What’s in Store for Capital Markets and Investment in 2015?
The economy has mostly recovered from the global financial crisis, and real estate investment returns have been healthy, but will potential Fed rate hikes end the party? Hear a Hall of Fame exchange as guru Willy Walker interviews icon David Rubenstein at our Capital Markets and Investment Summit Jan. 15, starting 7am at the DC Ritz-Carlton. And top guns from Starwood, John Hancock, MetLife and Meridian. We've priced the event to keep it small.
Walker & Dunlop CEO Willy Walker doesn’t think anyone can predict where rates will go, but he sees two forces pushing in opposite directions: the Fed wants to hike rates, but investors in Europe and Asia are buying up treasuries. Up or down, the process might make for a flatter yield curve. Willy (pictured above with his three sons in Sun Valley) thinks this will make long-term, fixed-rate borrowing more attractive, relatively speaking. Walker & Dunlop, which acquired Johnson Capital in November, is looking forward to a banner year. 2014 was a trough year for refinancing volumes, but the wave of commercial real estate refinancing has arrived.
Among our panelists, MetLife regional director Steve Taylor expects to be in the market regardless of where interest rates might move. In 2015 he says he will continue what MetLife has been doing since late 2013: increasing its level of high-quality equity investment. Last year MetLife purchased the 782K SF office building at 555 12th St NW (pictured above) in a JV with Norges Bank Investment Management. Steve says he sees lots of competition in debt and equity markets, but markets seem to be really disciplined in terms of credit metrics. His plan: remain vigilant.
John Hancock managing director of acquisitions Joseph Shaw (pictured above in his kayak), also a panelist, oversaw some major acquisitions in 2014, including 55 West Monroe, a 40-story, 800k SF Class-A office building in Chicago, for $224M. Most market participants are expecting cap rates to follow interest rates in 2015, but Joseph isn’t so sure. No matter which direction rates move, he’s prepared to handle any rough waters as John Hancock intends to double its real estate holdings to $20B over the next five years.
