Hanging With Some Very Smart People / Spec Development / Pinball Wizards

This week I sat in a meeting room in North Palm Beach, Florida with some of the industry's best research and Ph.D minds.  The event was the annual meeting of The Hoyt Fellows and The Maury Seldin Advanced Studies Institute.  The wonderful thing about this group is that egos are, pretty much, checked at the door.  There are short presentations on timely topics impacting the global commercial real estate industry and there is as lively a discussion as anywhere I've ever been.  Some of you have heard me say, "You know what happens when two real estate people get together, right?  They're talking or waiting to talk" (Btw, it's not just real estate).  And this group is no exception as everyone has something to say about the topic of the moment.  But that's the beauty of it and, in this group, it manages to work.  Plus, I heard the word 'spec' development uttered for the first time in quite a while referring to new construction industrial buildings being built in the LA market.  

Here are a few of my takeaways from the discussions:

• It's possible that increasing cash flow, expected from core assets, will be offset by increasing cap rates.
• One thing that's debated is the question of investing in a core property vs. a core market
• Apartments:  lowest cap rates in the U.S. are in the San Jose, CA market.
• Retailers are simply chasing population growth.  Here's where they want to be:  Raleigh, Oklahoma City, Denver, Portland (OR), Jacksonville, Sacramento, Tampa and Phoenix.
• Opportunistic plays may surface in some unexpected places:  Atlanta, Dallas/Fort Worth, Indianapolis, Inland Empire, Jacksonville, Las Vegas, Memphis, Phoenix, Portland (OR).
• The Federal Reserve Bank of New York is developing a tool that will analyze every commercial real estate loan made by banks and have the ability to predict the probability of default.
• The opportunities today:  Debt, Distress, Development

And...

• In the next 10 years, of the 10-15 million new households in the U.S.
• recent legal immigrants will account for 1/3
• 3/4 will be minority headed

Things Beyond Business:

-Ron Donahue has a passion for pinball machines.  So much so that he has converted his garage into a virtual arcade (see photo).  He is the Chairman of Hoyt Advisory Services and invited us over the last night.  It was very cool.  While I was never big into pinball games Ron does have Skee Ball, which my friends and I used to play at Fairyland Amusement Park on Queens Boulevard in Rego Park, NY.  He also had two very old baseball machines.  I hadn't had my hands on these type things in a really, really long time.  Standing there took me back to my days growing up and thinking about the friends with whom I shared those innocent days.  

Where the Pinball Wizard Hangs Out

-Rick Wincott is a bass guitar player.  He also is also Senior Executive VP at Altus Group.  In his house, he has a room that houses everything you need for a band to walk in, flip on the switches and rock out.  He's got more than 50 guitars and countless, classic amplifiers, etc.  He's invited me over when I'll be in Houston in the fall.   

Thanks to everybody who attended my 'launch party' in San Francisco.  We had a really nice group, about 25 people, and everybody was engaged with everyone.  A couple of folks totally surprised me by showing up which was very special.  It also is no longer a surprise to me about how small the world is and I'm not just talking about our industry.  We'll do another one of these get-togethers in Chicago one of these days.

I received a number of emails about the mother's day piece I published last week. Thanks, especially those of you who shared your own stories with me.  

Congratulations:  

• Bob White, President of RCA (Real Capital Analytics) who has been named to the Board of Directors of PREA (Pension Real Estate Association)
• Justin Laub who is joining Churchill Capital. 

Providing deeper transparency into the commercial real estate transaction world, RCA and Moody's have announced the launch of the Moody's/RCA Commercial Property Price Indices (CPPI).  These will used advanced repeat-regression analytics to measure price changes in U.S. commercial real estate on five major property types (apartment, retail, industrial, central business district office and suburban office).

On the road...

May 21:  San Francisco to work with a new client.

May 22-25:  Napa, CA to mow the lawn and rake leaves.

May 29-June 8:  New York to work with a new client on improving presentation skills and to attend (a) IMN's U.S. Opportunity & Private Fund Investing Forum where I'll be moderating a panel on GP Mergers  on May 30 & 31 and (b) ULI's Real Estate Capital Markets Conference where I'll be moderating a panel on Launching & Managing a New Real Estate Fund.

June 25-29:  New York to work with a new client on developing a process to raise institutional real estate capital.

Sept. 10-12:  Paris to attend the GRI 

Oct. 14-16:  Houston to provide a class on Improving Presentation Skills to one a new client.

