Liberia 2012 / RCA U.S. Capital Trends 1212 / The Final Rippple

Liberia 2012

After traveling for 24 hours, even a pretty resilient traveler can feel a little weary. The scene at baggage claim at the airport in Monrovia, Liberia would have been funny if it were in a Woody Allen movie.  As it was, I just stood back, got banged around a bit and smiled at the craziness but, somehow, in the end, everything all worked out (doesn't it usually if we let it)?   

The MacDella Cooper Foundation Academy (MCFA) is located on secure and beautiful piece of property, six miles from the airport and further from the smoke, smog, noise and bad influences of the city.  

Prior to this government, headed since January 2006 by Her Excellency Ellen Johnson Sirleaf, the first elected female head of state in Africa, the country had barely survived a 10-year civil war fueled by a really bad man who has been convicted by the World Court for crimes against humanity.  But, while resentment coming out of a war can last for generations, the future of any country, of any people, hinges on the ability of it's leadership to inspire and set positive examples for it's citizens, especially the children who are the future. And that is exactly what is going on in Liberia under her presidency.

The academy is made up of two long parallel buildings.  On one side is the dormitory building and the other side the classrooms, office and dining/multi-purpose room.  At one end of the outside "common area" is the water tank tower and pumping station.  This is where the children fill their buckets every evening to carry back with them to their dormitory and take their baths.  

While one of the staff members filled my buckets, I bathed like everyone else:  you have your bucket of pretty much cold water and a scoop.  You stand in a place that has a drain on the floor and you (is this getting into too much detail?) pour the water over yourself…actually iprobably something that the campers amongst you have done many times.  But, it really feels good and I just make believe I'm jumping into a cold lake for a swim. After returning from my trip here six years ago I made a vow to never take the luxury of a hot shower or bath for granted and I never have!  

Monday I got to meet the students, 80 in all, ages 4-13 in classes from K-5.  After MacDella introduced me to each class, the children felt safe and at one point there were about 20 gathered around me outside shaking hands and high-fiving.  Many of the boys have never had an adult male in their lives (or only one that was a poor role model).  One young boy simply wrapped his arms around my legs and held on.  It was both sweet and sad. 

On Monday afternoon I was treated to a special holiday performance by the students which included singing, dancing and some humorous theatrics.  There are a few really talented young people in this group.  

After the generator is turned off around 9:30 pm it's really dark but your eyes get used to it.  I can't describe to you the feeling the other night when I was walking from the dining hall back to my room with the only light guiding my way a bright orange almost half moon.  A quiet voice from one of the dormitories said, "Good Night Mr. Felix."  It was just so sweet. 

On Tuesday and Wednesday, as the 'responsible adults' came one by one to the Academy to pick up their children, the message that Ms. Cooper conveyed to them the night before was clearly present with them:  "When you go home you are an ambassador for the MCF Academy and what you have learned here.  We expect you to behave properly and not slip back into the ways of the street that you grew up around.  You know the right things to do.  Just do them and make us and yourselves proud."  Environment is a powerful drug but while I had only had the chance to spend two full days will all 80 students, I saw the impact of the training that their time at the school has had.  

As the week has gone on, the children have gotten more and more comfortable with me and have been asking me questions and telling me things.  Do you have a family?  What are their names, their ages?  I show them some photos.  How far away is America?  I show them a map.  In just a few days I can see there has been some independent study going on about America in the school library.  Like young people everywhere, these children are sponges.  They hear everything you say.   

Thursday and Friday:  We're staying in a house on the outskirts of the capital city of Monrovia a few days to pick up provisions, run some errands and give the eight students who truly have no parents to go home to a change of scenery.  

Driving in the interminable traffic to take care of a few things in downtown Monrovia, I noticed some real changes.  The main drag, Tubman Boulevard ,was now paved as opposed to being full of shell holes from the war.  New buildings have sprouted up.  The presidential palace is inspiring to say the least.  A couple of new hotels, including at least one luxury resort on the beach have opened.  We drove by the apartment building on 18th street which was our home last time and the 'shanty' residences that had lined the street were all gone.   Billboards tout "Liberia's Top Student" and have other uplifting messages.  But, the dichotomy between the 'norm' and the 'new' is staggering to stay the least.  Change takes time.  Lots of it.  However, like a friend of mine told me years ago, "You don't have to be going straight, just forward!"

MCFA accepts resident students based on a rigorous screening process.  The investment made in each student is not inconsiderable in Liberian terms.  The all-in cost is $2400 per student per year. At this time of year, everybody and their brother is asking you to donate to this, that or the other charity.  So, I'm not going to make a plea here.  But I am going to convey this piece of information:  You can sponsor an individual child at the MCFA for $300 a year!  From what I've seen, professional fund raisers break these type numbers down into things like "You can make a difference in a child's future for less than a dollar a day" or "Instead of going out for one expensive dinner…."  So, I'll just leave it to you, in your own good time, to read about what MCFA does.  While the website is words and pictures, I'm here to tell you that everything stated is real, and good, sincere, committed and passionately executed.  Hey, why don't you come down for a week and see it for yourself?  

Even for a man of many words, the experience of being here is hard to describe.  Perspective is a wonderful thing.  I have also been getting some good introspective time which is much needed at this time.  

RCA U.S. Capital Trends 1212

• Office: While November is a typically slow month for closings, sales of significant office properties totaled $6.9Bn, more than double the volume from a year earlier.
• Apartment:  Falling cap rates in many markets being offset by increased activity in higher-yielding secondary markets.  Markets posting the largest declines in cap rates this year are Boston, Houston, San Francisco, Seattle.
• Retail: The largest sales last month occurred in higher-yielding secondary markets such as Atlanta, Pittsburgh and Portland.
• Industrial: Nationwide cap rates were up 20BPS last month to an average of 7.9%, although this may be more due to the dearth of  recent institutional transactions versus a change in market direction. 
• Hotel: The largest hotel transaction in November was Sahara India Pariwar's acquisition of a 75% interest in The Plaza Hotel in New York that valued the asset at $575MM.

