As we travel the U.S. and talk about Emerging Trends in Real Estate 2015, I often ask the panelists and audience what they think will derail the current economic recovery in the U.S. Frequently cited is the volatility and uncertainty in oil prices.

It is hard to pick up a newspaper, scroll through twitter, watch the evening news, or scan your favorite news website without seeing something on the topic of oil. Everyone, it seems, has an opinion of what and when the price of oil will bottom and then stabilize. Just yesterday, Royal Dutch Shell’s CEO said it was impossible to predict when the price will stabilize at his target of $90—refusing to call a bottom—assuring that prices would remain volatile in the near and mid-term. Meanwhile, a prominent Saudi Arabian Prince and one of the biggest oil investors proclaimed that the world would never again see prices in the $100 range. While the drop in oil prices has become a daily (even hourly!) news story, the effects of the drop differ widely based on where you live and how diverse your economy is.

Many energy exporting nations have experienced revenue short falls. Regions that are dependent on the energy industry will soon feel the hurt, as companies begin to cut jobs and budgets. The trickle has already begun, with multinational companies ConocoPhillips and Occidental Petroleum following in the footsteps of Baker Hughes, Schlumberger, and Halliburton in announcing significant budget or job cuts. Right now, though, consumers are rejoicing and treating the lower prices as a “tax break.” Broadly speaking, the drop has been great for the U.S. economy.

Yet for commercial real estate, all sectors are exposed. With sustained prices this low, economies with high concentrations of energy-related jobs will suffer, the question is when. On the other hand, the long business cycle nature of commercial real estate may allow it to come out unscathed if prices stabilize higher in the next year or so. Markets that are diversified and have a commercial base beyond the energy sector (say, tech) are best suited for either scenario.

We look forward to hearing what our speakers and members have to say on this and other market volatility, next week in Paris.

(Photo Credit: CGP Grey Flickr https://www.flickr.com/photos/cgpgrey/)