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June 22, 2010
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FIRST TO RECOVER?
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| We’re proud to announce our first annual Bisnow Senior Housing Summit, here at the Willard on July 15, with top officials of Carlyle Group Senior Living, JER Partners, Walker & Dunlop, Fountain Square Properties, ASHA, Capital Funding Group, Reznick Group, and Tatusko Kennedy. Sign up now! |
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| “Knowledge markets” will lead the commercial real estate recovery is what Transwestern CEO Larry Heard told nearly 350 this morning at our second Bisnow Breakfast & Schmooze in Houston. He put DC at the top of that list, which he defined as regions heavy on government, education, tech, and energy, also citing NY, Boston, Raleigh/Durham, Austin, and Houston. |
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| That’s Larry holding forth this morning on our panel, with the attention of Holliday Fenoglio Fowler's Rusty Tamlyn, who expertly moderated. Larry said Houston and these other cities are in the midst of a significant (though “lumpy”) capital markets recovery, but not yet a recovery of fundamentals. He said more recreational markets (like Las Vegas, Phoenix, South Florida, and parts of California) will lag. He doesn’t believe there will be a double-dip recession, although he and others expressed concern for the Gulf region if the drilling moratorium becomes indefinite. |
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| On another of our panels, Dallas-based Goldman Sachs Commercial Mortgage Capital co-CEO Roddy O’Neal (holding mike) said they’ve been seeing a functioning CMBS market growing since February and are feeling comfortable given much more conservative evaluation of loans (eg, “not assuming rent bumps five years out”), leverage down to 50% to 70%, independent directors, and much more perception of risk by securities purchasers. HFF Houston chief Scott Galloway, far right, moderated the group that also included Prudential Mortgage Capital local chief Paul Geyer, middle, representing the perspective of life insurance funds, who said they’ve just pushed out another $5B for anchor retail, multifamily, and some office, but that they’ve also just started “whispering the word ‘hotels’ in the last week.” Also on the panel: Thompson & Knight capital markets legal specialist Mark Weibel, who said transactions are mounting at a “crushing pace,” and special servicer Steve Hanover of Situs. |
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| Larry says Houston always rebounds because energy’s not going anywhere and it’s the most entrepreneurial city in America. Also on panel: Keith Willby of Wells Funds ($5 billion in the second REIT and starting to raise a third); and Apartment Realty Advisors’ brokerage principal David Oelfke, left, who says when they put up a Class A building recently bids came from three pension funds, four REITS, and only three private buyers. He said they love the demographics of multifamily, citing the stat that 30% of adults age 18 to 34 are living at home, and pointing to the upside “if they get back into the market.” He added, “as they should”—to audience laughter. |
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| All these people standing up may look like it was the schmooze part of the program, but actually it was just the crowded standing room situation on the perimeter of the seats as panelists talked. |
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| RETAIL SNAPSHOT |
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| Last week in DC, we stopped by CREW’s luncheon at the Capital Hilton on the state of retail. Asadoorian Retail Solutions’ John Asadoorian joked that he felt comfortable speaking to a group of women because as a retail broker he’s all about shopping. He said we’re in a transition period where expectations and reality are not always in sync, and that in 25 years he’s never been so uncertain about what the “right” rent is. |
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| Representing landlord and developer: Federal Realty’s Wendy Seher and Edens & Avant’s Jessica Bruner. Jessica says projects in Prince William and Loudoun were badly hurt by the drop in housing values, and will take five to 10 years to recover. But she sees opportunity in repositioning existing grocery-anchored strip centers in close-in locations with investments in the $3M-$5M range. Both women agreed that consumers in the downturn have shifted interest to value and quality, and want choices other than national chains. |
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| Beth Aberg is owner of Random Harvest, a boutique furniture store with four locations in the DC area. She echoed others that property owners want unique stores to avoid what John called the “generica” look and drive traffic, but sometimes large landlords don’t have the flexibility to lower their rents or provide TI allowances that small tenants need. Yet all agreed the downturn has provided new opportunities in prime locations for small stores, as major retailers have closed or retrenched, and more nimble small tenants can respond faster to local demand. |
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| Three stylish dressers that retailers love: Mohawk’s Cynthia Bell, CREW prez Kathryn Ciliberti of DBI Architects, and Bognet Construction’s Jennifer Bognet. |
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| POWER LUNCH |
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| We brought friends and clients to try out the exciting new Buddha Bar at lunch with us last week at 5th and Mass. Standing in front of the giant Buddha figure, front: Bozzuto's Colleen Kittel and Jamie Gorski, and JM Zell's Sharon Dougherty. Back: Grunley's Jennifer Dunn, Trammel Crowe's Heather Seich, Monument's Natasha Stancill, Eye Traffic Media's Stefanie Berliant, Grunley's Donna Duncan, GGA's Mary Ellen Curto, and Cherry, Bekaert and Holland's Stacie Benes. |
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This newsletter is a journalistic news source which accepts no payment for featured interviews. It is supported by conventional advertisers clearly identified in the right hand column. You have been selected to receive it either through prior contact or professional association. If you have received it in error, please accept our apologies and unsubscribe at bottom of the newsletter. Copyright 2010, Bisnow on Business, Inc., 1323 Connecticut Avenue, NW, Washington, DC 20036. All rights reserved.
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