San Diego, Forest Hills, Green Building Consortium

Some of you have written to me asking me, “What’s up with you going back on Linkedin and Facebook?”  Well, in the spirit of full disclosure I’ve back on Linkedin because I found out that there’s a way to shield my contact list (which I had felt was being glommed onto) and second because I’m connecting with people very selectively and will ignore one particular segment of the real estate industry.  Facebook is a different story.  I have no intention on posting anything but will be marketing my new CD called, “Robot Mannequin” this summer and a 14-year old kid told me that “Dude, you have to be on Facebook and Twitter.”  I do have a Twitter account but have never tweeted.  Also, interestingly, a friend of mine in Europe is tweeting things from this column and has more than 100 people following OTR via his tweets!

This week I attended the CRE (Counselors of Real Estate) Mid-Year Meetings in San Diego, CA.  First of all, in the business trips I’ve made into San Diego I had never before been in the Convention Center/Baseball Stadium/Gaslight District.  Wow.  Is it hopping!  As part of the conference I got to go to a Padres/Pirates baseball game and was in the Petco (Where the ‘Healthy’ pets go) stadium for the first time.  While I don’t follow professional sports any longer, I did enjoy being in the ballpark for batting practice (almost caught a ball) and staying through the end of the game, which got exciting in the bottom of the ninth inning.  

 
In the spirit of OTR committed to be your eyes and ears at events I get to attend, here are some of my take-aways from the CRE events:

• Economy will remain sluggish until housing gets back on track….in 2015!
• Blue jeans will cost double what they were last fall-what is the consumers’ ability to deal with this (the cost of goods to the retailer is doubling).
• Big question over the next three years is what curveballs will come out of Washington?
• The big unwritten issue is consumer problems qualifying for mortgages.
• How can we have the best affordability and the lowest home sales of all time?
• 4.5 delinquent homeowners have little prayer of staying homeowners.
• “Keep a close eye on government intervention.”
• Total returns from core real estate remain attractive real returns 5-6%
• Value-add strategies back on investors radar screen
• Recaps of high quality properties considered a smart, opportunistic play
• Consider value-add as core becomes fully priced and opportunities to acquire capital starved assets abound
• The big concern is prices of core properties being bid up.

• Residential (Comments from CIO of large apartment REIT)
• Echo boomers are a key demand driver for apartment rentals
• 20-34 year olds have a 70% propensity to rent
• Multi-family construction being held in check
• “We’re disciplined, well, we’re pretty disciplined in looking at potential acquisitions.”

• Brazil
• Economic stability and growth potential is attracting institutional capital, perhaps too much of it.  
• 30% of the population lives below the poverty line, mainly in Favelas, which are basically shanty towns
• While a lot of real estate investment dollars have been flowing into Brazil there is still a high level of institutionalized corruption and a robust ‘shadow economy.’  
• There is one shopping center for every 500,000 residents whereas in the U.S. there is one shopping center for every 3,300 people!  
• “When you do a development deal in Brazil you have to build in a ‘fudge factor’ because you know you’re going to run into some unexpected problems.  But, you’ll still get great returns so you just build it into the model.”
• “The ship has sailed in Brazil.  Opportunities in South America are elsewhere.”

• Latin America
• Some of the positives in Latin America include:
• Growing middle class, inflation that is under control, healthy banking systems, political stability (Chile, Columbia, Peru) and a similar culture to the U.S. as the roots of many of these people are in Europe.  
• However, there are also some mitigating factors:
• The need for infrastructure, instability in countries such as Argentina, Mexico, Venezuela and Bolivia, a challenging bureaucratic process and lack of transparency all of which necessitate the need for local, in-country partners.  
• Peru is Latin America’s fastest growing economy and offers tax incentives for foreign direct investors.  
• “We believe Columbia is the next Brazil.”
• Guam, yes, Guam
• “If you’re looking for a slow, relaxed pace, consider Guam.
• It’s affordable and easy to understand.  
• The main business now is tourism, especially from Japan with the expectation that Chinese will start traveling to Guam as personal incomes rise there.  A new U.S. Marine base will be a strong catalyst to a growing, but small, economy.
• China
• “Now is not a good time to invest in China but it’s a good time for China to invest in the U.S.”  
• The Chinese economy is in a large way driven by construction but with 65 million, yes, 65, vacant homes will construction continue to support the economy?  
• “There is a demand for low-end housing and there’s a shift from residential to commercial construction.”
• “China is missing middle-market retail.”
• “To do business in China you need a lot of patience,” Bob shared with us.  “The challenge is to look at China, not through the eyes of a politician, but through the eyes of an entrepreneur.  

