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Add Michael W. Brennan to the list of economists with a positive outlook on the economy. Brennan, who is the executive director of the UW-Madison James A. Graaskamp Center for Real Estate, spoke at Insight Publication's InDevelopment event yesterday in Oshkosh. “I have tremendous optimism for the national economy based on the things I've seen as a business person,” Brennan said.
“We have a strong economy, the geo-political conditions are average and relatively calm by historical standards, and real estate fundamentals and a fully functioning capital market means that the outlook for United States' real estate has to be viewed as pretty good.”
Brennan who spoke to developers at InDevelopment in Oshkosh this week, said his one takeaway from the “great recession” is how resilient the U.S. economy is. He reminds us that the only times in history when the American economy has really suffered is when banking is involved.
There’s nothing more important to us than capital markets, he said. “When capital markets disappear, everything else goes away,” Brennan said, “…Including the ability for our tenants to get loans and financing, the ability for us to buy things and refinance things.”
Now, he says, banking is doing extremely well. “Today the world is awash in liquidity. It has been for about a year. There's never been so much equity capital available in the world,” said Brennan one day after returning from the Middle East.
Brennan, who owns 34,000 square feet of industrial space, said the levels of investment money coming into the U.S. have reached historic levels, as world saving levels have increased and opportunities to invest in many areas of the world have decreased. That makes the U.S. a safe haven for worldwide investors looking for yield.
What could derail this economic upswing? Very little, according to Brennan, who predicts a strong economy through 2019. Brennan likes President Donald Trump’s proposals for infrastructure and restructured tax rates are positive for business, but he has some concerns about some of the fights he picks, such as Obamacare repeal, Immigration reform and the cancellation of trade deals, which could have consequences. His only real concerns are the stronger dollar, higher interest rates and a slowing housing market with its long chain of suppliers and manufacturers, which could spell trouble down the road, but not immediately.
ABC of Wisconsin was a sponsor of the InDevelopment event.