The Final Trippple Rippple 121212

This party is the brainchild of a good friend of mine.  The idea was hatched when she and some of her friends had a New Year's Day brunch at Windows on the World, atop the World Trade Center on 01/01/01.  Each year since then, she organized an event on the Trippple Rippple date.  Some of the themes:  02/02/02 Groundhog Day Bowling; 03/03/03 Ping Pong and Pool; 05/05/05 Margaritas on Cinco de Mayo; 06/06/06 Devil Dogs in Hell's Kitchen; 11/11/11 Rolling 'YO' Eleven; 12/12/12 Cocktails on Little West 12th Street.  Why should kids have all the fun?

Congratulations

• Brad Barsily who has joined Rubenstein Partners.

As John Lennon said, "Happy Christmas."

Long Beach, NY Rebuilds / Don't like it? Change it! / RCA Holiday Party / Seize the Opportunity / LGT Clerestory

Dateline:  Long Beach, New York:  Hurricane Sandy

Hurricane Sandy is no longer news as far as the media goes.  But it is very much with the people of Long Beach, NY.  Wednesday I was allowed back in the building where I had been staying and retrieved my last few remaining belongings including my digital piano (Thanks Hal, for offering me the loan of yours).  The main commercial drag looked sort of normal.  That is until I took a closer look saw that many of the businesses and restaurants are still shut, some looking like they will never reopen. 

As I made my way to the beachfront where I had been living, the damage became more visible.  The boardwalk itself is devastated.  A number of buildings, including one for old, infirm people, have been condemned.  The facing of an apartment building had been torn off.  Piles of ripped out walls, floors, carpeting still dotted the sidewalks.  The encouraging image is of people rebuilding, their residences and their lives.  Piles of fresh plywood, new carpeting, new energy.  Yet, through all this tumult, I passed by the schoolyard of a grammar school and saw dozens of children, at recess, playing. Isn't the sound of children playing special?  In this case, it was a reminder of when things were normal.

If You Don't Like Something, Change It.

This week, 23 boxes of stuff from the house in California that had I lived in for the past 13 years were dropped off at a building in New Jersey.   My sincerest thanks to John Muscarelle of Jos. A. Muscarelle, Inc., who have been developing commercial buildings since 1926, for allowing me to use part of one of their buildings for my boxes and bicycle.  Psychologists point to certain events that can cause stress in one's life: starting a new business: check; relocating: check; selling your home: check; getting divorced: check.  Hey, why not do them all at one time? However, it did start to take it's toll.  Maybe you know the feeling.   But, as Taj Mahal sings in his classic, "Take A Giant Step," "Come with me. Leave your yesterday behind and take a giant step outside your mind." Thankfully, I have some terrific friends who have provided much-needed support and guidance during this time.  I love you guys ("Hoosiers.)"  In the waning days of 2012, I have this feeling that 2013 is going to be a great year...for all of us!

RCA Holiday Party

The Meatpacking District of Manhattan has become 'the' neighborhood of choice for commercial real estate parties.  There is so much energy on the cobblestone streets and in the bars, restaurants and clubs.  How did that area become so cool?  Well, cool people started hanging out there.  Of course, once that happens and everybody and their brother and the tourists find it, the cool people need to find the next cool place, which they keep to themselves for as look as a great secret can be kept!  RCA knows how to throw a party. They were also celebrating the launch of their new CPPI (Commercial Property Price Indices).  I was on their launch webinar the other day and  was blown away by what they have created.  These indices are incredible tools.  They allow you to slice and dice recurring sales data in a gazillion ways.  Hanging and dancing with a bunch of the RCAers and chatting with some people I hadn't seen in a while was very fun.  Everybody was smiling. Isn't that what this time of year is all about?  

Many years ago, perhaps 12, a real estate broker named Larry Ross leased RCA their first space.  It was big enough for three people as that was all RCA needed.  I had become an advisor to Larry's internet start-up Propertyrover.  He introduced me to Bob White, founder of RCA.  When Bob told me what they were doing I (a) knew the industry needed it and (b) had a good feeling about Bob.  The rest, as they say, is history.  I saw Larry last night for the first time in a number of years.  He and his partner, Christen Portelli run a commercial real estate investment sales firm called Highcap Group.  Larry is also into music and mentioned that he continues to listen to my son Brian's band, OM Trio's, first CD, "Clarified Butter".  Larry connecting Bob and I has made a huge difference in both our lives.  

Susan Hudson-Wilson Memorial Music Section

In a Youtube connecting the dots session early Wednesday morning led me to Richard Manuel, the late pianist and vocalist for The Band, singing  "Georgia on My Mind." This haunting and beautiful version is here

Some Opportunities Come Only Once, Seize Them

Joanne Douvas and Tommy Brown launched Clerestory Capital Partners in 2007.  They've raised money and have invested in other underlying funds.  When people try to figure out why a first time fund is able to raise money, Clerestory is an excellent example.  Both Joanne and Tommy had good track records and reputations.  Over the years, they had built trusted relationships with a number of the leading U.S. public pension funds.  A few years back, meeting with one of those pension funds that had invested in Clerestory's first fund I asked, "So, why did you choose to go with them?"  "I like them.  I trust them and I wanted to give them a chance to see what they could do."  So, there you have it. It's that simple, although it's not really.  There was a press release the other day that Clerestory had been acquired by LGT Capital Partners, a Swiss based alternative investment manager.  Without knowing all the details, it's likely that this will give them a bigger platform on which to grow their business.  I say, "Good for them."  They've worked hard at it and, in this case, an opportunity presented itself and they seized the moment.  

