assessment of Jeffrey Barclay, managing
director of ING Clarion Partners: “It looks
like it will be very serious for a long time.”
Barclay and other institutional investment
experts brought together for an hour-long
GlobeSt.com webinar saw no quick and
easy path through the market challenges
and pain that lie ahead. “There really is
no shortcut,” said Charles Leitner, global
head of RREEF.
However, the pathway through those
challenges will eventually lead to some-
where, the panelists agreed. Look for deal
velocity to gradually increase along with
the pressure to transact, albeit at lower
pricing than the industry saw two or three
years ago. “We’re going to get to a value
proposition fairly soon,” predicted Barclay. “Why? Because we have to.”
Titled “Capital Markets Symposium:
More Pain, Little Gain,” the Jan. 12 web-cast was moderated by Steve Pumper, executive managing director of investment
services at Transwestern, and Michael
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Desiato, vice president of Incisive Media’s real estate group. It was presented
by Transwestern and Real Estate Forum,
sister publication to GlobeSt.com and
Real Estate New York.
Although assets will start hitting the
market, thus helping to establish some
sort of pricing mechanism by the second
half of the year, there will continue to
be hurdles. Tom Garbutt, global head of
real estate at TIAA-CREF, pointed to the
ongoing lack of credit and a bid/ask gap
which is far from being closed.
And fundamentals may get worse before they start to improve. With some
forecasts predicting that unemployment
nationwide could exceed 9%, Barclay
warned that funds and other property
owners must be prepared for NOI to go
down across the board.
Even so, Blackrock managing director
Peter McNally said that funds that haven’t
boosted their liquidity by selling assets—
regardless of pricing declines—may be in
a bad situation later on. “Come next fall, if
you haven’t sold anything, you’re going to
have some explaining to do,” he said.
Among the hopeful signs for the coming year, Garbutt said everyone he’s talked
to is looking at “a longer-term horizon”
rather than short-term payoffs. That longer
view may be especially apt in a year which
McNally predicted will test his clients’ patience. Panelists concurred that another
reason for optimism was the incoming
Obama administration and the president’s
pick to lead the Treasury Department, Timothy Geithner. That’s especially true in the
context of the global market, Leitner said.
“The world is betting on the US succeeding. The US has to realize that partnering
with the world is part of succeeding.”
Listen to a replay of the Jan. 12 event
at https://event.on24.com/eventRegistra-
tion/EventLobbyServlet?target=registratio
n.jsp&eventid=130745&sessionid= 1&key=
09CFDAF5BF0D82E30B2675899C322DD
8&sourcepage=register.
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BOROUGHS
Coney Island Plan Starts
Review Cycle
The Bloomberg administration has officially begun the rezoning process for
Coney Island with a presentation of the
long-awaited plan to transform the faded
