NeoCon 2010 Update

June 2010 – Charlotte, NC

Traffic and attendance were better than we expected this year in Chicago, and the attendees seemed “ready and anxious” to do more business. Yet, we are now just bouncing off the bottom of this market, with only slight and inconsistent upticks in business.

Job growth and access to capital are the two drivers needed to create sustainable business, and we expect to see both have slow improvement over the next 12-18 months. U.S. government spending remains the one bright spot, but as we see in Europe, governments can’t spend forever without paying the piper. Fiscal moderation and wise spending policies are mandatory if our country and our global partners are to prosper.

We are seeing a blurring of the lines between the residential, hospitality and contract/office sectors, given the similarity of products in public area seating and supply chain management of offshore product flows. These convergences accelerate in difficult times, as companies seek incremental revenues from any source possible. Also, due to the failure or weakness of so many companies and the shortage of financial capital, strong parties are seeking to align themselves with other well- capitalized companies throughout the supply chain. This is Economics 101, where the strong get stronger and the weak fade away.

These trends are driving our merger & acquisition business, as well as our industrial real estate brokerage business. We are merging weak companies into strong ones, divesting surplus factory capacity, and helping opportunistic acquirers find pockets of growth via acquisitions. While valuations are off their peaks of 2007-2008, there is a balanced market of buyers and sellers at reasonable values.

Leadership will be required in these turbulent economic times. One industry veteran outlined the plan for his company; “we will grow in these difficult times by gaining the respect of our employees and our suppliers while building greater trust with our customers.” May we all pursue business with this kind of leadership, passion and integrity.

Please let us know how we can assist you and your company. Also, let us know what you think about our ideas presented in this newsletter. As always, our conversations will be held in the strictest of confidence.