Career Coaching Tip of the Week

Last week, a friend wrote telling me he had received a job offer.  "What should I do?", he asked.  I wrote back, "Ask them if they can do any better."  The next day he wrote again.  "They did a little better.  They're sending me the contract."  Even with all the negotiating I've done in my career, many years ago I adopted this simple strategy and more often than not, it works.  Just a parting thought for today.

Congratulations

• George Manthous who has joined Real Capital Analytics (RCA)
• David Lynn on the launch of Lynn Capital Management
• Joanne Douvas and Tommy Brown on the sale of their company, Clerestory to LGT Capital Partners.  The firm is now known as LGT Clerestory

On the road….

Dec. 15-Jan. 3, 2013:  Monrovia, Liberia (West Africa) to work with the students at the MacDella Cooper Foundation Academy and enjoy a special Christmas and New Year.

Jan. 7-9:  Dallas to provide a client with my one day self-improvement workshop series.

Jan. 21-26:  Southern California / LA for client meetings and to attend the IMN Forum on Opportunity and Private Real Estate Investing in Laguna Beach.

Apr. 28-May 1:  New York to attend the CRE (Counselors of Real Estate) mid-year meetings and possibly jam with the CRE band, "Sound Counsel."

June 4-5:  London to attend the PERE Summit-Europe

Errors and Omissions

Sorry to intrude on your Sunday but several errors and omissions were pointed out to me and which deserve immediate attention:

• Jon Dishell who was instrumental in organizing last weeks' NAREIM Capital Raising and Investor Relations Council Meeting works for American Real Estate Partners.  
• Jeff Havsy, Director of Research at NCREIF was inadvertently omitted from the list of Hoyt Fellows.  
• The location to find the sculptures of Bruno Catalano, my "Incredible Artist of the Week" had the wrong address.  The correct address is Galarie Élysées at 104 Central Park South, between 6th and 7th Avenues (closer to 6th) in Manhattan.
• Happy Chanukah to everyone who celebrates  this holiday.

NAREIM Council Meeting / Big News from RCA / Global Women's Partnership / December 7 / A Lucky Boy

NAREIM Capital Raising and Investor Relations Council Meeting

On Tuesday I facilitated a discussion amongst 30 capital raising, marketing and investor relations professionals in Chicago.  While the discussion was conducted under the NAREIM 'Cone of Silence,' what I can share with you is the tone of the session.  Suffice it to say that it was very open dialogue. There were people ranging from very senior and experienced to relative newcomers.  This is part of what made that session special.  No one felt intimated or not at least from what I could feel.  Gunnar Branson, President of NAREIM, has, in a short time, brought new energy and ideas to that organization.  A trusted friend for many years, it's terrific for me to see him flourishing in a job that is not simple (is the job of head of any trade association simple?).  Congratulations Gunnar and also to Jon Dishell of American Realty Partners who was the driving force behind this event.  Special kudos, as well, to Monica Lockhart, NAREIM's Meeting Organizer 

Big News from RCA-Real Capital Analytics 

Real Capital Analytics has announced the RCA Commercial Property Price Indices (RCA CPPI)  which is "a revolutionary suite of more than 200 transaction-based indices using repeat-sales methodology that objectively measure property prices across local, state, regional, and national levels.  Never before has the commercial real estate industry been able to track and measure property prices at such a granular level. This new and exclusive view of commercial property prices at the market level will allow you to objectively measure property prices, better evaluate and manage risk, re-value legacy portfolios and mark assets to market on a frequent basis."  This service is complimentary through January 2013.  RCA is hosting a webinar, featuring RCA Founder and President Bob White on Tuesday, December 11 at 1pm Eastern time.  Register for the webinar here.

A Nice Stroll Through The City

Last Sunday I walked from 56th and 8th Avenue in Manhattan visit my son Kevin's and his family in Brooklyn.  It was a little more than two hours and it was terrific exercise and getting oxygen through my system. New York has so much to see and while walking, especially in neighborhoods and on blocks that I either have never been on or haven't been on for years, is a great way to explore and find new places that you want to go back to shop or eat or drink or play pingpong or catch a show.  At the tail end of the walk and right near the new Barclay's Arena (where the new Brooklyn Nets professional basketball team calls home), I saw a father and daughter, she was probably four, in front of me.  A police officer had told me that Disney on Ice was playing that afternoon. This girl was holding hands with her father and skipping.  When was the last time you skipped down the street, the joy of what you were doing or about to experience simply beyond walking?  What a beautiful thing.  

UNC Kenan-Flagler

The University of North Carolina- Kenan-Flagler team took third place in the 2012 Real Estate Case Challenge hosted by the McCombs School of Business at the University of Texas at Austin. The team members were all second-year MBA students included Brendan McCarthy, Dan Jellicorse, Alex McSpadden, Jessica Fields, Adam Ricketts and Josh Cooke. Dave Hartzell is the coach of this team.  I've known Dave for a good number of years and have driven with him in his car while we've listened to some good ol' rock 'n roll.  He is one of the most passionate, pro-active and supportive academics in the real estate world.  

I had been to this competition some time back and have also attended and been a judge at competitions at UNC and Villanova.  Rest assured, that the next generation of real estate professionals will do us proud, thanks to people like Dave, David Funk, Cornell; Susanne Cannon, DePaul; Dan Kohlhepp, Johns Hopkins; Jeff Fisher, Weimer School; Joe Pagliari, University of Chicago; Hal Smith, Hoyt Group; Norm Miller, University of San Diego; Hugh Kelly, NYU.    