So that's what I heard there. But a good friend, who is a senior real estate strategist for a global real estate investment management firm and currently based in Hong Kong,  wrote this to me just this morning:

The economic environment couldn't be more different from the US in the region outside of Japan. I heard a comment on Wednesday (from a well known European economist who currently works for a US global bank) that all the previous recoveries from recession in the US had been led by new house building. This recovery is clearly not going to have that engine.

 

Don't believe all you read about vacant dwellings in China. There are a lot but no one knows how many. But most are held deliberately vacant as part of a rational investment strategy. Rental income is very low and the difficulties that tenants can cause make it more sensible to keep the place empty. As Chinese savers have few alternatives, buying residential property continues to be attractive. The Beijing city government is now making purchases more difficult by requiring buyers to show a 5 year tax payment record in the city before being able to buy and some other cities restrict multiple ownership. There is still quite a bit of demand out there. Moreover, there are a lot of different cities and it is dangerous to generalize. The dynamics of the coastal centers, e.g. around Shanghai vs. the inland e.g. Chengdu and Chongqing, are very different. And there are cultural reasons for continued demand, men won't get a wife unless they are a home owner, and the effects of the one child policy gives women extra bargaining power!

Very interesting stuff. 

 

From RCA’s European Capital Trends report released this week:

·       European transaction volumes showed strong improvement through the first quarter of 2011 (Q1’11), with sales of €31.8b marking a 40% year-over-year (yoy) increase and providing for a sixth consecutive quarterly improvement. Increasing volume has not translated into similar gains in prices, as yields have remained relatively stable for the past four quarters.

·       Overall the increase in European activity was slightly greater than the global market, which grew 23% yoy, significantly boosted by strong Americas growth of 75% while being restrained by a slower Asia Pac increase of only 9%. Notably, robust core and struggling peripheral markets are further reflected in investment trends dominating the European marketplace.

Scott Muldavin and I sat together on the flight back from San Diego and talked the entire time.  Many of you know Scott as the highly passionate guy behind the “Green Building Finance Consortium.”  Scott speaks around the world and has published a ‘heavy’ textbook of sorts which can be downloaded from this site.   The Green Building Finance Consortium (GBFC) is a research and education initiative founded and led by Scott to enable better financially based sustainable property decision-making. The Consortium is financed independent of green building product or professional organizations, relying on funding from The Muldavin Company Inc. and Consortium Members. Members are leading real estate companies, governments, non-governmental organizations and industry trade associations including BOMA International, the Mortgage Bankers Association, the Pension Real Estate Association, the National Association of Realtors, and the Urban Land Institute.  For the sake of our children’s children’s children we, as an industry, need to take this stuff much more seriously.

An article in the NY Times yesterday reported that landmark status has been denied to the West Side Tennis Club.  While you may not recognize that name, those of you who either grew up in New York or are tennis players/fans will recognize the location:  Forest Hills, New York.  The courts were the sites of the U.S. Open Tennis Championship for 62 years.  The 15,000 seat center court stadium was also the venue for some historic music:  Simon & Garfunkel (who are from Forest Hills, The Rolling Stones, Elvis Costello, Peter Gabriel, Talking Heads, John Denver, Joni Mitchell, The Who, Bob Dylan (playing one of his early ‘electric’ sets) and, yes, The Beatles.  I grew up in Forest Hills but never saw any of these shows.  Quel dommage!  My aunt Bea and late uncle Len, the chief automotive engineer for Mobil and later a consultant to Nissan, played tennis into their 80’s and attended many matches at the West Side Tennis Club.  I remember they used to bring me souvenirs from time to time:  grass stained white tennis balls that had been used in the matches.  I managed to sneak into the grounds for a number of matches on the field courts, outside the stadium.  On one such occasion, when I was about 12, I had a photo taken with Poncho Gonzalez, the original 100 mph server (with a wooden racquet!) but that photo has been lost for many years.  In those days, before the mega-dollars turned most sports into big business, if there was a questionable call made by a line judge or chair umpire, the player benefiting from that bad call would simply throw the next point away, showing the officials that they had made a terrible call.  Imagine that happening today?  I was recently in Forest Hills for the first time in quite a while when I attended the funeral of my boyhood best friend.  The buildings haven’t changed much over all these years but the uses have.  A religious group now owns the Trylon Theatre; Hollywood Lanes, where we used to go early on Saturday mornings is gone as is Tri-Bowl on 63rd Drive.  Amazingly, the Little League fields on Fleet Street have survived the mid-rise apartment building jungle that has been built up around it.  The baseball field at Forest Hills High School is named after the player that broke the color barrier in the major leagues, Jackie Robinson.  I didn’t get a chance to see if the Pizza Den was still there.  It was a long time ago but they were great days.

