Friday, May 5, 2017

RCA Capital Trends / The Business of Shopping Centers / Tips from Liz and Steve / What do you remember from growing up?

RCA Capital Trends Report 1Q17
This week Real Capital Analytics (RCA) published their Capital Trends Report for their subscribers.  With their kind permission here are some highlights:

Global commercial real estate investment volume dropped 2% YOY to $271.4b in Q1’17. A 36% YOY increase in development site sales offset a significant decline in income-producing assets, which dropped 19% YOY to total $156.8b.

European investment volume dropped 16% YOY to €53.5b in Q1’17. The decline masks the underlying strength in some of Europe’s biggest real estate markets, however, and Germany continues to be the destination of choice for many 

Investments in Asia Pacific income-producing properties fell 21% YOY in Q1’17 and the quarterly total of $22.6b is the lowest recorded since 2010. Development site sales, by contrast, grew 41% YOY.

Hotel deal volume fell 6% YOY in Q1’17 on sales of $5.8b.
A decline is not normally a good signal in the marketplace
but in this case the decline is far shallower than a year earlier
when volume fell 60% YOY.

Apartment deal volume fell 35% YOY in Q1’17 on sales of $26.0b. This level puts the apartment sector in the #2 slot for investment behind the office sector in Q1’17. The apartment sector posted the sharpest YOY decline in the quarter across all property sectors.

Deal activity in the retail market fell 10% YOY in Q1’17 on sales of $17.6b. Given that deal volume fell at a 23% YOY pace last quarter one might think that this shallower decline is a sign of improvement. There are, however, mixed signals in the marketplace.

Industrial deal volume grew 3% YOY in Q1’17 on sales of $13.9b. Across sectors, industrial was the only one to see growing sales volume. Single asset deal volume grew 15% YOY in Q1’17 on sales of $9.6b and for any first quarter this stands as the record high for single asset industrial deal volume.

Office deal volume fell 12% YOY in Q1’17 on sales of $27.7b.
The drop follows two consecutive quarters in which deal
volume was unchanged from a year earlier. New weakness
in both single asset sales as well as with portfolio and entity
level transactions was the culprit.

The Business of Shopping Centers
For many years I attended the annual ICSC (International Council of Shopping Centers) convention (now called ReCon).  Before that show got so big (like 30,000+), it used to be held in different cities.  I remember one of the last, or maybe the last of those in New Orleans. 

People spent lots of time waiting for elevators in hotels to go up to a company’s suite where they had a meeting planned.   Those days are long gone as well as some of the intimacy of those times.  I haven’t attended the May event in Las Vegas in a number of years.  Each year I’m tempted to go...maybe one of these years.

I have been able to catch up with New York Metro Area shopping center industry friends at the wonderful holiday party thrown by Jerry Welkis, David Sternchuss and Alan Cooperman of Welco Realty.  I always saw the retail industry as part real estate and part theatre and the Las Vegas show has certainly become a huge stage.

Many of you probably know the publication Shopping Center Business.  To me, it has been THE definitive magazine for the retail real estate industry since it’s launch.  When CRE Tech was just beginning to play a role, my friends publishers Jerry and Scott France and editor Randy Shearin encouraged me to write a periodic column called “Tech Window.”  We had fun with it – Scott tried to convince me that I should create a costume of some sort and walk around the ICSC convention as “Tech something-or-other.”

The biggest Shopping Center Business issue of the year is the May issue coinciding with ICSC (I bet most people still ask each other, “Are you going to ICSC?” – meaning ReCon).   I read through the May issue this week and saw a few things.  One, a lot of the firms that I’ve known, or worked for or with, over the years are still around and going strong. And then there are the advertisements. Ads have always intrigued me
and this week I went through all 330 (yes, 330) pages of the May issue and looked at the ‘headlines’ or ‘catch phrases’ in all the ads. 

Here are some interesting, engaging and amusing tag lines (or other lines) that I noticed in ads (mostly the full-page ones) in this issue of Shopping Center Business.  In some ways, don’t you think it sort of conveys what’s going on in the shopping center industry?

“Where Fashion Meets Technology”
“Retail Equity Unscrambled”
“Premier locations in growth markets”
“Preferred locations.  Compelling opportunities.”
“We are the center of retail”
“Now trending”
“10 years of innovation”
“Re-imagine your big box”
“Stop by with a deal. Stay for table tennis”
“The best retail – from every angle”
“We’re not one to name drop but…”
“Redevelopment stories with happy endings”
“We go the distance”
“Maximizing performance for the world’s top retail brands”
“We INNOVATE because everything is possible”
“We CREATE inspiring spaces and places”
“We DEFINE open air excellence”
“We OBSESS about every detail”
“We PERFORM because we think like owners”
“Turning real estate ideas into reality”
“Developer funding with forward commitment”
“100% Ground Lease Financing”
“Always the right move”
“Great ideas. Solutions that work.”
‘”Better relationships. Better results.”
“Integrity.  It’s the cornerstone of everything we do.”
“Make every day and event.”
“Market knowledge, experience and financial strength.”
“Grow with us”
“More than bricks. We build cornerstones.”
“Prime space for retail.”
“A history of success. A future of opportunity.”
“Prime retail space is still available.”
“size doesn’t matter. EXPERIENCE DOES”
“The right city at the right time.”
“We are buying”
“How is OUR team different? We are YOUR TEAM”
“Commitment to Environmental Responsibility”
“Centers of Attention”
“Grand Opening May 11-14”

Congratulations to France Media who covers the commercial real estate industry with their publications and conferences. Their InterFace Conference Group is headed by another long-time industry friend – and conference guru – Rich Kelley. Check out all they do here.