While I'm at it, please allow me to mention some of my fellow Hoyt Fellows whose mission is to bridge the gap between academia and industry:  Mike Acton, AEW; Bob Bach, Newmark Grubb Knight Frank; Brad Case, NAREIT; Blake Eagle, NCREIF; Doug Herzbrun, CBRE Global Investors; Bill Hughes, UBS; Marc Louargand, Saltash Partners; David Lynn; Asieh Mansour, CBRE; Cate Polleys, Hewitt EnnisKnupp; Doug Poutasse, Bentall Kennedy; Jeannette Rice, Verde Realty; Mark Roberts, RREEF; Jon Southard, CBRE Econometric Advisors; Ray Torto, CBRE; Jim Valente, IPD; John Baczewski, Real Estate Fiduciary Services; Chuck DiRocco, PwC; Jacques Gordon, LaSalle Investment Management; Ron Kaiser, Bailard; Mary Ludgin, Heitman; Greg MacKinnon, PREA; Rich Marchitelli, Cushman and Wakefield; Paige Mueller, RCLCO; Hans Nordby, PPR; Jim O'Keefe, UBS; Bill Ramseyer, Cornerstone; Ken Riggs, RERC; Larry Souza, Johnson/Souza Group; Bob White, RCA and Rick Wincott, Altus.  You are making a real positive impact. 

OTR Feedback

"Couldn’t agree with you more about Thanksgiving as a great holiday.  For our family, we generally rank the Fourth of July a slight bit higher if only because the weather is nicer and the food is simpler and it is easier to work off the extra pounds that seem to come with the food.   We love and celebrate them both for exactly the reasons you mention.  With regard the PBGC (Pension Benefit Guaranty Corporation), it is actually funded by insurance payments paid by companies that belong to the plan.  It’s not (yet) taxpayer funded although that may change as more companies drop defined benefit programs (they pay the insurance premiums) and companies follow bankruptcy.  The real taxpayer benefit in this program is that if the court approves the dissolution of a company plan, the insurance program will only pay a maximum of $53,000 per year in benefits.  The highly paid employee takes it on the chin.  That employee (this happened to many pilots) gets a maximum of $53,000.  Now contrast that to state plans (and the Federal government pensions) where all shortfalls are paid by the taxpayers.  That’s the real problem."  Thanks for sharing this with us Bob.

Global Women's Partnership (GWP)

On Wednesday evening a friend and I attended the launch event for a wonderfully purposed organization called the Global Women's Partnership (GWP).  Begun this year by co-founders Rimma Doubinskaia and MacDella Cooper GWP seeks to empower women in the developing world (rural villages, towns and cities) who have limited or no access to the most basic of resources.  GWP plans to accomplish this through Micro-Financing for small business development and sustainability, Occupational Training, Healthcare Access and Education, Aids/HIV Education and Prevention, Family Planning, Adult Literacy and Education and Mentoring.  The turnout for the event was excellent.  A special guest was the Liberian Consul General to the United Nations, Hon. William G. Greaves, Jr. who gave a compelling and heartfelt talk to the assembled group about how it is women who are taking The Republic of Liberia to new levels led and inspired by the only female president in Africa, Her Excellency, Madam Ellen Johnson-Sirleaf.  Monetary donations as well as like kind basics such as deodorant, condoms, lotions, toothbrushes, toothpaste, feminine hygiene products, hand sanitizers are also accepted.  

Having been in Liberia for a month over Christmas/New Years 2006/2007, and witnessed first-hand the conditions at that time, I am very excited to be going back with The MacDella Cooper Foundation from December 15 to January 2, 2013 particularly to see The MCF Academy.  Opened in December 2010 it is dedicated to providing youth, especially orphans and abandoned children, with education and the basic necessities of food, clothing and shelter.  Their mission is simple:  To give as many Liberian children as possible the chance to escape the poverty cycle, to learn and grow in a safe environment, so that they can lead Liberia toward an economically strong and politically stable future. Having seen the hopelessness on the faces of so many children six years ago, I eagerly anticipate a very different scene.  You can donate here to the MCF Academy here.  

Incredible Artist of the Week

If you are in New York or planning a trip please stop by Galerie Élysées, 104 Park Avenue South (just a block west of The Plaza Hotel, which by the way, is undergoing a major reinvent of it's retail space).  Walking by randomly on Wednesday night I was stopped dead in my tracks by a sculpture.  I went in and was shown around by Stephan Varnier.  The artist's name is Bruno Catalano.  Justice cannot be done to his work in words nor can seeing it on the web but if you can't visit, take a look here.  

Life is Short

Some months back, I shared with you a flyer that I was given and that I have now shared with others (and they have shared it too).  It's called The Holstee Manifesto and was written by a few folks at a clothing company.  I read it every morning to remind myself of what really is important to me.  And, as we approach the end of 2012 and the start of 2013 I'd like to share it with you again, 

This is your LIFE.

Do what you love and do it often.

If you don't like something, change it.

If you don't like your job, quit.

If you don't have enough time, stop watching TV.

If you are looking for the love of your life, stop; 

They will be waiting for you when you start doing things you love.

Stop over analyzing.

Live is simple.

All emotions are beautiful.

When you eat, appreciate every last bite.

Open your mind, arms and heart to new things and people,

we are united in our differences.

Ask the next person you see what their passion is and,

share your inspiring dream with them.

Travel often; getting lost will help you find yourself.

Some opportunities only come once, seize them.

Life is about the people you meet, and the things you create with them

so go out and start creating.

Life is short.

Live your dream,

and wear your passion.

Congratulations…

• Gareth Dittmer who has joined Morgan Stanley as Executive Director, Head of Investor Coverage, EMEA.
• Alan Greenwald who has been promoted to Partner at Terra Search Partners.  Alan heads the firm's East Coast office in Washington, DC.
• Max de Groot who has joined SNS Property Finance as Head of Asset & Equity Management for their international real estate portfolio.
• Joseph Stecher on the launch of Candlewood which is making secondary and co-investments.

