Jones Lang LaSalle
A Monkey Could Do Your Job (A True Story)
Craig Thomas, SVP, Director of Research & Research Systems
cthomas@tortowheatonresearch.com
"A monkey could do your job" is one of those phrases that we all hope we will never hear. Fears of monkey offshoring have produced many a sleepless night for me, as you might imagine. I've always tried to put that inevitability out of my mind, live in the now and count my blessings, but I would be lying to you if I said that my level of anxiety doesn't rise anytime I see a monkey using sign language or riding a tricycle, perhaps in a smart little cowboy outfit, or even when I come across Planet of the Apes while flipping through the channels. Clearly, Dr. Zaius could do a better job of this than I could. Heck, who am I kidding?! Even General Ursus could give me a run for my money!
Well, wouldn't you know, the day I've dreaded all my life came just last week. I was giving a presentation, and despite all of my efforts to appear somewhat intelligent, an astute member of the audience in the back of the room put two and two together and finally blurted out what I had been thinking all these years, "You add no value! A monkey could do your job!"
There it was; the jig was up!
Now, to set the scene, this was a very classy industry affair (whose good name I wouldn't dream of besmirching here, in association with this sordid tale). I would not hesitate to present at another one of its events--assuming the monkey is busy and can't do it (with all sincerity, it is a great organization, a great conference and it was an honor to be there as a presenter). Nor would I choose reveal the identity of the industry heavyweight who made the astute comment, for fear that he would accelerate the process of finding a suitable simian replacement for me. I would like to protect this man's fine name and reputation, so for the purposes of this tale let's just call him Monkeyman.
Now, I knew something was going to happen. I've known of Monkeyman for a decade or so now, and I could see him pacing around the back of the room as he has always done at these events prior to his inevitable outbursts. You can always tell when he's worked up, showing his dominance by snorting, marking his territory at the back of the room, beating his chest and gesticulating wildly. Yes, the silverback has very distinctive behaviors out in the wild, as do the rest of us in reaction to his rituals. I, for one, try not to make eye contact or enter the territory that Monkeyman has marked for himself. Engaging in any conversation can also prove painful and is to be avoided at all cost. The key is to not stand near him at the buffet and to always sit toward the front of the room.
But enough about Monkeyman's odd behavior; let's get to the root of his comments. The presentation I was giving was planned to shed some light on which industries will drive the economy in the near-term outlook. The thrust of my take was that no one has such perfect insight into the future, but if one looks back at the detailed regional and industry data, one might glean some insight. The idea is essentially that if we can identify the strongest industries over the last few cycles and also identify what has driven their expansion, then we can make a fair judgment as to their prospects going forward, and where among the various commercial real estate markets these industries may prosper.
The easiest examples of distinguishing structurally expanding industries versus those whose cycles may be winding down are these two recent stars: housing and healthcare. Both are currently major drivers of commercial real estate absorption. The latter is driven by technological advances and an aging population; this is structural and is likely to have staying power through the near-term outlook. The former is driven by low financing costs and expectations for future appreciation, and is thus likely to wind down through the near-term outlook. One might therefore bet on markets and properties supported by growing healthcare-related industries, while worrying about markets and properties that are linked closely with the housing boom. If you have a very good, detailed database system like ours here at TWR, you can crunch all the numbers and identify opportunities and risks in each and every market.
So that's it; that's all I've got. I am, by nature of my simple take on the world, very reluctant to say that we should all target markets and investments that are big in nanotechnology, I-pod accessories and liquefied coal production, but I am comfortable enough using the available data to reveal where the safe bets are likely to be. I think that's what Monkeyman's issue was all about.
You see, from Monkeyman's perspective, any primate can sift through data. Algorithms can be written, databases can be built, regular outputs can be created and out will pop the data and the answer. So, with a little programming up front, and maybe a behavior-reinforcing system of treats and electrical shocks, one can produce a monkey-driven forecasting process. Okay, fine!--you've got me, Monkeyman. Bring on General Ursus; he can have my office.
I'm just not smart enough to pick up the paper, read the news, circle the next big thing and then turn around and project real estate investment returns based on that. While Monkeyman can apparently rely on news, experience, personal observation, taste and instincts, I'm afraid that I'm a slave to the data. I'll tell you straight out, I wish I had Monkeyman's guts. Purchasing commercial real estate is a serious and long-term investment. If a client's money and welfare are on the line, I just don't feel comfortable going with my gut. I just don't trust my instincts with that kind of responsibility. Let's face it; unless you're smart like Monkeyman, you need that data!
