Europe’s Economy

Sure, Europe is an ocean away. But if the Europeans can’t work out a solution to their problems—country after country falling victim to bankruptcy along with the euro’s collapse—it could have calamitous effects on the American economy. For one thing, the failure of the euro would hurt U.S. exports, which would ultimately affect jobs, the lifeblood of the rental industry. And the effect on banking could be a “disaster,” according to Ryan Severino, an economist at New York–based Reis. “You’d see bank losses and scarcity of credit and people worried about other institutions.”

The Election

With so much uncertainty and rancor prevalent in American politics, a lot of banks and businesses have put off making decisions until after the 2012 elections in November. While the election itself promises to be hotly contentious, regardless of who wins, there’s a sense that clarity over who will be in power for the next four years will encourage businesses to start hiring and banks to start lending. “A lot of people will be in a holding pattern until they know what the outcome of the election, and what economic policy, will be,” Reis’ Severino says.

GSE Reform

Considering the upcoming election, most people acknowledge that the uncertainty surrounding the two government-sponsored enterprises (GSEs) will continue to linger this year. But Fannie Mae and Freddie Mac’s importance to housing means that even mere murmurs about them could become one of the biggest stories of the year. If there’s a mandate for an explicit wind-down of the two entities at an explicit time, it will be huge news. “Whatever happens to them will be incredibly important,” Reis’ Severino says.


In the multifamily industry, it seems the future of Denver-based Archstone and its 70,000-plus-unit portfolio has been debated for as long as the fate of Fannie and Freddie. Chicago-based ­Equity Residential announced in December that it plans to buy 26.5 percent of the firm, with designs on eventually taking full control of the former REIT. But majority owner Lehman Brothers has the right to match Equity’s offer, leaving Archstone’s future further muddled. “I have a feeling we haven’t seen the last of the bidders on this,” says Doug Bibby, president of the Washington, D.C.–based National Multi Housing Council.


News that unemployment fell to 8.6 percent in November had everyone excited that things may be getting better. While apartment owners shared in that optimism, they’ve enjoyed a pretty good run without great job growth. Nonetheless, if the jobs numbers could climb, it could help the apartment industry even more by increasing the pool of renters. Still, last year was definitely a disappointment, which is why all eyes are on what 2012 may bring. “We were hoping to see 250,000 to 300,000 jobs per month in 2011,” says the National Multi Housing Council’s Bibby. “Instead, we got slightly over 130,000 a month, well short of what we need to provide any momentum to the economy.”