December 7th

Very shortly after the attack on Pearl Harbor that killed or wounded 3,684 Americans, my father and millions of other young Americans, jammed the Armed Forces offices to enlist in various branches.  Today, we remember those who perished on what President Franklin D. Roosevelt called, "a day that will live in infamy.' How sad war is? "When will we ever learn?" Bob Dylan.

Thank You and a Big Hug...

…to all of you who have reached out to me to, well, to make sure I'm okay.  So, a very brief update:

1.  My house in Napa sold this past Tuesday without a hitch.  Yeah!

2.  I have found an apartment in New York. In the spirit of being a 'lucky boy', as a good friend recently called me:  (1) It was the first apartment I looked at; (2) It is in the perfect location; (4) It's an ideal size for me; (5) The rent is within my budget; (6) Within five minutes after the owner of the apartment and I met we learned we had both grown up in Forest Hills, New York and although 10 years apart and the fact that he and I went to rival Junior High Schools :) we made a connection.  Serendipity.?  Luck?  Something else?  I am truly feeling like a very lucky boy.  Thank you again for all your support, encouragement and emails over the years.  Yes, there's a lot going on but I am very okay!  

On the road….

Dec. 15-Jan.3, 2013:  Liberia with The MacDella Cooper Foundation (MCF) to work with children-at the MCF Academy. 

Jan 8-9:  Dallas for a client event.

Jan. 21-25:  Southern California for meetings and to attend the IMN Winter Forum on Opportunity and Private Real Estate Investing in Laguna Beach.

Feb. 27-Mar.1: Phoenix, Arizona to attend the NCREIF (National Association of Real Estate Investment Fiduciaries) Winter Conference.

Mar. 12-15:  Cannes, France to attend MIPIM.

Apr. 28-May 1:  New York for the CRE (Counselors of Real Estate) Mid-Year Meetings and a possible jam-session with the CRE Band, Sound Counsel.

June 4-5:  London to attend the PERE Summit-Europe

Hurricane Sandy Zydeco Fundraiser / Tishman Speyer Tree-Lighting Party / RCA U.S. Capital Trends / Million Dollar Quartet / Fortune Cookie Fortune

Hurricane Sandy Fundraiser...Tonight

A fundraiser is being held tonight to benefit the victims of Hurricane Sandy.  I've heard that the feature artist, Rosie Ledet and The Zydeco Playboys are amazing!  Opening act:  Actor Michael Cerveris' and his band, Loose Cattle.

What:  Hurricane Sandy Victims Benefit 

When:  November 30, 2012 (That's tonight!)

Where:  Connolly's, 121 West 45th Street (Between 6th and Broadway, 3rd Floor), New York

Doors:  6:30pm for dinner, drinks or socializing and at 7:15pm a Zydeco dance lesson!

Show: 8:00-Midnight

Admission:  $25 

Come on out...I'll buy you a drink!

Tishman Speyer Tree-Lighting Party

One highlight of the week was the Tishman Speyer party at Rockefeller Center for the lighting of the Rockefeller Center Christmas tree.   I ran into a bunch of  former colleagues and industry friends.  The tree is big, bold, bright and beautiful.  Try to see it, even if it's just a drive-by.  

Following that party, a friend and I were hungry and walked over to the Russian Vodka Room for some of their excellent food.  The pianist, who I have gotten to know over the years, wrapped up his evening and I went over to the manager and asked if I could play a little.  It's a big old grand piano with a lot of character. I can't imagine my life without music in it.  Playing the piano has been an outlet for me forever and the times in-between having a piano or keyboard to play have not been easy ones.  Having spent so much time alone, on the road, looking for a random piano in some unused hotel ballroom, it's special to be in a situation like the other night, playing and being able to see a friend, who had never heard me before, across a modestly crowded bar, listening and smiling.  It's really those small moments in life that are the essence.

RCA U.S. Capital Trends-October 2012

Highlight about each property type pulled from this report which was delivered to RCA subscribers the other day:

Hotels:  Nationwide, cap rates for hotels have remained relatively flat in 2012 at an average of 7.7%.

Apartments:  The capital shift to higher yielding markets has caused national cap rates to rise in the mid/high-rise sector, although average yields for garden properties have held firm and changed little over the past six months.

Retail:  While average cap rates on strip centers have fallen to 7.6% nationally, properties with the right anchor and location can command well below that.

Industrial:  Nationally cap rates continue to witness compression and, at an average of 7.6%, have reached lows not seen since late 2008.

Office:  Average cap rates nationally, on CBD (Central Business District) acquisitions, have risen since Q1'12 with fewer trophy sales to pull down the average and more secondary market sales that push the average up.

Fun 

A long time ago, I figured out how to have fun doing almost anything.  It continues to be something that I am able to do.  Yes, there are some things in life that are simply not fun to do but you have to do them anyway.  But those things are in the minority when you look at each day, each week, each month and say, "Did I have fun or what?"  Try it.  It's all in our heads.

Million Dollar Quartet

This Broadway show produced by my friend, Jerry Kattell, is opening at Harrah's in Las Vegas on February 4th for an unlimited run.  I saw it a couple of years ago.  Not only is the music great but it's….fun!  I encourage you to check it out.  

Speed Kills  

That has been a slogan referring to the use of amphetamines for many years.  But I'm beginning to wonder:  are we simply moving too fast for our own good?  My drive to and from New York and Fort Lauderdale last week reminded me of the speed on our highways, regardless of the posted speed limit (I won't even start on the horrible, rude and unsafe and crazy driving I observed so many times).  But I fear that we are moving at warp speed with everything and it just seems like it causes too many mistakes, too many typos, too many acts that require apologies.  As Paul Simon wrote in "Feelin' Groovy."

