News
From Peachtree to DC
March 2, 2011
| Piedmont Realty's Don Miller still has confidence in Atlanta, even though the market is softer than many others. (Unlike Lost, the "others" have a name: NY and DC.) | |
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| Speaking with Don, during Bisnow's Washington Real Estate Summit yesterday at the Ritz-Carlton in Tysons Corner he told uscore properties in Atlanta—as evidenced by the recent sale of 3344 Peachtree—have recovered, but the ?broader bread-and-butter? properties are still soft. Don told our audience of 1,300 that people ?are in such a suspended disbelief in Washington compared to what's going on the rest of the world? in terms of strugglingvaluations for most CRE. | |
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| Don was one of six illustrious panelists during a national CRE overview, including Dune Capital's Dan Neidich (legendary for founding the Whitehall Fund and as chairman of the influential Real Estate Roundtable); Carlyle Group's Rob Stuckey; New York's ?Queen of Retail? Faith Hope Consolo; Don; CWCapital's Chuck Spetka; and Ackman-Ziff's Simon Ziff (who moderated). Dan concurred with Don and says ?finding capital for real estate continues to be very challenging? for those outside of DC and NY. ?A number of banks I spoke to will not do construction financing, period,? Dan says. ?It's almost like they're red-lined, and we'd like to change that.? Don did say that some foreign investors are exploring other markets for investments. ?I think it's coming because I think they're getting frustrated in the gateway markets? on aggressive pricing. | |
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| Here's Chuck about to tell an audience that CWCapital has been attempting to take struggling CMBS assets and split them into A and B notes, which is harder to do than it sounds. ?We try to work hard on them, we do. But the reality of the situation is that we're far more likely to foreclose on them.? | |
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| Both Dan (above) and Rob say FIRPTA (the tax on disposing of properties in the US) is keeping some foreign capital at bay. Rob says 40% of Carlyle's money is raised from foreign investors. He called the FIRPTA tax ?harmful? and affects cash flow from other countries. Rob also says that he regrets not buying more properties in 2010. ?We probably wish we had been a little more aggressive in buying stuff a year ago,? he says. "The thing about a recovery you're always concerned about is a false recovery.? | |
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| And here's Faith Hope Consolo, who was actually quite bullish on retail across the country. ?Everybody wants to be in NY,? Faith declared. ?Not that they don't want to be in Atlanta and Chicago.? She says there are retailers from areas of the world that are actually trying to enter the US market, including from India, Canada, and Iran. And why not, she asks? ?This is a country of shopaholics and that is why the Europeans want to come here.? | |
