PERE America Forum - NYC
About 200 people converged in NYC this week for the PERE America Forum. Having had a relationship with PERE since 2008 it was exciting to see them able to re-launch in person events. The PERE folks did a great job!
One of the wonderful byproducts of attending events, as I’ve shared with you before, is the opportunity to see people you know and also meet people you had not met before. I met and talked with about 20 people who I had not yet met – all passionate about the real estate industry. PERE gave me the opportunity to facilitate a closed-door breakfast conversation with LP’s (Limited Partners – pension funds, family offices, etc.) as well as moderate a panel. The event was also streamed live.
Here are a few of my observations:
- Attendance was about 50/50 female / male
- Quite a few people were mid-level rising stars
- A number are emerging managers (or at least managers who have already emerged but I had not met them before)
- Prominent family offices in attendance
- Single Family Rental (SFR) mentioned almost too many times to count!
Some comments from panelists:
- U.S. investors have pretty much stayed in the U.S. during the past couple of years
- There’s lots of opportunity
- Don’t need to go offshore
- Interested in Logistics in Europe
- Life Sciences in Europe will attract more U.S. investors
- European investors
- Pent-up demand for U.S. Investments
- Core/ Core + / Value add
- Fixed income returns have been low in Europe
- Asian investors
- Like liquidity that U.S. offers
- Residential Build to Rent - headline news / lots of $$$ going towards it
- Easy for institutional sponsors to invest in this
- Industrial: The customer (tenant) is in the lead’ - “All boats rise on a rising ocean”
- 80,000 shortage of delivery drivers in U.S.
- Goods need to be closer to the customer
- “The customer always wants things faster”
- U.S. +/- mid-teens of retail sales
- Other developed countries around the world +/- 30%
- Supply chain interruption - more manufacturing being done in U.S.
- ESG (Environmental, Social, Governance)
- “Kids are pushing for sustainable everything”
- Investors expect managers have a process, substance and commitment to an ESG policy
- Across their business
- Not just ‘checking the box’
- Not just a piece of paper anymore
- ESG Important in EuropeStarting to get more important in U.S.
- “Net Zero” - will continue to come more to U.S.; big in Europe
- Net lease industrial buildings
- They will operate more energy efficient going forward
- ‘Impact Investing’ - onshore manufacturers creating jobs
- Use of Technology
- Valuable for first meetings with potential investors
- Investor can get a broader view of the team from various disciplines / offices
- Helps keep the conversation going
- Due diligence / underwriting assets
- ‘Technology offers better way to do it than with a stack of paper’
Cornell University / Hodes Weill Survey
There was a presentation of results of the Institutional Real Estate Allocations Monitor conducted by Cornell University’s Baker Program in Real Estate and Hodes Weill and Associates.
From the Hodes Weill Website:
The 2021 Allocations Monitor focuses on the role of real estate in institutional portfolios, and the impact of institutional allocation trends on the investment management industry. The 2021 Allocations Monitor includes research collected on a blind basis from 224 institutional investors in 37 countries. The 2021 participants hold total assets under management (“AUM”) exceeding US$13.4 trillion and have portfolio investments in real estate totaling approximately US$1.2 trillion.
Key Findings of Survey
- Institutions remain significantly under-invested relative to target allocations and capital flow to the real estate sector are accelerating
- While growth in target allocations remind moderate year-over-year, institutions expect to increase allocations at a faster pace over the next 12 months (add when survey was conducted)
- Institutional portfolios are under-allocated in real estate by the widest margin over the past 7 years, resulting in an acceleration of capital flows to the sectors
- Portfolio investment returns under-performed long-term targets in 2020; but investors remain optimistic for 2021 as valuation metrics climb to all-time highs
- Investor sentiment increased to a 9=year high, and investors remain bullish about the opportunity to deploy capital
- Higher return value-add and opportunistic strategies remain the strong preference coming out of COVID-19 pandemic, with US-based institutions showing the greatest appetite for risk
- Cross border capital flows remain strong and the percentage of institutions investing outside of their domestic region is on the rise
Thanks again to my friends at PERE for inviting me to attend and participate as facilitator of the Closed-door LP (Limited Partner) breakfast and moderate a panel on How Investors Are Diversifying Their Real Estate Portfolios.
Learn more about upcoming PERE and their upcoming events here
Steinway 9-foot Concert Grand Piano
While I was in Asheville, NC for the Thanksgiving weekend my son Brian took me to his school, University of North Carolina – Asheville, where he is the chair of the music department. I had a chance to play an amazing instrument: Steinway 9-foot Concert Grand Piano! It was an incredible experience. I played a couple of tunes including a song that was written and recorded many, many years ago by my songwriting partner John and me called “Paradise Plainly.” Just writing this now brings up a special feeling. Here’s a photo of me and my new favorite piano!
Steve’s Almost Annual Pizza/Drink Thing
When: Monday, December 13
Where: Joe G’s Restaurant, 244 W. 56th St (bet. B’way and 8th Ave. and downstairs from the DaVinci Hotel)
Time: 6ish to 9ish pm
What: A holiday get together of commercial real estate folks. I don’t ask for RSVPs so don’t know who or how many people will be show up…but I can tell you (as would others who have attended) that big or small it’s always an interesting group – business relationships have been launched there and it’s generally been a very eclectic mix of professionals from all facets of our great industry.
The Deal: You buy your own drinks and I provide the fabulous Joe G pizza (with various toppings of course!) This will be a great opportunity to catch up with old friends, make new ones and share what’s going on in the industry.
Note: NYC COVID guidelines require proof of vaccinations and your ID to attend. I hope you can join me.
Yardi is looking for people
Conversations at industry events result in learning about things like who is looking to hire people. This happened at the PERE America Conference this week.Yardi has a number of openings they’re looking to fill…in various geographic regions. Ideal candidates are people who know both technology and real estate.
Yardi’s theme: Do more with innovative property management software and services for any size business in every real estate market. If you’re considering your next adventure, take a look at their website. If you’re interested, please email me your resume Steve@FelixWeiner.com and I’ll pass it along to the right person at Yardi.
Goldman Sachs is looking for people.
Just had coffee with a friend of mine who told me that there are a bunch of jobs posted on the Goldman Sachs website.
Steve Felix & Friends CD
Some folks have asked me where they can hear my original music. There are two 'albums' posted here.
Note: To listen you don't have to purchase or donate. Thanks for listening!