Slow down, you move too fast

You got to make the morning last

Just kicking down the cobblestones

Looking for fun and feelin' groovy.

Hello lamp-post 

Whatcha knowin'?

I've come to watch your flowers growin'

Ain't cha got no rhymes for me?

Doot-in doo-doo

Feelin' groovy

I've got no deeds to do

No promises to keep

I'm dappled and drowsy 

And ready to sleep

Let the morning time drop all it's petals on me

Life I love you

All is groovy.

Lyrics provided compliments of the Susan Hudson-Wilson Memorial Music Spot

Saying of the Week

"I'm on the back-side of responsibility."  When my friend Gary said these words to me the other night I said, "I have to write that down".  He was referring to a stage that he's gotten to in his life where his children are grown, he's got a good job and he is taking more time to do things that he (and his wife) care about including giving back and paying it forward.  Gary and I have known each other through the industry for a good number of years; more than 10 but not quite 20.  He and I have talked about both business and life.  As with any friendship, the longer you know someone and the more time you spend together, the more you get to know that person's values, passions and dreams.  And, as we've developed our friendship, I've said to myself, "Gee, why didn't we get to know each other better, sooner."  But, as things go in life, they happen when they are supposed to, or at least that's what I believe.  It's never too late for something wonderful to happen. 

Fortune Cookie Fortune of the Week

"If it is meant to be, who are you to change that.  Time to believe it." 

Asset Management Roundtable

Yesterday, my good and great friend, Ed LaGrassa, held his monthly Asset Management Roundtable.  Here are some of the more memorable comments made around that table:

-"My job is not to create disasters, it's to revel in disasters."  Real Estate Attorney

-"The concept of distress is already antiquated."  Broker

-"There are virtually no portfolio loans left to sell in New York."  Broker

-"We're scared of the world."  A broker stating what a wealthy foreign real estate investor said to him talking about why they're investing so much money in NY and London real estate.

-"With all the tumult in the world, New York is seen as a safe haven for real estate investing."

-"Lenders are not scared anymore.  We're not kicking the can down the road anymore and are willing to foreclose, put the property on the market because we're certain we'll do better."  Commercial real estate banker.

Congratulations

Tom Klugerz who joined UBS as Executive Director, Portfolio and Client Services, Global Real Estate-U.S.  

Restaurant of the week

Cassa Nonna, 310 W. 38th St. (Bet. 8th and 9th Avenues), New York.  A very nice room with good food and not too pricey.  

On the road....

Dec. 3-4:  Chicago to attend the NAREIM Capital Raising and Investor Relations Council Meeting

Dec. 5:  Global Women's Partnership (GWP) Holiday Cocktail Party in New York. GWD seeks to empower women in the developing world with limited to no access to basic life-saving resources.

Dec. 13:  Real Capital Analytics Holiday Party, New York (Invitation only).

Dec. 15-Jan.3:  Liberia, West Africa.  Return trip to see the progress made by The MacDella Cooper Foundation and the country in general since my first visit there in 2006.

Jan. 23-25:  Laguna Beach, CA to attend IMN's Tenth Annual Winter Forum on Real Estate Opportunity and Private Fund Investing.

Feb. 27-Mar. 1:  Phoenix, AZ to attend the NCRIEF Winter Conference

Mar. 12-15:  Cannes, France to attend MIPIM.

Apr. 28-May 1:  New York for the CRE (Counselors of Real Estate) Mid-Year Meetings

June 4-5:  London to attend the PERE Summit: Europe

Thanksgiving / Generosity / Largest Cigar Store in the World / Rosie Ledet / Beatnik Terms

Thanksgiving Day has clearly become the true friends and family holiday of the year in America.  This was confirmed by a survey I conducted.  It's sort of perfect. Nothing really to dispute (well almost :-).   No agenda. No religion. Just getting together eating, drinking, watching a football game, playing touch football or tennis or golf or ping pong and celebrating life.   As a holiday, it's  really a celebration of the harvest.  And isn't harvest a wonderful word?  It's even used in the real estate investment world! 

ThisThanksgiving was spent with my cousin Jeffrey Felix and his significant other Nadine in their lovely home on a canal in Fort Lauderdale, FL where I've been chillin' this week.  Amongst their guests were two brothers who create Electronic Dance Music (EDM) and I got an education about that industry.  Funny how similar it sounds to the early days of rock and roll from a business standpoint. Another guest owns a Swedish advertising agency and is really into rock and roll (his sons are the EDM guys) and we shared some good conversation about biographies (One well written:  Steve Jobs.  One too long:  Keith Richards).   One woman used to be in TV show production and worked on some  legendary sitcoms.  Another works for Corum, the Swiss luxury watch maker.  My final conversation of the evening was with a woman who for many years was a flight attendant with TWA airlines who described how things changed there when a corporate raider appeared.  Her pension is being paid by the Pension Guarantee Trust Corporation (which uses our tax dollars).  What's wrong with that picture?  

Early Sunday morning I'll be on the road heading back to New York with a stop in the Daytona Beach area to break bread with my late Dad's wife and visit his grave for the first time since he died in November, 2009.    Waiting for me in New York is a search for an apartment to rent starting December 1.  My searching on Craigslist suggests excellent opportunities within my budget.  Another exciting new start amongst other new starts this year.  

You Guys Are Awesome Section

I have only one word for you:  Thank you...to those of you who donated to Shannon Corey's volunteer mission to help children in two orphanages in Nepal.  She reached her goal! You are one special bunch!