I need it! I need 55,460! I need 150! I need 6.4%! I need 37.1%! I need 80,160! I need 81.2%! I need 31.4%! I would be lost without data. How could I understand Tampa without knowing that over 55 thousand net migrants showed up there in 2004? If we didn't know that, we couldn't grasp what is driving its quick expansion and absorption of real estate. If I didn't know that Chicago's industrial availability rate had dropped by a full 150 basis points since its recent peak, I might conclude that only coastal ports has a chance when it comes warehouse absorption. If I didn't know that a full 6.4% of Minneapolis' employment base was in finance, I might assume that it would behave more like St. Louis or even Toledo. Did you know that the average annual value of existing single-family housing transactions in Riverside over the last few years amounts to 37.1% of the income earned there? That's the highest of any market we cover! Yikes! My gosh, if I didn't know that over 80,000 people in Detroit worked in auto manufacturing, I wouldn't have a clue about what lies ahead for its real estate assets. In addition, if I didn't know that the industrial capacity utilization in the U.S. is 81.2%, I wouldn't know a thing about potential inflationary pressure. And what is the difference between 25.6% and 31.4%? That's the share of population 25 years and older with at least a bachelors degree, in Rhode Island and Connecticut, respectively. That says something about why one is wealthier than the other, and I wouldn't know about that at all unless I had my dirty little secret--I use data to form my thoughts about where the world is going.
So, I really have no defense. The secret is out. Bring on my monkey replacement Monkeyman; I will shift my activities to dancing for nickels in front of taverns--probably a lucrative position here in Boston on St. Patrick's Day--and you've got to strike while the iron is hot when your talents are as limited as mine. Or maybe I'll stick around a while longer and all of us here at TWR will continue trying to coax insights out of our databases; after all, there just might be a few others out there that feel as strongly about careful data analysis as we do. I'm willing to bet that there are more than a few that are just not as gifted as Monkeyman--who are in the same boat as we.
Go to www.tortowheatonresearch.com to register for a free subscription to About Real Estate.
© 2006 Torto Wheaton Research
A Monkey Could Do Your Job (A True Story)
Craig Thomas, SVP, Director of Research & Research Systems
cthomas@tortowheatonresearch.com
"A monkey could do your job" is one of those phrases that we all hope we will never hear. Fears of monkey offshoring have produced many a sleepless night for me, as you might imagine. I've always tried to put that inevitability out of my mind, live in the now and count my blessings, but I would be lying to you if I said that my level of anxiety doesn't rise anytime I see a monkey using sign language or riding a tricycle, perhaps in a smart little cowboy outfit, or even when I come across Planet of the Apes while flipping through the channels. Clearly, Dr. Zaius could do a better job of this than I could. Heck, who am I kidding?! Even General Ursus could give me a run for my money!
Well, wouldn't you know, the day I've dreaded all my life came just last week. I was giving a presentation, and despite all of my efforts to appear somewhat intelligent, an astute member of the audience in the back of the room put two and two together and finally blurted out what I had been thinking all these years, "You add no value! A monkey could do your job!"
There it was; the jig was up!
Now, to set the scene, this was a very classy industry affair (whose good name I wouldn't dream of besmirching here, in association with this sordid tale). I would not hesitate to present at another one of its events--assuming the monkey is busy and can't do it (with all sincerity, it is a great organization, a great conference and it was an honor to be there as a presenter). Nor would I choose reveal the identity of the industry heavyweight who made the astute comment, for fear that he would accelerate the process of finding a suitable simian replacement for me. I would like to protect this man's fine name and reputation, so for the purposes of this tale let's just call him Monkeyman.
Now, I knew something was going to happen. I've known of Monkeyman for a decade or so now, and I could see him pacing around the back of the room as he has always done at these events prior to his inevitable outbursts. You can always tell when he's worked up, showing his dominance by snorting, marking his territory at the back of the room, beating his chest and gesticulating wildly. Yes, the silverback has very distinctive behaviors out in the wild, as do the rest of us in reaction to his rituals. I, for one, try not to make eye contact or enter the territory that Monkeyman has marked for himself. Engaging in any conversation can also prove painful and is to be avoided at all cost. The key is to not stand near him at the buffet and to always sit toward the front of the room.