On the road....

May 9-10: Cleveland, OH (Going to see the red-hot Indians play on the 10^th)

May 12-14: North Palm Beach, FL for the annual meeting of the Homer Hoyt Fellows

May 16-17: New York

June 1-2: New York to moderate a panel at IMN's Opportunity and Private Funds Forum

June 6-10: London to moderate a panel at the PERE Forum-Europe

June 15-17:  Santa Barbara, CA to attend Opal’s Investment Trends Summit

July 12-13:  Beverly Hills, CA to attend the NMS Roundtable (Endowments & Foundations)

 Photo:  Mother and baby giraffe at the San Diego Zoo.  The father is 17-feet tall and weighs 2.200 lbs!

These are my views and not that of my employer

The Nation's Sentiment, Million Dollar Quartet & Must-Attend Events

Last Saturday I took a long walk in New York on the way to meet a friend for dinner at my new favorite place, Spasso.  A street person was holding a sign.  It said, “Trying to Live.”  It struck me as a very simple yet powerful statement. When I was in Venice recently for the INREV conference some of my European friends said, “Well, it seems like things are much better in the U.S. these days.”  I said, emphatically, “No, they’re not."   Case in point: If things were good or at least better, why would a recent NY Times/CBS poll results show the “Nation’s Mood at Lowest Level in Two Years.  Americans are more pessimistic about the nation’s economic outlook and overall direction than they have been at any time since President Obama’s first two months in office, when the country was still officially ensnared in the Great Recession.”  I bring it up as an example of how something can be misunderstood from a distance.  We only know what we’re told by mass media.  That is, unless we make the effort to go beyond those sources to more reliable authorities, such as the people that are really involved or close to a situation.  That guy with the sign on the street is as close to the situation as is humanly possible. When are we, as a society, going to push our elected officials to really do something to help America and Americans? Who put us in charge of taking care of the world? If we have to spend gazillions of dollars, how about spending them here? On job creation. On education. On cancer research. On Aids research. On affordable housing. When we file our tax returns, why can't we check boxes and tell the government where we want our tax dollars to go and where we don't want them to go? How about that for an idea?

Here’s a link to the 1Q2011 Real Capital Rewind, an audio file where Peter Slatin, Editorial Director interviews Bob White, president and Dan Fasulo, managing director of Real Capital Analytics about what went on in our industry during the first quarter of 2011.

A few doors south of the aforementioned Spasso on Hudson Street, is a small storefront.  I was drawn into it the other night by an intriguing window display.  I walked in and saw books, hardcover books, stacked on tables and filling wall unit shelves.  There were two girls and a guy in the back of the store and as I stood there, trying to figure out what I had wandered into, the guy asked me if I needed any help.  I said, “Give me a minute.”  So, in that minute, I realized that all the books were I-dentical (“My Cousin Vinny”).  It was then that I engaged the young man in conversation.  So, here’s the story.  A guy named Andrew Kessler wrote this book called Martian Summer.  From the website, “Martian Summer is a non-fiction account of author Andrew Kessler’s time spent working on the Phoenix Mars mission. It’s about winning the nerd lottery--getting the most exclusive ticket to work inside mission control for a NASA mission to Mars. The luckiest fan boy in fandom gets a shot to spend three months with unfettered access to mission control--that’s a journalistic first and potential NASA no-no. It’s just your average summer trying to capture the story of 130 of the world’s best planetary scientists exploring the north pole of Mars. It’s a warts-and-all look at the Phoenix Mars mission and NASA’s space narrative from a regular guy who once dreamed of leaving the planet.”  I’m reading it now and it’s very interesting and engaging and Andrew has a great sense of humor.  What I’m writing to you about is his marketing of the book in that storefront.  The landlord, sitting with a vacant store has lent it to him.  He has friends volunteering to work the store.  And, having hundreds of just one book with signs like, "Staff Favorite", well, it’s creative.  After talking with the guy in the store for about 15 minutes I decided to buy a book.  He asked me if I’d like it autographed.  It was then that I realized that I had been talking with Andrew himself.  We continued on for another 15 minutes.  Anyway, if you’re in the neighborhood, stop in.  The display is a trip in itself and while the book is available at bookstores, I like the idea that I gave the money (cash only, thank you) directly to the guy who wrote it.  

