A couple of weeks ago, on December 29th, I mentioned my intention to digitize the compilation of Landauer Forecasts pulled together from my files. Today I am uploading four editions covering the 1984 - 1986 publications (we had a mid-year outlook in 1984). These can be found in the Consulting/Landauer pages of this website.
Let me share with you some thoughts about the evolution of the Forecast, about what it taught me about business leadership, and what I observe about changes in real estate as I review these documents from 35 or so years ago.
The experience of scanning the Forecasts brought me back to my original job at Landauer, which I commenced on July 1, 1978. This was supposed to be a 3 day “temp” assignment, but it didn’t exactly go as planned. One of my tasks was running the copy machine in the back office. But, curiosity being what it is, I couldn’t resist reading what I was duplicating. This is what got me “hooked” on real estate. As one of my mentors at Landauer, Ed Madsen, said: “Real estate is less like a subject you learn than it is a disease that you catch. Hugh, it’s clear that you have caught the bug.”
Exactly so, as I scanned the documents I’m posting today I saw some things I’d like to highlight for you.
Just superficially, the simplicity of the presentation is striking. The text of the 1984-1986 publications are literally type-scripts. This was an era before computers had become ubiquitous in business offices. Documents were typed on IBM Selectric keyboards, and saved for revision on “mag cards,” or magnetic memory media. The content was written in long-hand or dictated, transcribed by professional secretaries, and reproduced for publication on the very same Xerox machine I was first tasked with operating.
But although the medium remained constant, the Forecasts already show a commitment to change, to increasing sophistication in bringing content to readers. The first editions were like newsletters. Indeed, John R. White first privately circulated his outlook to Landauer’s key clients at the start of 1983 in just such a form.
The 1984 publications expanded the distribution, with an idea of stimulating critical thinking in the industry more broadly. I’m struck by how, even at the outset, these were not just opinion pieces: on every page there is data to be found, factual information about the economy and the markets that undergirds the outlook and enables the reader to follow John’s logic in forming judgments about what would likely be in store for real estate (and for the nation) in the year ahead.
Yet there is a powerful synoptic view pulling the data together. One of John White’s great strengths, and the reason that is counsel was so widely sought, was his ability to put facts into context. And in that process, John was able to bring clarity to the expected path of the economy and the real estate industry. Even more striking, in my view, was his ability to distinguish how the economic and market cross-currents would have differing results across the property types and the dozens of metro markets from coast to coast. All of this is on display right from the start.
As a business leader, however, John did not seek to make this an “ego project” for his personal points of view. The 1985 edition was the first to be published as a bound document within covers. John attributed the commentary to the experienced judgment of senior professional staff in seven regional offices, supported by the firm’s research team and its databases. A true leader is connected, by definition, to a team and the dedication of that team is enhanced by the acknowledgment of their contributions.
The 1985 edition was the one in which I was first given important responsibilities. I find that my writing style, even then, was finding its voice, one that is recognizable even now. It was not just a stylistic signature, though. In the very first paragraph under Economic Conditions, a concept that I needed to explain and support to John and our executive team is articulated: “economic subsidence, a settling of the components of the economy after 15 years of inflation-driven boom and bust.” The tension between national fiscal and monetary policy, an issue that has never fully relaxed, is discussed and its inhibiting impact on investment decisions recognized.
Looking forward, it was this edition that warned of the danger of increasing moves by Savings and Loan institutions into commercial real estate, saying “S&Ls are simply not staffed to analyze and choose” such investments, giving rise to increasing liabilities. Also, the “significant deterioration in public and private syndications” was underscored. In the subsequent years, those warnings proved well justified, even though in late 1984 (when this forecast was written) real estate seemed to be riding high.
And the 1985 Forecast hinted at “technical measures” that we were developing to enhance the critical analysis of market conditions and outlook Two of those measures - the Office Momentum Index and the Retail Matrix - were unveiled in the 1986 report for the first time. John Bailey, serving as Landauer’s “Managing Director in Charge,” linked my name with John White’s in this year’s introductory letter - a linkage for which I am still grateful.
As computer capabilities became more available in offices, the 1986 edition was the first to include graphics plots drawn directly from personal computers. With this, the ability to provide readership with a visual display of quantitative information (to use Edward R. Tufte’s important phrase) helped give shape to our perspectives. This was not only a communication tool, but an aid to improving the quality of analysis in the first place. We take this for granted today, but immense credit should be given to Landauer’s management leadership in investing in such innovation and in encouraging its public deployment, to the benefit not only of Landauer’s own clientele, but to the industry and even to the firm’s competitors in providing models for emulation.
One important consequence of the innovative indices was to “put a number” on the relative strength of markets and property types. This was not without controversy obviously, for some would be offended by finding their particular real estate areas falling to the bottom of the lists. But I can vividly recall John White articulating the responsibility to bring “bad news” if that was warranted by the facts. At one of the firm’s regular staff meetings, he said directly, “If we have to report uncomfortable conclusions, then so be it. That’s Landauer.”
Such integrity of judgment and courage in communication would prove essential in future Forecasts when storm clouds would gather over the economy and the real estate markets.