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Regional Spotlight: Who’s Afraid of the R-word?

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RISMEDIA, Jan. 30, 2008-(MCT)-The economy may be slowing, but there has been enough sustained growth in areas such as employment and office use that the nation and lower Fairfield County, Connecticut should be able to avoid a recession, a regional real estate expert said yesterday.

Despite a number of large banks such as Citigroup Inc. and JPMorgan Chase & Co. posting huge profit losses this week, Kenneth McCarthy, managing director of research in the New York region for Manhattan-based Cushman & Wakefield, said there is enough positive data that suggest the economy could “skirt” a recession.

“While we’ve seen a lot of write-offs, we haven’t seen a lot of layoffs,” McCarthy told about 50 business leaders in a keynote address at the Connecticut Business & Industry Association and the Connecticut Economic Resources Center’s second annual Fairfield County Commercial Real Estate & Economic Outlook conference.

“We will get through this without a recession,” McCarthy added. “We are still seeing growth. It’s slower growth, but it’s still growth.”

The event, held at the University of Connecticut’s Stamford campus, also featured panels of real estate experts and developers to discuss trends in the commercial real estate sector, and ways to make businesses more energy efficient.

Nationally, the country’s Gross Domestic Product, domestic demand and employment numbers continue to grow, albeit at smaller increments compared with a few years ago, McCarthy said.

There is also inconclusive date about the direction of consumer spending “the big gorilla in the economy,” he added.

Retail sales fell 0.4% in December, their first drop since June, a bad omen for a economy teetering on the edge of a recession, but spending also increased by 0.5% in November.

“We need to see more data,” McCarthy said. “There’s no question in my mind that we’re seeing some straining on consumers . . . but we think consumers have enough momentum.”

It’s still too early to tell how bank losses are going to impact lower Fairfield County’s financial services sector, but until there are more significant job losses announced, there probably won’t be a huge dent, McCarthy said.

“Four thousand layoffs in a company of 30,000 is not that huge,” McCarthy said of a Citigroup announcement yesterday.

While uncertainty exists in the nation’s economy, many businesses are still looking for ways to become more energy efficient by adopting Leadership in Energy and Environmental Design standards, which are overseen by the U.S. Green Building Council.

Not only does “going green” save a company on its soaring energy costs, but it also helps reduce employee costs, said Donald Slaght, executive vice president of Workstage, a high performance developer based in Grand Rapids, Mich.

“Your employee retention rate is higher if you have a green building,” Slaght said. “It increases productivity and you can decrease your costs of recruiting.”

Developing a new building under platinum LEED standards — the highest efficiency rating — would only cost about 5 to 6% more compared to a normal building, Slaght said.

At UBS in Stamford, the bank recently made its 1.4 million square foot complex more energy efficient by making improvements in areas like trading floor lighting.

The building was using about 48 million kilowatt hours per year, and was able to save about 4.4 million kilowatt hours annually, said Richard Schroeder, critical systems manager for UBS.

The improvements cost about $2.6 million to implement and the company is getting about $500,000 a year in payback, Schroeder said.

Copyright © 2008, The Stamford Advocate, Conn.
Distributed by McClatchy-Tribune Information Services.

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