There’s a guy named Jerry Katell who has been reading OTR for many years.  He emails me once in a while, commenting on something I've written and telling me where he is ‘on the road’ and, he's in many places.  Jerry has been a successful real estate developer, actor and Broadway show producer.  This week, he graciously invited me to join him to see one of the shows he's produced, Million Dollar Quartet, which is based on a once in a lifetime, random get-together of Elvis Presley, Jerry Lee Lewis, Carl Perkins and Johnny Cash in Sam Phillips’ famous Sun Studios in Memphis in December 1956.  I really liked the show, as did the audience who talked glowingly about it as we all headed out of the theatre.  It’s a really good story and the music is stuff we all know and the players are hot.  The show is also running in Chicago and London and a touring company is just about to hit the road in the U.S.  Jerry is a really interesting and nice guy and it's great that we got to meet through this column. He also mentioned that he and some friends had gone to a very good restaurant in Manhattan called Marea. Coming from Jerry, I'm certain it's a good recommendation. (Btw, Jerry's new show, "Baby It's You", is inspired by the true story of Florence Greenberg, a suburban housewife from New Jersey, who discovered one of the greatest girl groups of all time, The Shirelles, and created Scepter Records, becoming the music industry's first female powerhouse. It opened this week on Broadway.)

A senior Cushman & Wakefield office leasing broker told me that “Office rents in NYC are much stronger much earlier than we expected them to be.”  That sounds good but, as I walk around the city, I still see a whole lot of sizable retail space, some in “100%” locations, vacant. They're located mostly on the street level of office buildings. Over the years, some landlords have considered the street level space as 'the gravy' when it comes to renting the 'bread and butter' office tower above, willing to keep rents high and the space vacant until the next tenant who is willing to pay up comes along. The problem is that retailers can only afford to pay a certain percentage of their gross for rent. My mentor, Dick Steinberg at Mall Properties, taught me this lesson years ago. Okay, shopping malls and centers are different than the retail element of an office tower. But, while it differs from from retail type to retail type, unless someone is looking for a showcase store, where they don't expect to make money but are using it as a billboard for their brand (as many designers and other retailers have done on Madison Avenue and Fifth Avenue over the years), landlords who establish unrealistically high retail occupancy costs will either sit with a vacant store or have a revolving door of tenants. But then again, does what the street level of an office tower looks like adversely affect the ability to lease the office space? Any thoughts? 

Some years back I did an informal survey asking people two questions:  (1)  What industry publication do you feel is a ‘must read?’ and “What industry conferences or event do you feel are ‘must attend?’  And, while I haven’t conducted a formal survey in recent years (btw, if you have time please drop me a note telling me your ‘must read’ and ‘must attend’ and I’ll report the results) when an industry event is celebrating it’s 12th year, there’s something that people want happening there.  And that’s just the case with The 12th Annual IMN Opportunity and Private Fund Investing Forum (boy that’s a long title) that will be happening in New York on June 1 & 2.  I’ve seen the latest attendee list and it’s very strong.  Disclaimer:  I'm moderating a very cool panel at the conference:  LP ASSET ALLOCATION/ROUTES TO MARKET/MANAGER SELECTION.  Joining me on the panel are:  Edgar Alvarado, Head of Real Estate Equity Funds, Allstate Investments, LLC, Alan Snoddy, Senior Vice President, Church Pension Group; Kathy Jassem, Portfolio Manager, State of New Jersey Treasury; Joe Connolly, Treasurer, Norfolk County Retirement System; Claire Woolston, Consultant, New England Pension Consultants; and, Jerry Davis, Chairman, Board of Trustees, New Orleans Employees Retirement System. So, here’s the deal:  OTR people can get a 10% discount off the registration fee.  When you register here, use the discount code (sp10).  And, if you are going to be there please let me know-maybe we get together for a drink. 

