I want to thank the guys over at Bay Area Commercial Real Estate for posting this video. The video comes from the “Reviving Commercial Real Estate” panel at the Milken Conference.
It was a diverse panel consisting of guys from various sectors of the market:
- Harvey Green – President and CEO, Marcus & Millichap Real Estate Investment Services
- Richard LeFrak – Chairman, President and CEO, LeFrak Organization
- Peter Lowy – Group Managing Director, Westfield Group
- Barry Sternlicht – Chairman and CEO, Starwood Capital Group
- Michael Van Konynenburg – President, Eastdil Secured
- Moderator was Lewis Feldman – Partner/Los Angeles Office Chair, Goodwin Procter LLP
I highly recommend you check out the entire video, but buy drugs online no prescription I’ve summarized some of my favorite quotes below:
Click to start video
- Always be doing something interesting, so if you die in the middle of it you’ll look interesting
- The property sector has bottomed, but you’re not going to see the kinds of returns moving forward because the economy is way ahead of the fundamentals
- Until the gridlock within the extremely complicated CMBS structures begin to unhinge, all we’re going to be left with is playing with some of these FDIC things, where the competition is very strong
- It’s fun to be in the real estate business again – you have to be very creative to be private
- It’d be nice for the FED to raise rates but they’re not going to do it until November after the midterm elections. Then rates are going to raise fast, 200-300 bps or the dollar will crash
- Interest rates and cap rates do not correlate for long, but that’s because of the flow of capital
- When they raise rates, and short-term rates have to go up, it’s going to get worse and there will be a lot more distress and we’ll see if we have enough money in the sector to clean it up
- Expenses, in particularly real estate taxes, are going up. Revenues will have to grow faster to increase NOI
- Fear is driving this new view of the property market
- Real estate values are driven so much more by financing costs than by inflation
- If you know the markets and you know the values and you understand the assets and you can take some educated risks, you can get out-sized returns
- The government is doing damage that we may never recover from
- There’s always something to do, there’s always a way to make money
- Barry Sternlicht likes Brazil (as does Sam Zell)
- Invest with no ego, in the U.S. emotion often gets in the way
- Find guys who can add value, partner with the right people
What do you think?
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