Pension Real Estate Association Conference - Boston
As I expected, this week’s PREA conference in Boston was great - and that’s not just my opinion. Many attendees told me it was one of the most productive two days of the year with so many people to talk with in the same location, location, location! It’s been quite some time since I’ve experienced such optimism at an industry event. Commercial real estate is hot! And, as tends to happen in good times, I heard about many job opportunities – head of research, investor relations / marketing specialist and head of asset management, just to name a few.
One subject that surfaced in numerous conversations is the waning appetite for commingled funds and the increasing interest in joint ventures, co-investments and club deals. This got me thinking about how the institutional real estate world has evolved over the course of my career.
When I first started in commercial real estate, insurance companies and banks were strictly lenders. Shortly thereafter, they started buying individual assets directly - all by themselves. Unfortunately, when a downturn hit, valuable lessons were learned. Direct ownership of commercial real estate was not for the faint of heart.
Enter the REIT. These Real Estate Investment Trusts provided liquidity. Popularity of the commingled fund then began growing and, to this day, offers an excellent opportunity for institutional investors, of all sizes, to invest in real estate – without the responsibility of direct ownership.
Institutional investors can learn about both traditional and more creative investment strategies at semi-annual PREA conferences. The networking breaks offer opportunities to begin building relationships that may ultimately lead to an investor making a commitment. Several people told me they embraced the networking concept from last week’s column – approaching and chatting with someone they didn’t know. Following my own advice, I had a conversation with one person in particular, whom I had never met before. This turned into a very lively discussion on presentation and communication challenges – which may prove to be the first step in a mutually beneficial relationship.
PREA’s next major event is September 30 – October 2. If you are looking to immerse yourself in the workings of the institutional real estate world (and rub elbows with many industry influencers) I highly recommend attending. I hope to see you there!
My congratulations go to the three event co-chairs who put together an excellent program: Pat Halter of Principal Global Investors, Allison Yager of Mercer and Gabe Finke of Amstar.
On The Road...
Mar. 24 - 26: Client Meetings, London, UK
Apr. 2 - 3: Client Meetings, Chicago, IL
Apr. 29 - 30: PERE (Private Equity Real Estate) Global Investor Summit, Los Angeles, CA
May 2 - 6: Family visit, Asheville, NC
May 15: Annual meeting of The Hoyt Fellows, North Palm Beach, FL
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