This week, along with more than 900 of my closest friends, I attended the PREA Fall Conference in Chicago. It's the semi-annual get-together of the institutional real estate world. One smart change this year is that on the first day, after the PREA "official" reception, a number of managers joined forces for an "invitation only" cocktail party (see venue comment below). Heretofore (is that really a word?) there have been several competing cocktail parties with everyone trying to attract the same 34 people (you know who you are!). So, this is sensible and seems to indicate that there is a more collaborative feel these days which also runs to collaboration in taking down deals rather than competing and driving prices up. I hope this is true as I believe that collaboration is the future (along with "Alternate Merge" which I am also a big believer in...and not just on the road).
So what did I take away from the PREA conference?
-Definitely less interest in commingled funds and more towards co-investment & club deals.
-Clear concern about the state of the world economies and politics and their current and future impact
-More 'new' managers getting into the game (these are typical real estate operating companies that have not approached institutional investors about investing with them).
-Still a lot of interest in investing in 'distress' in one way, shape or form
-Valid interest from U.S. institutional investors in investing with established managers in Asia and Europe
-Caution. I wish I could say cautious optimism but I didn't sense too much optimism; sort of a 'what it is, it is' feeling.
-Consensus that we are not out of the woods and uncertainty about when things would start feeling good again
-Desire to keep things simpler rather than more complicated
A good industry friend of mine shared this with me about PREA:
There was a European cloud over the conference and I must say the mood I sensed is “frustrated.” LPs are looking for distributions from older vintage investments, GPs are looking for commitments, and people don’t seem to have much optimism.
How many of you besides me had tears flood their eyes when reading or seeing the murder of animals that had been let loose by their cowardly and warped owner in Ohio this week? The police defended their actions (Don't they always?) I know, some animal rights people said the police had no choice. Sorry. Some local police force who were completely unprepared for anything like this just reveled in being big game hunters for a few moments. Why couldn't all or at least a majority of those animals been tranquilized and saved instead of being killed? In killing those animals, aren't we killing ourselves as well-aren't we all animals, trying to survive on the same planet, bring our off-spring into this crazy world and praying that mankind will not destroy itself? How sad. Who will save our souls? And, how dare that guy that owned these animals...letting them out....dooming them.
"All about Steve:" For those that got my announcement last week or saw the article in PERE about my job situation, I appreciate your support as I received a overwhelming and heartwarming number of emails, wishing me well and offering to help in however they could. At the PREA conference as well, so many people asked me what I was going to do next. I can't tell you how that made me feel. I am thinking about what the next chapter in my career should be, looking at myself and trying, as one friend told me, "to be my own career coach." Part of that exercise is that I'm learning to appreciate myself more. Also, to sit down and make a list of what I'm good at, what I like to do and how to combine those two into making a living. There are a few very interesting conversations I'm having as we speak. But, because this is a very important time in my career and my life ("Is there any other kind," Jack Nicholson would say to me (stolen and adapted from "A Few Good Men.") I want to take my time and do the right thing. I'm looking at another 15 years of full-time work. My father was very proud of working full-time until he was "79 and a half" as he used to tell people. 15 years is still a healthy chunk of time and ideally I'd like to get into something that will take me to 2026! And, be true to myself. Anyway, stay tuned!
Within the past few months (this is all about me right :-) more and more people have been asking me, "So what's up with your music?" The answer is this: After more than two years in the making, our next CD, "Robot Mannequin" will be available before the end of the year. This is another collaboration between my sons and I and an all-star cast of Chicago-based musicians. "What kind of music is it?" Impossible to describe as all songs different!
My good friend, Barbara Fish, is a career counselor based in Toronto. Actually she and I were both summer camp counselors together years ago. Camp counselor/Career counselor. Hmmm, maybe they're connected? Oh well, last week she forward me a piece called The networking gender gap and how to bridge it. While there are few things in life that we can all agree on, I know one of them is that, well, men and women are just plain different. It's part of the attraction (I think). Anyway, here are some snippets from that piece (If you'd like the whole article just email me with the word "Networking" in the subject box).
-Networking observers say that for men, networking is largely about selling themselves or a product, or trading information. They want their conversation to lead to a tangible result, such as a business lead, a sale or an introduction. They get straight to the point.
-Women, on the other hand, will often initiate an exchange with a pleasantry or a compliment (“Love your shoes”) and will converse on a range of subjects, regardless of potential professional benefits. Rather than thinking quid pro quo, they think “How can I help her? How can I connect?” One networking commentator on Linkedin put the difference succinctly: Men “start with a statement of their status ... Women create community.”
-Another key difference is that women use networks for what psychologists call “social comparison,” a process by which we understand ourselves and learn how to behave by comparing our attitudes and behaviors with those of others.
-Sadly, women often don’t take advantage of their ability to connect. Here’s where they can take a lesson from the guys. Whereas men talk matter-of-factly about their accomplishments, women tend to undersell themselves lest they be seen as boastful. Or where a man might bluntly ask, “Could you please introduce me to ... ?” women are so nuanced about asking for assistance that a person whose help they seek might not even realize a request has been made.
Interesting stuff, right?
New: NCREIF Research Center: Jeff Havsy, Director of Research for NCREIF told me that there's a new 'button' on the top right hand side of their home page. This is a new section on the NCREIF website designed to answer a question that was posed by or to Jeff or one of the other members of the staff. One piece that's posted is called Cap Rate: Please Explain! A really good value-add service to the industry.
New Book: Real Estate Mathematics will be published next week by PEI Press. "Real Estate Mathematics is a detailed and practical guide for private real estate fund managers and investors. Edited by David Lynn and Tim Wang of Clarion Partners, this guide features contributions from over 25 leading real estate professionals in the industry today that will shed light on some of the most challenging arithmetical problems that face private real estate today." Congratulation you guys.
Restaurant of the week: Sunda, 110 W. Illinois, Chicago, IL. A multi-manager hosted cocktail party on Monday evening brought me to this place for the first time. When you walk in, the dramatic design suggests an immediate, "Wow." To call it Asian-Fusion is not fair; yes, there is a serious sushi bar but it's also a lot more than just sushi. Actually, just go there. Ask for Nicole who is the Director of Sales and Marketing and enjoy yourself. Oh, did I mention that it's one of the hippest places in Chicago?
Congratulations to my friends Bob Weaver who is joining TPG Capital and Roman Bas who joined The Carlyle Group.
My, and I know the industry's, sincere condolences, to the family of Keith Brown of Klaff Realty in Chicago who passed away recently. Too young. Too soon.
Take care and safe travels.
Steve
Photo: Sign at San Francisco International Airport. I got a kick out of the last item.
On the road....
Nov. 4-11: New York including moderating a panel at the PERE Forum
Nov. 15: San Francisco to moderate a panel for JPMorgan
Jan. 18-20: Laguna Beach, CA to attend the IMN Opportunity and Private Fund Conference
These are my views and not that of my employer.