A Couple of Presentation Conversation Tips from Liz and Steve.
My partner Liz Weiner and I have just entered our 5th year in business together.  The theme of everything we do:  “It’s not just WHAT you say, but HOW you say it that makes the difference!”

Our clients are almost exclusively companies and individuals in the global commercial / institutional real estate industry (although we have coached one TV personality who is a rising star – and at some point we predict will be a news anchor on a major network – which network, unfortunately will not allow her to give us a testimonial [even though she would be thrilled to]). 

The scope of our work is fairly simple:
  • We deliver customized, interactive, multi-dimensional presentation coaching to real estate investment management teams who are preparing to go on the road to raise institutional real estate capital. 
  • We coach those same type firms and help them prepare for their annual investor conferences.
  • We have run 25 Women’s Leadership Workshops – across the U.S. and in London – women from more than 100 commercial real estate industry firms have attended our workshops.
I would like to take a moment to thank the following firms who have sponsored one or more of our Women’s Leadership Workshops – in support of women in the industry – by donating some amazing conference rooms:
Benson Elliot Capital Management
Clarion Partners
goulston & storrs
Greenhill & Company
Hunton & Williams
Kirkland & Ellis
National Real Estate Advisors
Newmark Grubb Knight Frank (NGKF)
Paladin Realty Partners
Patterson Belknap Webb & Tyler
PM Realty Group (PMRG)
Real Capital Analytics (RCA)
Square Mile Capital
Zeller Realty Group

I would like to share you a few (we’re really big on the #3 as we firmly believe people can only remember 3 things from any presentation) things on which we coach our clients:
1.   Think about any presentation as a conversation.  It will reduce some of your stress
2.   Debrief regularly.  Take 5 minutes after any presentation, meeting, phone call and write down three things: What went well? What didn’t go well? What would you do differently next time? Encourage team members to honestly debrief with each other and keep a record of these notes – it’s very powerful.
3.   Remember: you only get one chance to make a positive first impression.
We’re wrapping up our workshop ‘season’ in a couple of weeks in London and will be announcing our fall workshop schedule shortly.

Thank you to everyone for your enthusiastic support.  Liz and I greatly appreciate it!

What do you remember from growing up?
If you haven’t done so already, you might want to think about jotting down some of your childhood memories…just for posterity.  I’m not talking about writing a ‘book.’  Rather, brief anecdotes that (a) you’d like to remember forever and (b) that you might want to share with others close to you. 

What I do when I remember something that I want to document is just write the ‘headline’ in an email to myself:  Ernie Banks sitting next to me on the flight; Question I asked Henry Kissinger at an industry event (and his great answer), interaction with Donald Trump and his then girlfriend, now wife, at a famous Japanese restaurant in NYC.

We all have gems of things that have happened to us…both good and not so good; but I choose to document the good stuff – unless some of the not so good things are helpful for me to remember NOT to do again as I grow up.  Just a thought….

On The Road…
May 17-18: Charlotte, NC to conduct an internal Behavioral Presentation Coaching Workshop for a real estate investment management client.

May 22:  London (UK) to conduct an internal Behavioral Presentation Coaching Workshop for a real estate investment management client.

May 23:  London (UK) to conduct our 26th Commercial Real Estate Women’s Leadership Workshop (Tickets available)

May 24:  London (UK) to conduct our Open-enrollment BehavioralPresentation Coaching Workshop (Tickets available)

May 25 – 26: New York City

June 5-7: (Tentative) Chicago

June 20 – 22:  Asheville, NC to conduct two special sessions for one of our global real estate investment management clients.

August 20 – 31:  Australia.  A birthday present to myself.  My first trip down under prompted by meeting a great band, The Heart Collectors, in Tennessee last year.  I’ll be going to Tyalgum (pop. 300), New South Wales, to attend the O’Heart Festival.  On the trip back I’ve arranged to have an overnight in Sydney and have lined up at least one business meeting there.  I am so looking forward to this trip – no matter how long the flight(s) are!!

Congratulations to my friends…
Joe Azelby who joined Apollo Global Management as Head of Global Real Assets.

Christopher Turner Director who joined Denham Wolf Real Estate Services as Director, Transaction Services

Karen Kasteel, now Vice President of Marketing with Waypoint Residential

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