New York-Florida Stopover

Lumberton, North Carolina is a popular stop-over for people driving between South Florida and New York.  The term "Snow Birds" is used for this flock as they leave the "snow" up North in October or November and "fly" (or in this case drive) to Florida for the winter.  

On my drive last weekend I pulled off the highway and stayed overnight in Lumberton as (a) I was getting tired (b) there were many signs on the highway touting hotels, motels and restaurants at Exit 22.  So I did...exit that is.    I got a good last minute deal on a room (by making a reservation online in their lobby!) and then walked next door to eat at an Outback Steakhouse where, taking the last available seat at the bar, I not only had a terrific conversation with an 81 year-old woman and her husband (who have been married 56 years!) but also experienced some excellent customer service.  You never know.

The Largest Cigar Store in the World

Also on the drive down, I was lured off the highway by billboards announcing J-R, The World's Largest Cigar Store which is in Salem, North Carolina.  I wanted to surprise my cigar-smoking cousin and walked into an incredible scene which offered discounts on a huge assortment of items and, yes, what I now believe is the largest cigar store in creation.  The power of billboard advertising has always intrigued me.  In this case, as Dubai has learned, the use of the word "Largest" is something that attracts certain people (although I guess "cigar" probably contributes to the appeal).  

Music Turn-On 

Rosie Ledet...Zydeco Squeezebox player and performer extraordinaire (http://www.youtube.com/watch?v=YhhHJgciKrk)

Word of the Week

"End or The End."  Cousin Jeffrey said that this "Beatnik" term was used by Maynard G. Krebs, the legendary TV sidekick of Dobie Gillis.  It means, like, the most wonderful / the ultimate.  "That's End man."  My search of other Beatnik terms resulted in these:  Cool, Dullsville, Freebee, Groovy, Like Wow, Kookie, Tuned in.

Btw, "Beatnik" grew out of Jack Kerouac's (Author of my favorite book of all time, "On the Road," referring to The Beat Generation).  Also, some of these terms originated in jazz circles. End, man!

On the road....

Nov. 27:  Deloitte 2012 Real Estate Update at 30 Rockefeller Center, New York

Nov. 28:  80th annual Christmas tree lighting party at Rockefeller Center (Thanks to my good friends at Tishman Speyer for the invite).

Dec. 3-4:  Chicago to attend and moderate a workshop at the NAREIM Capital Raising and Investor Relations Council Meeting.

Dec. 5:  Holiday Cocktail Party for the Global Women's Partnership (GWP) at the Park Lane Hotel, New York.  GWP seeks to empower women in the developing world with limited to no access to basic life-saving resources.

Dec. 13:  Real Capital Analytics Holiday Party (Invitation only)

Dec. 15-Jan. 2, 2013:  Liberia, West Africa.  Return to see the progress made since my first visit in 2006 with The MacDella Cooper Foundation.

Jan. 23-25:  Laguna Beach, CA to attend IMN's 10th Annual Winter Forum on Real Estate Opportunity and Private Fund Investing.

Feb. 27-Mar.1:  Phoenix, Arizona to attend the NAREIM Winter Conference

Mar. 12-15:  Cannes, France to attend MIPIM.

Apr. 28-May 1:  CRE (Counselors of Real Estate) Midyear Meetings in New York.

June 4-5:  London to attend the PERE Summit: Europe

Thank You / Phipps Dinner / RCA 3Q Capital Trends Highlights / NCREIF Research Corner / Passion

"Always work like you don't need the money.  Always fall in love like you've never been hurt. always dance like nobody is watching.  And aways-always live like it's heaven on earth."  This wit and wisdom is attributed to Mark Twain. But I read it this week in the 2005 Commencement Address given by Tom Friedman, author and journalist, at Williams College.  

"Your time is limited, so don't waste it living someone eles's life....Don't let the noise of others' opinions drown out your inner voice.  And, most important, have the courage to follow your heart and intuition because they somehow know what you truly want to become.  Everything else is secondary." From a 2005 commencement address given at Stanford University by the late Steve Jobs, CEO of Apple Computer.

These are words, spoken by men who have had something to say during their lives and had an audience to listen to them.  But they are more than just words, they are important concepts which deserve to be considered as the today's of our lives tick away.  

What did you decide you were going to accomplish in 2012?  How much progress have you made?  Did you decide you wanted to improve yourself?  How has that been going?  We are all busy and we do have to make a living to support our lifestyle.  But is that all there is?  How important are the things you have vs. who you are?  How do those people who survived Hurricane Sandy but lost virtually all their belongings feel today?  I suggest that they feel fortunate that it wasn't worse.  Things are just things but lives are what really matters.  

What are you going to do today to give real meaning to your life? Maybe it's simply helping someone else, even in a very small way.  But, as we in the U.S. head into our Thanksgiving celebration, perhaps it's time to really give thanks for what we have:  life, friends, love, food, clothing, shelter.  Is there really anything more important?

Thank you to Judi, Elizabeth, Irwin, Kevin, Marissa, Michael, Rozanne, Jeffrey, Nadine, Bob, Flora, Susan, Corina, Barbara, Brian, Bridget, Stephanie, Nena who have helped me navigate these past few months.  Thank you my OTR family who have reached out to offer help (BTW, an all-cash buyer dropped out of the sky recently and is closing on our Napa Valley house in a few weeks.  How lucky is that?).

3Q2012 RCA U.S. Capital Trends Highlights

Hotel:  Equity funds are the most active investor type accounting for almost a third of total hotel acquisitions.

Apartment: Highest quarterly volume since 4Q2007.

Retail:  The surge of investment in regional malls and and into urban/storefront properties continues to be the highlight throughout the retail sector.

Industrial:  The rise in individual property sales combined with a decline in average cap rate illustrate that the lagging rebound of the industrial sector may be finally catching up to the other property types.

