ULI Fall Meeting Review: What the Global Leaders Had to Say in San Francisco

by Joe Stampone on November 10, 2009

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This past week much of the real estate community flocked to San Francisco where over 6,100 professionals, including some of the biggest names in real estate, attended the ULI Fall Meeting. Unfortunately I wasn’t able to attend, however Jean-Claude Goldenstein, founder of CREOpoint, provided a great review of the event.

ULI

I. Overall Recommendations:

  • Ken Rosen: Lock in these extraordinary low interest rates, learn Mandarin if you can, and if you are a developer, find something else to do.
  • PwC: Buy public REITs, multifamily and distressed condos, hold office and triage retail. The future is about green, infill, and transit-oriented development.
  • Michael Buckley: Re-energize your career by focusing on property repositioning and turnaround strategies rather than dreaming about warp buildings.
  • Stephen Blank: Understand the implications of the 33 page government document on loan workout.
  • Michael Fascitelli: Watch job trends.
  • PwC: Top 10 US markets in the following order; Washington, San Francisco, Boston, New York, Houston, Seattle, Denver, Dallas, LA, San Diego. The gamble on Las Vegas did not pay out!
  • Joseph Brown, AECOM: Plan and build organization in down cycles. Be inspired by your clients, the best projects come from having the best clients.
  • Tim Conlon, Partner PwC: Be patient, time the cycle, focus on quality assets and expect to hold for 5-7 years
  • Jim Klingbeil, Klingbeil Capital: Look for tenacity, enthusiasm and integrity in people and in times of stress don’t compromise your values.
  • Chuck Leitner: Understand how client needs are changing and figure out what the other end of the tunnel looks like.
  • Tom Peters: Excellence is more important than success, it’s an attitude and that counts even more in tough times.

II. Economy: The fear and recession are behind us, now we still have to work out what is ahead of us. Whoever is left standing will be in a great position…

  • Ray Torto, CBRE Chief Economist: the light at the end of the tunnel is not a train – the US is likely to bottom middle of 2010.
  • Ken Rosen, Chairman Fisher Center, UC Berkeley: U.S. consumers lost confidence – they can’t buy things they don’t need with money they don’t have.
  • George Marcus, Chairman Marcus & Millichap: Now is the time to find opportunities, but it’s a granular asset by-asset and market-by-market decision.
  • Alex Otto, ULI Europe Chairman and CEO of ECE, European retail leader with 114 shopping centers: I never understood how US shopping center prices got so high.
  • Jonathan Miller, author of PwC “Emerging Trends” report: It’s triage time with retail.
  • Chris Cooke, CEO-Asia CBRE: The focus of the meeting was the US but many delegates expressed interest in Asia, demonstrating the growing importance of the region in terms of global real estate investment activity.

III. Capital markets: “We went from fear to uncertainty and I never thought uncertainty would feel so good there’s a great debate whether to take the pain now or extend and pretend”

  • Tom Peters: We are the victims of clever people like the Nobel Prize winner who invented derivatives.
  • Gerry Hines: I was very concerned about the available debt and 3-4 cap rates.
  • Roy March, CEO, Eastdil Secured: Deals over $25M will grow 200-300% in 2010.
  • Chuck Leitner, Global Head RREFF Alternative Investments: What’s different from the 90s is that investors have not fled the asset class.
  • Hamid Moghadam, Chairman AMB: There is more talk about allocation to real estate but from investors who typically don’t have large exposure to it.
  • Joseph Azrack, President, Apollo Global Real Estate: The elephant in the room is government intervention.
  • Jeremy Newsum: Many of us have a hard time thinking beyond 6 months.
  • Michael Fascitelli, CEO Vornado: No economist can predict as far as 2013, but the resetting of pricing will attract capital.
  • Ron Pressman, President, GE Capital Real Estate: There’s a great debate whether to take the pain now or extend and pretend, which did not work for Japan.

IV. “Technology will drive the change we need. Innovate, mutate or die”

  • Joseph Brown, AECOM: Social technologies will have a major impact, which was later confirmed when I met with Tom Peters. When I asked him whether Web 2.0 would work for CRE, he told me “blogging was the best marketing thing he ever did and that the CRE industry needs to share more and should not be technophobic. Even old guys who can’t play golf anymore really enjoy competing online.”
  • Jeremy Newsum: We went from terrible fear to hope and desire to work out what can be done. Technology will drive the change we need. We all know that it is easy to hold a conversation in a small group. It becomes more difficult to achieve coherence as the number of voices grows. We must find buying online a way to do just that, to organize our ideas on issues that affect our industry and our communities. Those who seek our knowledge must find it more easily in future.
  • Gerry Hines: We need to stay current and on the forefront of technology and leaders in the green movement.

V. Green: “Substantial progress will not be made by new buildings but by reducing existing building energy consumption and carbon footprint.”

  • Anthony E. Malkin, president of Malkin Properties (owner of 10 msf in the NY area, including the Empire State Building): Energy efficiency dollars are inexpensive compared to alternative energies like solar. The $500-million Empire State Rebuilding program lead to good surprises like from the refurbishment of 6,500 windows that dramatically reduced both summer heat load and winter heat loss. In addition to overall 40% program savings, the building has already attracted such like-minded, high-quality tenants as Skanska, the FDIC and Coty.
  • David Pogue, Director of Sustainability CBRE (instrumental in CBRE’s being ranked 45 in Newsweek list of the greenest large companies in the US, the highest ranking for a company in our industry): We continue to seek ways to educate and inform our employees and clients of the programs we have developed
  • You can also watch the interview of Leanne Tobias, Managing Principal, Malachite.

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