Photo: A very clear message in NY.

On the road....

May 1-4:  San Diego to attend the CRE (Counselors of Real Estate) Conference

May 9-10: Cleveland, OH

May 12-14: North Palm Beach, FL for the annual meeting of the Homer Hoyt Fellows

May 16-17: New York

June 1-2: New York to moderate a panel at IMN's Opportunity and Private Funds Forum

June 6-10: London to moderate a panel at the PERE Forum-Europe

June 15-17:  Santa Barbara, CA to attend Opal’s Investment Trends Summit

July 12-13:  Beverly Hills, CA to attend the NMS Roundtable (Endowments & Foundations)

These are my views and not that of my employer.  

RCA Talks About 1Q11/Launch of Privcap/Stuff on Leadership

Real Capital Analytics (RCA) 1Q2011 US Capital Trends were, conveniently for me, just released today.  Here is a little something from each of their subscription reports:

• Hotels:  Expanding as rapidly as the office sector, sales of significant hotel properties for 1Q2011 jumped 126% year-over-year to $3.6Bn.  This largely reflects full-service transactions and is the second highest quarterly volume since 2Q2008.
• Industrial:  Sales of significant industrial properties reached $3.2Bn in 1Q2011, a scant 11% edge above the year-earlier quarter.  However, the more active warehouse subtype, with just over two-thirds of total volume, grew roughly three times the rate of the overall industrial sector, off-setting declines in flex sales.
• Retail:  Spurred by strong growth in strip center transactions and marquee urban storefront deals, 1Q2011 sales of significant retail properties reached $5.8Bn, a 53% gain from the same quarter one year earlier.
• Apartment:  Sales of significant apartment properties passed $7.7Bn in 1Q2011, improving on volume a year earlier by 47%.  The sector’s gains were dominated by garden apartment sales which jumped 80% year-over-year to $4.7Bn.
• Office:  Sales of significant office properties passed $10Bn in 1Q2011, up 127% from the same quarter a year earlier.  Leading indicators of activity suggest that the office sector’s exceptional investment recover trend will continue to set the pace for property markets in 2011.  

My thoughts?  We have never before, in all parts of our lives, had more and better information available to us.  Some, like RCA’s stuff, helps us make informed decisions.  As my friend Ted Leary always says, “Read, read, read everything you can get your hands on to help you better understand trends.”  And, while I totally agree with Ted I’ll add one of my own, “Listen, listen, listen to as many industry colleagues, either one-to-one, or at conferences, or webinars or whatever.  Don’t talk.  Just listen.  It’s the way good journalists get their stories although, rather than searching for a headline, you’ll be hearing people talk about what they’re doing and seeing and hearing from which you will gain invaluable knowledge.”  And, if you happen to be at an industry event where Ted is, go up to him, introduce yourself and have a little chat because he is truly one of the industry’s great natural resources.  


David Snow, former Founding Editor of PERE (Private Equity Real Estate) magazine, with whom he remains affiliated as editor at large, has launched a very cool business called Privcap.  It is meant to provide news analysis and commentary on the private capital markets, including real estate.  It will have a beta launch later this year that will include high quality video and podcast programming.  I’m going to keep my eye on this: David is a guy who understands what we need and is going to give it to us.

A few interesting tidbits from ‘The Decisive Eye’ published by Internos Real Investors:

• The overwhelming talk in the industry is of very few funds achieving first close.  “We’re natural second closers” is often heard.
• Some managers, worried by the inability, during the recession. of many privately-owned fund managers to prevent their own businesses from failing, have declared a preference for ‘safe’ management teams, belonging to large listed entities, ignoring that research suggests that small teams perform better.
• At the true bottom of the cycle all real estate investment decisions are inherently safer even as the immediate past makes them feel riskier.
• The past and coming months seem to be inherently the least risky of periods in which to invest for targeted outperformance.

