"Real estate investors are comfortable sitting on the sidelines."
"We're in for a long, cold winter that will last through 2012 into 2013."
"Every recap deal is a nail biter."
"Until the CMBS market stabilizes it's hard for buyers of single assets to see how they will recapitalize somewhere down the road."
"We're selling everything that looks or smells like core."
"The vault has been opened and the 'good stuff' is coming out-quality real estate marked down-good opportunities for the next 3-4 years."
I heard heavyweight members of our industry say these things this week-a combination of optimism and pessimism but what is reality? The audience at the PERE Forum in New York was attentive and engaged. It was great to see so many young real estate professionals in the audience and they were treated to one of the best programs I've seen (or been part of) in years. Kudos to Zoe, Arleen, Nicole and Erik at PERE who pulled the program together. Also, the venue they used was terrific and I highly recommend it (Sentry Centers, 730 Third Avenue, NY. Contact person there is Chris Ryter (firstname.lastname@example.org).
I've mentioned Reutersrealestate.com to you before but got a chance to poke around the site this week. There's a bunch of information including analytics and slides you can use in your own presentations. There are free research reports from some of the top commercial real estate industry service providers. This site is in Beta test mode for now. It's a good time to take advantage of it...and it's free!
Some stuff from The Recovery at a Crossroads piece published this week by Asieh Mansour, Head of Americas Research at CBRE:
-Recent evidence confirms our view that the U.S. will avoid a recession.
-The Canadian domestic economy is performing well. Both business and consumer spending are expected to make modest headway this year.
-The outlook for economic growth in Brazil has downshifted.
Africa. It's a word I've heard several times in the past two weeks in relation to where will the next real estate/infrastructure investing opportunities be. There are certainly some compelling reasons to take a look at Africa as a continent and more specifically certain countries. Like with everything, there will be those who are 'early', just like when any investment market emerges. Think back to when U.S. institutional investors first started going abroad (i.e. Europe). It wasn't that many years ago. But, if we want to live up to our own self-billing as a global industry we need to keep looking for those countries/markets where our capital can both make a difference and can provide a reasonable return on our investments. As many of you know, my only personal experience with Africa was my time in Liberia, now five years ago, working with needy children and experiencing a third-world country, up close and personal, for the first time. But listening to a presentation last week by a firm looking to raise capital for investment in Africa has gotten me thinking.....
On Wednesday, I attended the first American breakfast meeting sponsored by PIE (Property Investor Europe) in New York. Allan Saunderson, the fellow behind this publication and I have known each other a number of years. He's got a good sense of what's going on in the European commercial real estate industry. Due to a prior commitment I could only stay for part of the first panel which included my friends, Lee Neibart (AREA Property Partners) and Bob White (Real Capital Analytics). Bob gave a little overview presentation that fueled the conversation. Here's what I took away:
1. Europe: Better 3Q than expected.
2. Clear investor favorites have emerged: Germany, France, Nordics (Denmark, Finland, Iceland, Norway and Sweden).
3. Cross-border capital is looking at taking on more risk.
4. Industrial and peripherals are offering attractive yields.
5. Trophy retail malls attracting interest as are regional markets in the UK.
6. Europe deal volume is halfway back from 2007 peak; U.S. is nowhere near halfway back.
And a few quotes from others:
1. "Italy is the last country that real estate investors are thinking about today."
2. "The Nordics are considered to be one of the best places to invest."
3. "The personality of equity capital has not changed much over the past five years."
An open letter to presenters of any type:
If you use statistics in your presentation/speech (and this is particularly obvious when you use PPT slides...which as you know from earlier writings I feel is the most abused technology tool known to mankind) please update your information periodically. Making any presentation today, for example, with data from 2008, 2009 is absolutely unacceptable. You owe it to your audience to have current data. Making the excuse, "I've been too busy to update the information" is an insult to the audience. And, as 2010 comes to a close, as soon after year-end as the data in your 'one size fits all' presentation becomes available, you have an obligation to update it. Whether you realize it or not, people in the audience notice it...they won't be as vocal as me, but it doesn't make you look good at all.
Joe Frazier, the former heavyweight champion of the world, died this week at 67. My father's was a boxing family (except for him). A couple of this older brothers not only fought in the streets of Brooklyn and the Lower East Side, they also fought professionally. The one who went the furthest was Harry Felix, the oldest brother, who fought for food money for the family and was at one point a middle-weight contender (before an opponent 'thumbed' his eye and ended his career). Another of my fathers' brothers, Barney, was a referee who officiated a number of major bouts including the first Liston/Clay fight when the title was transferred for the first time to Cassius Clay soon to become Muhammad Ali. My Dad liked watching boxing on TV right up to his death on November 19, 2009. But over the years things had changed in the boxing world (as in all other sports) and he more often than not referred to some of the fighters on TV as 'bums.' That term apparently referred to boxers who were brawlers and not fighters or other definitions of his own creation. During the period when Ali was banned from boxing due to his stand as a conscientious objector during the Vietnam War, he went on a college speaking tour. At that time I was the sports editor of our school weekly newspaper. When he came to our school, I was invited to the press conference held before he spoke to the general audience. I asked him, "Champ, do you think Joe Frazier could ever beat you?" Ali replied, without skipping a beat, "Son, if Frazier even dreamed of beating me, he would wake up apologizing!" Joe Frazier was no bum. Frazier, in his quiet, workmanlike way, brought some class into the ring every time he entered it. He exuded quiet confidence. He was a class act.
OTR news: There have been some people starting to follow OTR on Twitter as well as through the Linkedin.com OTR group. I am trying to increase the number of subscribers. There's a reason behind it but I can't tell you about that just yet. So, if you have had this forwarded to you and are not a subscriber please sign up. Also, if you are so inclined I'd appreciate you sending this to others and asking them to sign up as well. Thanks a lot.
Publishing from somewhere between New York and California in 'The Friendly Skies."
Publishing from somewhere between New York and California in 'The Friendly Skies."
On the road....
Nov. 15: San Francisco to moderate the panel at JPMorgan's "The New Investment Climate: Fostering Transparency from Front to Back Office." It's an important topic and I'm particularly pleased that a good friend, Don Holcher, who spent many years with the City & County of San Francisco Employees Retirement System, is one of the panelists.
Nov. 30-Dec. 2: Chicago to attend NCREIF's Nuts & Bolts of Institutional Real Estate 2.0 program.
Dec. 8-9: Chicago for various meetings.
Dec. 12-16: New York
(On December 12, I invite you to join me at my "Not quite annual, buy your own, commercial real estate holiday drink thing." I'll be at the Russian Vodka Room (north side of 52nd Street near 8th Avenue -small black awning) starting at 6pm. If you're in New York, and have time, please stop by. Last year we had 45 people and while I knew most everyone, I love when I can help bring people together who have never met each other and who work in the same industry. Hope to see you then/there. No RSVP necessary).
Jan. 18-20, 2012: Laguna Beach, CA to attend IMN's Winter Forum on Real Estate Opportunity & Private Fund Investing
Jan. 25, 2012: London to attend the Reuters Real Estate Annual Real Estate Conference and moderate a panel and to visit a good friend who is recovering in a hospital in Geneva.
These are my views and not that of my employer.