But enough about Monkeyman's odd behavior; let's get to the root of his comments. The presentation I was giving was planned to shed some light on which industries will drive the economy in the near-term outlook. The thrust of my take was that no one has such perfect insight into the future, but if one looks back at the detailed regional and industry data, one might glean some insight. The idea is essentially that if we can identify the strongest industries over the last few cycles and also identify what has driven their expansion, then we can make a fair judgment as to their prospects going forward, and where among the various commercial real estate markets these industries may prosper.
The easiest examples of distinguishing structurally expanding industries versus those whose cycles may be winding down are these two recent stars: housing and healthcare. Both are currently major drivers of commercial real estate absorption. The latter is driven by technological advances and an aging population; this is structural and is likely to have staying power through the near-term outlook. The former is driven by low financing costs and expectations for future appreciation, and is thus likely to wind down through the near-term outlook. One might therefore bet on markets and properties supported by growing healthcare-related industries, while worrying about markets and properties that are linked closely with the housing boom. If you have a very good, detailed database system like ours here at TWR, you can crunch all the numbers and identify opportunities and risks in each and every market.
So that's it; that's all I've got. I am, by nature of my simple take on the world, very reluctant to say that we should all target markets and investments that are big in nanotechnology, I-pod accessories and liquefied coal production, but I am comfortable enough using the available data to reveal where the safe bets are likely to be. I think that's what Monkeyman's issue was all about.
You see, from Monkeyman's perspective, any primate can sift through data. Algorithms can be written, databases can be built, regular outputs can be created and out will pop the data and the answer. So, with a little programming up front, and maybe a behavior-reinforcing system of treats and electrical shocks, one can produce a monkey-driven forecasting process. Okay, fine!--you've got me, Monkeyman. Bring on General Ursus; he can have my office.
I'm just not smart enough to pick up the paper, read the news, circle the next big thing and then turn around and project real estate investment returns based on that. While Monkeyman can apparently rely on news, experience, personal observation, taste and instincts, I'm afraid that I'm a slave to the data. I'll tell you straight out, I wish I had Monkeyman's guts. Purchasing commercial real estate is a serious and long-term investment. If a client's money and welfare are on the line, I just don't feel comfortable going with my gut. I just don't trust my instincts with that kind of responsibility. Let's face it; unless you're smart like Monkeyman, you need that data!
I need it! I need 55,460! I need 150! I need 6.4%! I need 37.1%! I need 80,160! I need 81.2%! I need 31.4%! I would be lost without data. How could I understand Tampa without knowing that over 55 thousand net migrants showed up there in 2004? If we didn't know that, we couldn't grasp what is driving its quick expansion and absorption of real estate. If I didn't know that Chicago's industrial availability rate had dropped by a full 150 basis points since its recent peak, I might conclude that only coastal ports has a chance when it comes warehouse absorption. If I didn't know that a full 6.4% of Minneapolis' employment base was in finance, I might assume that it would behave more like St. Louis or even Toledo. Did you know that the average annual value of existing single-family housing transactions in Riverside over the last few years amounts to 37.1% of the income earned there? That's the highest of any market we cover! Yikes! My gosh, if I didn't know that over 80,000 people in Detroit worked in auto manufacturing, I wouldn't have a clue about what lies ahead for its real estate assets. In addition, if I didn't know that the industrial capacity utilization in the U.S. is 81.2%, I wouldn't know a thing about potential inflationary pressure. And what is the difference between 25.6% and 31.4%? That's the share of population 25 years and older with at least a bachelors degree, in Rhode Island and Connecticut, respectively. That says something about why one is wealthier than the other, and I wouldn't know about that at all unless I had my dirty little secret--I use data to form my thoughts about where the world is going.
So, I really have no defense. The secret is out. Bring on my monkey replacement Monkeyman; I will shift my activities to dancing for nickels in front of taverns--probably a lucrative position here in Boston on St. Patrick's Day--and you've got to strike while the iron is hot when your talents are as limited as mine. Or maybe I'll stick around a while longer and all of us here at TWR will continue trying to coax insights out of our databases; after all, there just might be a few others out there that feel as strongly about careful data analysis as we do. I'm willing to bet that there are more than a few that are just not as gifted as Monkeyman--who are in the same boat as we.
Go to www.tortowheatonresearch.com to register for a free subscription to About Real Estate.
© 2006 Torto Wheaton Research
posted by Jones Lang LaSalle NJ News Blog at 10:06 AM
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