From an email this week from The Healthy Leader:

When a massive cave-in trapped 33 Chilean miners 2,300 feet underground last August, the prospects for rescue were nil. The foreman in charge, 54-year-old Luis Urzúa, shared his men’s mortal predicament, yet he managed to calm them. Urzúa steadfastly maintained they would all survive (amazingly enough, they did) and rigorously organized the crew to get through an ordeal that lasted 70 days. One tactic: Shine mining truck headlights at regular intervals to simulate day and night.

What Great Leaders Know
Great leaders know that in moments of darkness, your people will naturally turn to you for hope. Life always brings ups and downs. When your team experiences problems, mistakes or even crises, what will you do? Here, we offer a brief summary of how to lead your team through troubled times:

• “I didn’t just lose my job—I lost everything. My family, my money, my future. I didn’t have anything to look forward to, but I was still breathing. If you’re still breathing, you can create opportunities for yourself.”
• Believe. Feel the strength within you. Resolve to share it.Connect. Invite your team to envision a future you all want. Stress that “We are in this together.” Show them your confidence and courage.
• Trust. See your problems as fixable and success as certain, even before the facts tell you so. Urge your people to trust right along with you.
• Mobilize. Turn hope into concrete actions. Organize your team’s efforts. Throw yourself fully into the endeavor. Watch for fresh openings. Never stop pushing.
• Will you be the difference? Whether the situation is a failed project, a lost client, or something far worse—such as the peril those miners faced in Chile—what you do can make all the difference. Remember, when darkness looms, your first job as leader is to cast the light of hope.
• Ask yourself...When trouble hits, do I accept that it is a natural and unavoidable part of life? Can I gauge and manage my anxiety? The anxiety of my team? When my team feels fear, do I focus them on pursuing what’s possible?

Music of the week.  A close friend forwarded this link to me today.  I share it with you.  In addition to this being one of the great songs and great messages it is a wonderful project. From the award-winning documentary Playing For Change: Peace Through Music it features musicians around the world adding their part to the song as it travelled the globe. (P.S.  While I have only done it a few times, the John Lennon version has been my very own karaoke song). 

When I plan my travel, I sometimes mess up. That's the case this week as I'm sitting in a hotel room in New York having forgotten that it was a long holiday weekend. Maybe you say, "What's wrong with being in New York for the weekend?" Well, nothing, except that I'm by myself. When I was growing up, I was always on the run and it seems like that is in my DNA. But, I remember one time, I was driving somewhere with my father and he noticed that as soon as I get in the car I turn on the radio and listen to music. He said, "You know, being in the car is really good for some quiet time between you and yourself." I've been reminded of his advice recently and am going to use some of this weekend, sans car, for some quiet time between me and myself. And, hopefully, come up with ideas, not necessarily monumental solutions or decisions, but ideas of how I'd like to spend the second half of my lifetime. Yes. Huge. I think about what a good friend told me not that long ago, "Steve, you need to be your own consultant for a change." That is my project for the weekend. I hope you are enjoying your holiday weekend and look forward to seeing you somewhere on the road.

Photo:  In Venice last week seeking the answers to the future of real estate.

On the road....
Apr. 25-27:  New York
May 1-4:  San Diego to attend the CRE (Counselors of Real Estate) Conference
May 9-10:  New York
May 12-14: North Palm Beach, FL for the annual meeting of the Homer Hoyt Fellows.
May 16-17: New York
June 6-10: London to moderate a panel at the PERE Forum-Europe. 

July 12-13: Beverly Hills, CA to attend the NMS Roundtable (Endowments & Foundations)

These are my views and not that of my employer.

INREV, The Art of Racing in the Rain, A big bear visits New York

I'm writing to you from Venice just after the conclusion of the INREV Annual Meeting which attracted 340+ delegates with 40% attending an INREV event for the first time.  With 800+ attending the recent PREA Spring Conference there is obviously "something going on here but you don't know what it is, do you Mr. Jones?" ("Ballad of a Thin Man, Bob Dylan).  One possibility is the lure of institutional money to real estate operators but also there were a number of service providers (can you say lawyer?)  There are also more and more placement agents floating around than I've ever seen before-I guess this indicates that private equity real estate firms feel there is opportunity to raise capital from institutional investors and need the help of the agents.  