Office:  Early signs point to a strong 4Q, much of it fueled by improving financing conditions and a recent decline in mortgage rates.

Phipps Gala Dinner

On Tuesday evening, seven lovely and fun people joined our host, Gary Koster of Ernst and Young, at the gala dinner celebrating the 40th anniversary of  Phipps NY, the oldest and largest not-for-profit developer, owner and manager of affordable housing in New York City.    

The highlight of the event, held in the grand ballroom of The Waldorf (yes, the same one where the Rock and Roll Hall of Fame Induction event occurs) was the presenting of a special achievement award to Darryl Rattray, Assistant Commissioner of the NYC Department of Youth and Community Development.  

He introduced himself as a "Phipps Kid" having grown up in one of the building complexes built by the company.  This is from the event program.  "Darryl was born and raised in Lambert Houses, a development of Phipps Houses.  A pivotal point in his life was the senseless murder of his childhood friend, Sean Chatman. After the murder, Darryl along with other friends created the Young Hope youth group.  Young Hope became the entry point into the youth and community development organizing field.  The group quickly became a pillar within the neighborhood providing resources and services to the community."  This is one man who has made a difference.  He just decided to do something about something.  We all can.  All we have to do is decide it's something we're passionate about.  

These are the thoughts I jotted down while listening to Daryl: There is nothing stronger than passion, whether it be passion of a feeling of love or passion for what you do-passion helps someone go beyond their formal training in public speaking-believing in what you're doing, speaking from the heart more than the head is incredible to be in the presence of. Darryl had that audience in the palm of his hand.  As he spoke, he looked over from time to time to his colleagues from work and his boss who had nominated him to receive this award.  This was a special moment.  This is the real deal.  The love was so present.  It was beautiful. More than a million dollars was raised at that dinner thanks to firms like Cushman and Wakefield; Eastdil Secured; Ernst and Young; Goldman, Sachs; Hines; J.P. Morgan Asset Management; Jonathan Rose Companies; Related Companies; Tishman Speyer; CBRE; Great Ink Communications.  Perhaps your company would be interested in being a benefactor?  

Takeaways of the Week

• "Turn negative energy into positive action." Phipps Community Development Corporation Team Member
• "I was known for doing the right thing."  Recipient of one of the Phipps Community Builder Awards
• "I'm getting to be more who I am than I ever was."  Dr. Navah Kaplan, PhD, Psychodynamic Pshychotherapist and Psychoanalyst, New York 

NCREIF's Research Corner-November 2012

• Fundamentals:  continued to improve but rate of change slowed.
• Economy/Jobs:  GDP growth in Q3 was surprisingly strong and the housing market continues to offer rays of hope.

Congratulations:

• Cindy Daly who has joined Four Springs Capital Trust (a private REIT) as Director of Acquisitions.
• David Sullivan who joined Precision Capital
• Karen Kasteel who has joined Massey Knakal River Oak

Some random items...

• "Son of A Gun."  A terrific off-off Broadway musical.
• Skendzic Photography.  In the Grand Central Terminal holiday mall.  Check him out. Very cool style.
• Restaurant of the week:  Blue Fin in the W Hotel, 47th and Broadway.  My lunch guest and I both had wonderful dishes.  There is also  live jazz (I got there early and the manager let me play their beautiful grand piano for about half an hour...it felt really good).

Can you help Shannon Corey?

Shannon Corey, a musician friend with a huge heart, needs to raise just a little bit more money to fund her trip to Nepal in January to volunteer to work with children in two orphanages.  She has already raised $1525 but needs $575 more to pay for the flight.  The deadline is next Thursday, November 29th, Thanksgiving Day.  Here's the page to go to (http://helpshannonhelpkids.chipin.com/help-shannon-help-kids-in-nepal).  Any amount will help her reach her goal and live one of her dreams. Thanks. (P.S. Shannon will send you a copy of here new album free as a special thank you for your contribution).

The Handshake

What is it with some men? Recently someone shook hands with me at an industry event. He gripped my hand so hard and shook it so violently that he actually injured my elbow.  What the heck are some men trying to prove? Do you think it impresses people? To be clear-it doesn't and in fact leaves me, anyway, with a really negative impression of you. Think about it.

On the road...

Nov. 17-24:  Driving from New York to Fort Lauderdale, Florida to spend a week with my cousin and clear my head a little. For those unfamiliar with the territory, the drive is only 22 hours and 2 minutes and about 1263 miles.  Compared to driving across country, this is a walk in the park!

Nov. 27:  Deloitte 2012 Real Estate Industry Update, New York at 30 Rockefeller Plaza, New York (yes, that 30 Rock)!.

Nov. 28:  Rockefeller Center, New York to attend the 80th Christmas Tree Lighting Ceremony Party.  Thanks to my good friends at Tishman Speyer for the invite.

Dec. 3-4:  Chicago to attend and moderate a workshop at the first NAREIM Capital Raising and Investor Relations Council Meeting.

Dec.5: Park Lane Hotel, New York for a holiday cocktail party for The Global Women's Partnership which seeks to empower women in the developing world with limited to no access to basic live-saving resources.

Dec. 15-Jan. 3:  Liberia, West Africa.  Going back six years after my first visit with The MacDella Cooper Foundation (MCF) to see first-hand the progress that has been made including the MCF Academy, which opened in 2010.  MCF's mission is simple:  Provide at-risk and vulnerable children with basic human rights:

• Shelter:  A private boarding school
• Nutrition:  Three nourishing meals per day
• Education: An international curriculum
• Security:  A place to call home

Jan. 23-25:  Laguna Beach, CA to attend IMN's 10th Annual Winter Forum on Real Estate Opportunity and Private Fund Investing.  

Mar. 12-15:  Cannes, France to attend MIPIM