you supposed to analyze the terms of the deal? If you are earning $50,000 per year and your amortization, interest, insurance and real estate tax payment comes to $30,000, how are you going to make that payment? If the current rent roll on the investment property is less than the operating expenses, is it reasonable to assume that the rent roll will increase because you now own the property?

This is the "wishful, fanciful hopeful" investment strategy. Reality never enters into the calculation. It's only what the parties hopefully believe will happen. I am not moved by the rhetoric of keeping ordinary people in their homes even if they paid too much and borrowed too much to be there. I can't see the rationale for hundreds of billions of dollars of taxpayer money for the banks that made those irrational loans.

For the vast majority of us who did not over extend ourselves on cheap credit and greedy desires, is it fair that we be called on to bail out those that were? Should those people and institutions be rescued despite their bad decisions? If there are no consequences for actions, then what is to prevent this debacle from again happening a few years from now? I wish I had the answers to those questions.

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The real estate market continues to spiral downward on its way to bottom. Every day, the press continues to report more and more bad news. Foreclosure rates are up and home sales are down over last year. "Short sale" has become an all-to-familiar phrase in the industry. The question that is being asked is, "When will the value of real estate stabilize?" Can anyone accurately predict when the market will actually will reach bottom?

The press and most others are not asking the right questions. The real estate market should not be considered as one giant ocean without tributaries, but rather as streams and rivers representing local markets that flow together to form that larger body known as the real estate market.

In some small towns, the local market can be made up of an entire town. It doesn't matter whether the house is located on "A" Avenue or clear cross town on "P" Street. Relative value would not be affected by location. In larger towns or small cities, neighborhoods would govern "locational" values. While in larger cities, two perpendicular streets may each have different value.

The type of real estate investment also reflects what market a property is in. A single family house, an office building or a mall are all different markets even if they are in the same town or neighborhood. Each property's value will depend on these factors. Is there any wonder why it is so hard to predict when the nation will hit "bottom"?

Real estate is a unique form of investment. As I have written, it takes many different forms when considered as an investment. If you consider income producing properties, then the value can only ultimately increase as much or as fast as the income it produces. The market corrects relatively quickly because the income of the property can not sustain the debt service on the borrowed funds at the inflated price. Investment real estate is a business, i.e. income must be more than expenses in more years than not to be sustainable. Consequently, you can only hype that product for so long before the bubble pops.

The home market is a different story. It takes longer to correct because it is farther away from a "perfect" market. Primary or secondary residential properties do not produce income from tenants. However, they do have expenses such as real estate taxes, insurance and debt service. As prices for these properties escalate, so do the expenses, especially the debt service. However, as prices escalate, fewer and fewer people can afford to buy the asset since, in a perfect market, they would not qualify for financing. As we saw, though, this controlling mechanism was abated by banks and government lowering lending standards, reducing down payment requirements, and having low initial interest rates on loans. These artificial mechanisms allowed more and more people to qualify for homeownership which then consequently bid up the value of homes to an unsustainable high. When the inevitable downturn occurred due to the combination of oversupply, the price of oil and higher interest rates, the boom turned to a bust and we have a falling market.

Many factors will influence when the bottoming of the broader market will occur. That question, like others posed by the press, is irrelevant to the investor. You can not time the real estate market any more than you can time the stock market. Each purchase or sale must be evaluated through the unique prism of the time, place and circumstances when it is occurring. If, after thoughtful analysis, it doesn't make economic sense, then the investment should not be made or a current holding should be sold. Too often we see what we want or hope to see rather than what is actually there.