There were some excellent keynotes and panels and I took some decent notes (too much to publish here) but I'm happy to send the pdf to (steve@simplicate.com).  INREV continues to find special venues for their 'Gala Dinner' on the second night of the conference.  Last night started with a walking tour of Venice which included a visit to The Church of Saint Roch, which is notable for it's Tintoretto paintings.   My dinner table was a wonderful mix of some people I knew, a couple I had met earlier in the day and a couple that I met at the table last night.  We a great time.  I know I must sound like a broken record but one of the treats of attending events is meeting new people, listening to their stories and sharing ideas and challenges with them.  

Here are a few tidbits from the conference to whet your appetite:

It was my first time seeing Nouriel Roubini-Professor of Economics at New York University’s Stern School of Business present in person.  He is excellent.  His talk covered such things as:

• What's going right?
• What could go wrong?
• Problems in the Euro Zone
• Risks in the U.S.
• Japan:  Implications and possible consequences
• Kicking the can down the road.

My friend, Russell Chaplin of Aberdeen Asset Management proposed these ideas:

• This is not a time to do active asset management.
• Have we really learned any lessons?  
• How long will it be before we're back here talking about 'Style Drift?

There were also some interesting results to audience response questions:

Q.  Is Europe more or less attractive than real estate investment opportunities in North America of Asia?

A.  More:  18.1%; Less:  62.7%; About the same:  19.2%

Q.  Which markets do you perceive most promising in the next two years?

Asia:  42.5%

South America:  15.9%

North America:  15%

Europe:  14.2%

Africa:  12.4%

Peter Pereira Gray of The Wellcome Trust gave a very dynamic keynote which included these stimulating thoughts:

• We are now living and will continue to live in an age of responsibility.
• The problem is that too many people are taking things from society that they haven't earned.
• Investors are becoming more sophisticated; Managers have to become more responsible.
• There are advantages to thinking outside of the box.

I am very fortunate to be able to attend conferences like this. I will continue to do my best to provide you with what I hope you find are useful and/or interesting note and quotes.  

Last week at the airport I randomly bought a book called “The Art of Racing in the Rain.”  It’s a beautiful book and I will not ruin it for any that my choose to read it but here are a couple of phrases that I just can’t help sharing with you:
“Can’t we,even just a little, will ourselves to achieve the impossible?  Can we not use the power of our life force to change something; one small thing, one insignificant moment, one breath, one gesture?  Is there nothing we can do to change what is around us?”
“There is no dishonor in losing the race, there is only dishonor in not racing because you are afraid to lose.”

Last item:  While the conference was at a snazzy hotel, I stayed at a bed & breakfast that was about a three minute walk from the venue.  When I booked it on the web there were no photos but I had a feeling.  When I confirmed the day before that I was arriving, the proprietor wrote back saying, "My mother will greet you tomorrow as I am out of town."  So, I rang the bell and heard a voice that I guessed was saying, "Come in."  I walked into the vestibule, looked up the stairs and said, "Mama?".  She smiled.  Doesn't speak hardly any English but there wasn't much need for conversation.  The place is great and an unbelievable bargain.  I guess, taking chances and trusting your gut works more often than not.

I took the photo below early this week. It's of the plaza outside our offices in New York. Here's the story:

Christie's auction house has sold Untitled (Lamp/Bear), a 23-foot (7-meters) outdoor bronze sculpture of a bright yellow teddy bear combined with a giant working table lamp. Widely regarded as the most

important and the most monumental example of contemporary sculpture to come to the auction market, this spectacular bear sculpture was created in 2005-2006 and inspired by Urs Fischer's memories of his own childhood. The auction house has partnered with the owners of the Seagram Building, the architectural masterpiece by Mies van der Rohe in midtown Manhattan, to arrange for a five-month outdoor exhibition of the sculpture on the building’s plaza so that the city at large might enjoy this special glimpse into the creative genius of one of today’s most provocative young artists.

If you are in the New York area or are going to be visiting you have to see this; it is amazing!

On the road....

Apr. 20-27:  New York

May 1-4:  San Diego to attend the CRE (Counselors of Real Estate) Conference

May 9-10:  New York

May 12-14: North Palm Beach, FL for the annual meeting of the Homer Hoyt Fellows.

May 16-17: New York

May 22-25:  Miami Beach, FL to attend the NCPERS (National Council of Public Employees Retirement Systems) Conference.

June 6-10: London to moderate a panel at the PERE Forum-Europe.

These are my views and not that of my employer.