News
BYE BYE, ABYSS
March 12, 2010
| Yesterday, the real estate community—many rookies among them—flocked to NYU Schack Institute’s 15th Annual REIT Symposium at The Pierre for sage advice from three industry gurus—AREA Property Partners’ William Mack, Equity Group Investments’ Sam Zell, and Vornado Realty Trust’s Steve Roth. |
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| The panelists with moderator Robin Panovka of Wachtell Lipton. William says the good news is that we’re no longer looking into an abyss; last year, the mood was awful and no one knew whether they’d have something to talk about this year. “We should all feel better,” he says, “but the world is still pounding us in the head.” Sam says sentiment is better than reality; what’s missing is demand. He’s looking to invest in the US, but he now has to calculate in how politics will affect the investment market. If you put the market in cyclical perspective, it’s predictable, and we’ll live through it, says Steve, who also expressed concern about the US’s political direction. |
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| For tips on deal making in a distressed environment, we turned to Cushman & Wakefield’s Glenn Rufrano, Centerbridge Partners’William Rahm, Fried Frank’s Jon Mechanic, and Morgan Stanley’s Michael Franco, moderated by Merrill Lynch’s Doug Sesler. Glenn sees people in the debt market taking bets and moving on the risk scale. Michael says opportunities exist in rescue capital where vacancies and broken development deals are, and will increase with mass amount of maturities coming due. REITs will become more competitive, they say, and Glenn notes the beauty of being public is that it forces you be intensively managed—people expect more value to be created, with less risk. |
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| There wasn’t much elbow room at the packed investor roundtable luncheon, which featured Wesley Capital Management’s Arthur Wrubel, ING Clarion Real Estate Securities’ Ritson Ferguson, Morgan Stanley’s Theodore Bigman, and Pershing Square Capital Management’s William Ackman, moderated by REIT Wrap’s David Schulman. It was the 10th anniversary of NASDAQ hitting 5,000. (We can only imagine the novelty Hallmarks.) Theodore says if we move slowly and take a decade to get to where we were 10 years ago, it wouldn’t be that bad. Investment opportunities exist in Asia and Australia, notes Ritson, but you should be cautious about demand drivers; those markets are projected to be better than global averages over five years. Four more panels and a keynote by Simon Property Group’s David Simon rounded out the day. |
