Friday, April 22, 2011

RCA Talks About 1Q11/Launch of Privcap/Stuff on Leadership

Real Capital Analytics (RCA) 1Q2011 US Capital Trends were, conveniently for me, just released today.  Here is a little something from each of their subscription reports:

  • Hotels:  Expanding as rapidly as the office sector, sales of significant hotel properties for 1Q2011 jumped 126% year-over-year to $3.6Bn.  This largely reflects full-service transactions and is the second highest quarterly volume since 2Q2008.
  • Industrial:  Sales of significant industrial properties reached $3.2Bn in 1Q2011, a scant 11% edge above the year-earlier quarter.  However, the more active warehouse subtype, with just over two-thirds of total volume, grew roughly three times the rate of the overall industrial sector, off-setting declines in flex sales.
  • Retail:  Spurred by strong growth in strip center transactions and marquee urban storefront deals, 1Q2011 sales of significant retail properties reached $5.8Bn, a 53% gain from the same quarter one year earlier.
  • Apartment:  Sales of significant apartment properties passed $7.7Bn in 1Q2011, improving on volume a year earlier by 47%.  The sector’s gains were dominated by garden apartment sales which jumped 80% year-over-year to $4.7Bn.
  • Office:  Sales of significant office properties passed $10Bn in 1Q2011, up 127% from the same quarter a year earlier.  Leading indicators of activity suggest that the office sector’s exceptional investment recover trend will continue to set the pace for property markets in 2011.  

My thoughts?  We have never before, in all parts of our lives, had more and better information available to us.  Some, like RCA’s stuff, helps us make informed decisions.  As my friend Ted Leary always says, “Read, read, read everything you can get your hands on to help you better understand trends.”  And, while I totally agree with Ted I’ll add one of my own, “Listen, listen, listen to as many industry colleagues, either one-to-one, or at conferences, or webinars or whatever.  Don’t talk.  Just listen.  It’s the way good journalists get their stories although, rather than searching for a headline, you’ll be hearing people talk about what they’re doing and seeing and hearing from which you will gain invaluable knowledge.”  And, if you happen to be at an industry event where Ted is, go up to him, introduce yourself and have a little chat because he is truly one of the industry’s great natural resources.  

David Snow, former Founding Editor of PERE (Private Equity Real Estate) magazine, with whom he remains affiliated as editor at large, has launched a very cool business called Privcap.  It is meant to provide news analysis and commentary on the private capital markets, including real estate.  It will have a beta launch later this year that will include high quality video and podcast programming.  I’m going to keep my eye on this: David is a guy who understands what we need and is going to give it to us.

A few interesting tidbits from ‘The Decisive Eye’ published by Internos Real Investors:

  • The overwhelming talk in the industry is of very few funds achieving first close.  “We’re natural second closers” is often heard.
  • Some managers, worried by the inability, during the recession. of many privately-owned fund managers to prevent their own businesses from failing, have declared a preference for ‘safe’ management teams, belonging to large listed entities, ignoring that research suggests that small teams perform better.
  • At the true bottom of the cycle all real estate investment decisions are inherently safer even as the immediate past makes them feel riskier.
  • The past and coming months seem to be inherently the least risky of periods in which to invest for targeted outperformance.

From an email this week from The Healthy Leader:
When a massive cave-in trapped 33 Chilean miners 2,300 feet underground last August, the prospects for rescue were nil. The foreman in charge, 54-year-old Luis UrzĂșa, shared his men’s mortal predicament, yet he managed to calm them. UrzĂșa steadfastly maintained they would all survive (amazingly enough, they did) and rigorously organized the crew to get through an ordeal that lasted 70 days. One tactic: Shine mining truck headlights at regular intervals to simulate day and night.

What Great Leaders Know
Great leaders know that in moments of darkness, your people will naturally turn to you for hope. Life always brings ups and downs. When your team experiences problems, mistakes or even crises, what will you do? Here, we offer a brief summary of how to lead your team through troubled times:

  • “I didn’t just lose my job—I lost everything. My family, my money, my future. I didn’t have anything to look forward to, but I was still breathing. If you’re still breathing, you can create opportunities for yourself.”
  • Believe. Feel the strength within you. Resolve to share it.Connect. Invite your team to envision a future you all want. Stress that “We are in this together.” Show them your confidence and courage.
  • Trust. See your problems as fixable and success as certain, even before the facts tell you so. Urge your people to trust right along with you.
  • Mobilize. Turn hope into concrete actions. Organize your team’s efforts. Throw yourself fully into the endeavor. Watch for fresh openings. Never stop pushing.
  • Will you be the difference? Whether the situation is a failed project, a lost client, or something far worse—such as the peril those miners faced in Chile—what you do can make all the difference. Remember, when darkness looms, your first job as leader is to cast the light of hope.
  • Ask yourself...When trouble hits, do I accept that it is a natural and unavoidable part of life? Can I gauge and manage my anxiety? The anxiety of my team? When my team feels fear, do I focus them on pursuing what’s possible?

Music of the week.  A close friend forwarded this link to me today.  I share it with you.  In addition to this being one of the great songs and great messages it is a wonderful project. From the award-winning documentary Playing For Change: Peace Through Music it features musicians around the world adding their part to the song as it travelled the globe. (P.S.  While I have only done it a few times, the John Lennon version has been my very own karaoke song). 

When I plan my travel, I sometimes mess up. That's the case this week as I'm sitting in a hotel room in New York having forgotten that it was a long holiday weekend. Maybe you say, "What's wrong with being in New York for the weekend?" Well, nothing, except that I'm by myself. When I was growing up, I was always on the run and it seems like that is in my DNA. But, I remember one time, I was driving somewhere with my father and he noticed that as soon as I get in the car I turn on the radio and listen to music. He said, "You know, being in the car is really good for some quiet time between you and yourself." I've been reminded of his advice recently and am going to use some of this weekend, sans car, for some quiet time between me and myself. And, hopefully, come up with ideas, not necessarily monumental solutions or decisions, but ideas of how I'd like to spend the second half of my lifetime. Yes. Huge. I think about what a good friend told me not that long ago, "Steve, you need to be your own consultant for a change." That is my project for the weekend. I hope you are enjoying your holiday weekend and look forward to seeing you somewhere on the road.

Photo:  In Venice last week seeking the answers to the future of real estate.

On the road....
Apr. 25-27:  New York
May 1-4:  San Diego to attend the CRE (Counselors of Real Estate) Conference
May 9-10:  New York
May 12-14: North Palm Beach, FL for the annual meeting of the Homer Hoyt Fellows.
May 16-17: New York
June 6-10: London to moderate a panel at the PERE Forum-Europe. 

July 12-13: Beverly Hills, CA to attend the NMS Roundtable (Endowments & Foundations)

These are my views and not that of my employer.

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