Friday, August 26, 2011

Deal slowdown, Prequin survey, Alzheimer appeal, Steve Jobs, Gavin Muldoon Felix

With so much tumult in the world these days is it any wonder that commercial real estate transactions are slowing....again?  

RCA reported this week:  Sales of significant commercial property totaled $13.0b in July, roughly the monthly average for the first five months this year, excluding the stand-out June volume. Nevertheless, on a year-over-year basis, the 16% increase in transactions is the lowest recorded since growth turned positive in December 2009, likely reflecting the greater economic turbulence and pullback in CMBS conduit originations that have emerged this summer. The tempering of activity was widespread.  

Also, I found some of the published results of Prequin’s 2Q11 Quarterly pretty interesting and offer them to you here:
  1. Survey of Investment Consultants
    1. more than ⅔ of respondents believe that North America will present the best investment opportunities over the coming 12 months.
    2. Half of respondents believe that Asia, with it’s developing markets, will offer attractive opportunities in the next year, while around one third believe Europe and South America present good prospects.
    3. Asked to rank fund types on a scale of 1-5 (5 being the most attractive):
      1. Opportunistic: 3.7
      2. Distressed private real estate: 3.6
      3. Value add real estate: 3.6
      4. Core-plus: 3.0
      5. Core: 2.6
    4. Key-est issue right now?  Valuation of investments
  2. Fund of Funds
      1. fundraising remains a challenging prospect
      2. fewer funds being launched
        1. targeting less capital
          1. amount of capital raised has fallen dramatically
      3. Strategy demand of investors?
        1. core, debt and distressed strategies
      4. Accessing top-tier funds and global diversification not as compelling as in previous years
        1. investor appetite for fund of funds has declined
          1. number of new investors investing in real estate for the first time via fund of funds has declined

Appeal to help to end Alzheimer’s Disease:
The other day, just after getting off a call with a long-time friend who told me his mother is suffering from Alzheimer’s Disease, I received an email from a very good (and generous) industry friend telling me that her sister and a friend are raising money for the nation’s largest “walk”sponsored by The Alzheimer’s Association to raise awareness and supply funds for Alzheimer care, support and research to take place on October 22, 2011.  I have made a donation and hope you can find it in your heart to donate as well.  I believe that there are not too many of us do not know someone who has this really crummy disease.  Please follow this link .  Every little bit helps.  Thanks a lot.

We are living in a world that has a lot on its’ mind.  Perhaps too much.  And, because of the proliferation of irresponsible media, there are things that should not get ‘air time’ that do.  Why are reality shows so popular?  I believe that, like sports, they are an escape from reality and perhaps they are truly what entertainment is supposed to be....a way for us to detach from the day to day things we have to deal with and transport ourselves into ‘their’ world for 23 minutes.  But I am worried about us as a society.  I am really worried about the world that my grandchildren will inherit.  Will we leave it better than we found it?  I am worried that we won’t.

I just learned that John Ingram died in July.  John had been, for many years, the real estate guy at Marshall's Department Stores.  He also was the Chairman of the ICSC (International Council of Shopping Centers).  John and I got to know each other, not through deals that we made, but through the ICSC.  John was a good man.  He had integrity and a big grin.  He was a class act and a guy who exemplified a real professional.

With Steve Jobs stepping down this week as CEO of Apple there were a number of articles and blog postings , some sounding like obituaries.  I’ve been using a Mac since 1998 and while not a Maciac, I’m glad I made the switch from PC.  I’ve pulled a couple of lines from one of the postings that  I think are particularly  poignant: “He said we will carry our music in one place, and we did. He said we will download our entertainment, and we did...Steve Jobs hasn't merely created technology for us. He has created the way we interact with it, and in so doing he's recreated the way we live.   We've evolved because of Steve Jobs. We see technology the way he sees it, and that's because he, like almost no one else, has always had a unique ability to see the world as we see it.” This guy has changed our world. How many people, in all of history, can we say that about?

Serious sushi of last week:  My ‘special’ sushi place in New York for more than 20 years has been Sushi Zen on 44th Street just west of Sixth Avenue.  And, while other sushi fans have invited me to ‘their special place’ it wasn’t until last week that I ate at a serious contender:  Sushi Yasuda, 204 E. 43rd Street, New York.  (P.S.  If you decide to try it out please invite me :-)

Welcome to the world:  Gavin Muldoon Felix; August 25; 7am; 8.9 lbs; 22 inches!

On the Road:

August 29-September 9:  Northern California
September 11-16:  New York
September 20-21:  Amsterdam to moderate a panel at the PERE Global Forum
September 26-28:  Colorado Springs to attend the NAREIM Executive Officers Meeting
October 4-6:  Las Vegas to be a panelist at CBRE’s Americas Summit on “The Commercial Real Estate Industry of the Future: A 5-10 Year Outlook.”
October 17-19:  Chicago to attend the PREA fall meeting
November 1-4: Washington, DC to attend the CRE Annual convention
November 9-10: New York to moderate a panel at the PERE  Forum-North America
November 17-18:  Frankfurt to moderate a panel at the PERE Forum-Europe

Congratulations to my good friend Gunnar Branson on being named President/CEO of NAREIM (National Association of Real Estate Investment Managers).

These are my views and not that of my employer.

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