Nov.8-9:  New York to attend the PERE Summit 2012

Mother's Day Regret

My mother and I had, I guess the best way to put it, a strained relationship.  Maybe it was because we were similar but I didn't see that until much later.  

I am the oldest of three boys and she had me just two years after Benjamin Spock published his book, Baby and Child Care.  I don't know for sure, as that book is not one of the ones that I inherited, but it's a good bet that she had it. Spock's simple core message was revolutionary at the time:  "Don't be afraid to trust your own common sense."  Between that and his insistence that parents should show love and affection to their children rather than constant strict discipline, he challenged the conventional wisdom of early 20th century child rearing like no one else.  

One of the reasons I think she had the book is that part about parents showing love and affection to their children rather than strict discipline. Growing up, I was shown love and affection but was not disciplined at all.  I paid a price for this and for many years blamed my parents for not having disciplined me when I was younger.  If I had to guess, they just weren't sure what to do with me (as my middle brother, Jay, has different recollections of growing up than I do).  But, they thought they were doing the right thing.

I grew up in a middle-class family although my mothers' parents felt that they were more high-class, perhaps based on their ability to pay for a pretty lavish wedding in an well-known New York City hotel (I have the receipts and the prices are simply amazing...so much for so little!) and they could afford go away for the whole summer (a modest resort in Morris County, NJ) and they had made the move from Walton Avenue in the Bronx to Haring Street, off 63rd Drive in Rego Park, Queens, New York into a large two-bedroom apartment that they lived in for more than 40 years.  My mothers' father, Herman Silverman, worked in the fur business.  I have some photos of him in the great white north standing around, smoking his cigar and talking with fur trappers.   

My father came from a very, very poor family and I am pretty sure that my mothers' parents were not happy that she fell in love with someone 'beneath them.'  Actually, now that I think of it, I wonder if their divorce, some 30+ years later had anything to do with their basic differences:  my father was ultra-conservative (even when they had the chance to buy Weight Watchers stock as insiders) and my mother was an independent woman, an entrepreneur and a world traveler who ran her own travel agency for many years.

I also had issues with my mother when she turned out to not be the grandmother that she claimed to be.  But, when I got to a stage in my life where I realized I needed to deal with these and other issues, I understood that she was only doing the best she could and she wasn't going to be the person I wanted her to be, just because, and so I decided that I needed to work on accepting her as she was.  

Sadly, that insight came very close to when she got sick and died at 68.  But, although having been distant (philosophically but living physically close), when Jay called from Arizona to tell me she had fallen off a chair and that something was wrong and I needed to go to her aid, of course, I went immediately. She had survived lung cancer a good number of years before and I don't know if she had gone for her six-month checkups religiously.  But, after this event, she deteriorated pretty quickly.  And, as I spent time with her, taking her to doctors, finding someone to come in and watch her (she complained about all of them), I noticed a change in her.  She got nicer.   I didn't realize it then but that was the dementia setting in which was the result of the diagnosis that was confirmed:  brain cancer (although supposedly not connected to her previous cancer).  Some of her comments were funny but the situation was sad.  And, after consulting with a wonderful doctor at one of the top hospitals in New York, we decided to let nature take it's course rather than subject her to chemotherapy.  

At some point, probably about a year before she got sick,  when I had separated from the mother of my sons, living in a basement room of a good friend in Sea Bright, NJ (it actually was a pretty nice room and I learned how to live vertically...needing to stack stuff up rather than spread out), I received an envelope from my mother.  This was, sadly, before I had reached the point of wanting to accept her and reconcile with her.  From my recollection of the feel of the envelope, it was likely a letter of some length. All in all, there are really very few things I regret in my life.  Was it still a leftover from the lack of discipline for which I'd paid a price for many years?  More likely, it was just a stubborn act, a dumb act, done without any thought. I threw the letter out without reading it, without evening opening it.   But, maybe my mother would have understood as she and I shared some personality traits, some good and some harmful to ourselves.  I have always wondered what that letter said.  Sadly, I will never know but I'm pretty sure it had nothing to do with disciplining me.  She would have written about her love for me.

Happy Mother's Day Mom.

Happy Mother's Day to all you Mom's out there, somewhere over the rainbow.

Happy Mother's Day to my mother-in-law who is failing in a hospital in Montreal.

Happy Mother's Day.

My mother, Lorna and me