NAI Global predicts stronger US economy in 2005.

Leading real estate services company NAI Global has issued the annual NAI Global Market Report an resource for comprehensive 'state of the industry' information and detailed trends and forecasts for local, regional and global commercial real estate activity.

The report overviews and ranks top cities in each region based on extensive individual reports from 204 key markets, combining narrative with valuable statistical charts, economic profiles, rental rates, vacancy rates and land prices gathered by NAI field agents from offices throughout the world.

The document also calls upon the expertise of Dr. Peter Linneman, acclaimed real estate analyst, Albert Sussman Professor of Real Estate, Finance and Public Policy at the Wharton School of Business, and head of Linneman Associates, for his keen insights into the market.

Recognized as one of the leading strategic thinkers in the real estate industry, Dr. Linneman co-edits The Wharton Real Estate Review and publishes The Linneman Letter, which forecasts employment growth and examines the influence of macroeconomics on real estate markets.

Dr. Linneman posits in the NAI 2005 Global Market Report, "The headlines in the U.S. warn that the weakening dollar is going to kill the U.S. economy. Yet, in Europe, the cry is that the weakening dollar is going to kill the Euro zone economy. At least one of them must be wrong! In fact, both are wrong.

"The dollar has become massively undervalued relative to the Euro. If you don't believe this, ask yourself which economy do you expect to grow faster over the next four years? Clearly the U.S. will grow faster. Given the fact that the supply of euros and dollars are growing at roughly equal rates, this higher demand growth means a strengthening dollar. The dollar should, and will, be at 1.10 soon enough."

Dr. Linneman notes that during 2004 the corporate sector recorded record-high profits. This, combined with a slowly dropping unemployment rate and sustainable stock pricing, bodes well for the economic future of the U.S. After closely examining workforce statistics, Dr. Linneman predicts 2.1 million new jobs will be created in 2005, with the service-related sector benefiting the most from this growth. He also advises reviewing more than one survey to understand economic facts clearly--for example, a survey of Chicago employers showed only 0.1% job growth, but a survey of Chicago households revealed 2.3% job growth. Linneman cites this example to show the importance of considering all factors when making market predictions.

In Linneman's view, the increase in demand for durable and non-durable goods and the renewed investment in equipment and software are also positive factors. Overall he sees business investment activity on a strong rebound, and concludes regarding the U.S. economic condition: "The moral is that the job market and the economy are moving forward on at least six out of eight cylinders. With an election freshly over and a cabinet reshaping as we write, we look forward to seeing which major social and economic initiatives come to the forefront."