JLL’s top economist forecasts low probability of a recession

“I don’t think we are on the precipice of an implosion. I don’t think it is all doom and gloom”: Ryan Severino

Miami /
Feb.February 13, 2020 04:30 PM
Steven Hurwitz and Ryan Severino

Steven Hurwitz and Ryan Severino

JLL’s top economist sees the probability of a recession as low, but said that geopolitical upheaval, global fear generated by epidemics like the spread of the coronavirus and the upcoming presidential election can create some turbulence in the real estate market.

“I reasonably expect the economy to slow a little,” JLL Chief Economist Ryan Severino told attendees at the firm’s “Sunshine State of the Market” event at the Four Seasons Hotel Miami on Wednesday. “I don’t think we are on the precipice of an implosion. I don’t think it is all doom and gloom.”

Severino expects the Federal Reserve to hold off on making more cuts to the interest rate in 2020. Without the looming threat of recession, the Fed would prefer to hold off on any more cuts, he said.

“They are really running out of ammunition to blunt the impact of a recession if it comes at some point and time,” Severino said. “I think they may make one move…. At some point you run out of interest rates to cut and you don’t want to find yourself in that position.”

The Miami market, he said, is still benefiting from population and job growth in Florida, which he tied to the region’s dependence on trade with Latin America.

“The Miami market is growing faster than the overall U.S. market,” Severino said. “I see a market that is tethered very strongly to Latin America, one that has good trade linkages despite the blowback on globalization.”

He pointed to the commercial and residential development boom that has transformed Miami neighborhoods such as Edgewater, Midtown Miami and Wynwood. “When I first started coming to Miami in the late 1990s and early 2000s, we would go to South Beach,” he said. “You were confined to that one part and couldn’t really go anywhere else. Now you have greater opportunity to go out to different parts of the city. That is a testament to the underlying growth.”

Steven Hurwitz, a managing director with JLL’s agency leasing services, said Severino’s forecast is consistent with what he’s seeing in the South Florida office market. “There are so many positive indicators locally,” Hurwitz said. “I would forecast some more moderate growth, but not a major correction.”

Hurwitz also noted the influx of financial services companies relocating from Salt Tax states is creating a more sophisticated, resilient local economy.

“There is optimism,” he said. “There was not a lot of new office in the last five years, which pushed rates up and the vacancy rate down. Now we are in one of those cycles with a large amount of office and we have enough demand to fill it.”


Related Articles

arrow_forward_ios
Clockwise from left: Citigroup Center at at 201 South Biscayne Boulevard, Monarch Alternative Capital CEO Michael Weinstock, Crocker Partners’ Angelo Bianco (Daniel Christensen/Wikipedia, Monarch, Crocker Partners)
Monarch paying $300M for downtown Miami office tower
Monarch paying $300M for downtown Miami office tower
Banyan Street Capital CEO Rudy Prio Touzet and KBS CEO Charles Schreiber Jr. with Weston Corporate Center (KBS)
Banyan Street Capital buys Weston office complex for $52M
Banyan Street Capital buys Weston office complex for $52M
830 Brickell and 401 E Las Olas Blvd (Google Maps)
Lease roundup: Thoma Bravo signs major lease in Brickell & more
Lease roundup: Thoma Bravo signs major lease in Brickell & more
ABS National Business Parks manager Gregg Schenker, Stiles CEO Kenneth Stiles and Garden Plaza in Palm Beach Gardens (CBRE, Stiles, ABS)
Stiles sells Palm Beach Gardens office complex for $31M
Stiles sells Palm Beach Gardens office complex for $31M
Midtown Capital Partners managing partner Alejandro Velez (Cushman & Wakefield, Midtown Capital)
Midtown Capital Partners buys Plantation office building for $78M
Midtown Capital Partners buys Plantation office building for $78M
6303 and 6505 Blue Lagoon Drive with RealOp Investments CEO Reggie Bell (Google Maps, LinkedIn)
RealOp Investments buys Waterford office complex for $110M
RealOp Investments buys Waterford office complex for $110M
Ben Mandell, Scott Sherman and Alex Karakhanian with Cube Wynwd (Tricera)
Tricera, Alex Karakhanian buy Redsky’s Cube Wynwd for $28M
Tricera, Alex Karakhanian buy Redsky’s Cube Wynwd for $28M
Alliance Consolidated executive Ben Reinberg and the Hallandale Beach medical office building (Alliance Consolidated Group of Companies)
Alliance Consolidated sells Hallandale Beach medical office building for $6M
Alliance Consolidated sells Hallandale Beach medical office building for $6M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...