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Capital Markets Brightening

WASHINGTON DC 02.23.2017

HOWARD COUNTY BOOM!

Major Projects, an Office Outlook, and a Multifamily & Retail Update

Allan Kittleman -- Howard County
Ike Leggett -- Montgomery County
Kevin McAndrews -- Atapco Properties
Capital Markets Brightening
Market watchers are seeing enough opportunities that there was an upbeat air to yesterday's ICSC/NAIOP Capital Marketplace Conference at the Westin in New York, which attracted 100 capital market pros, according to Bisnow NY reporter Amanda Marsh. Word is that next year (sooner than you think), lots of capital is going to be ready to work, thanks to a narrowing bid/ask gap.
Ackman-Ziff's Pat Hanlon, Madison International Realty's Ronald Dickerman, AREA Property Partners' Steven Wolf, and Morgan Stanley's Lauren Hochfelder Silverman, and Invesco's Todd Bassen.
This year was a game changer for many of the panelists on the JV equity panel, which included Ackman-Ziff's Pat Hanlon, Madison International Realty's Ronald Dickerman, AREA Property Partners'Steven Wolf, Morgan Stanley's Lauren Hochfelder Silverman, and Invesco's Todd Bassen. Todd says his firm's strategy has been to look at assets that were on the market two years to 18 months ago and withdrawn, which has made for successful off-market transactions. Lauren says Morgan Stanley has a $4.7B active pocket and a $7B core-value fund that's investing in multifamily, industrial, and has a pending office deal. On the fund side, Ron notes that many US endowments and foundations are hard hit, so it's important to expand the capital-raising base. Steve says Asian—particularly Chinese—and European capital is out there, while Lauren adds that sovereign wealth funds are further increasing real estate exposure.
Real Capital Analytics' Bob White (second from right), who moderated the institutional investment panel of Northwood Investors? Erwin Aulis, Kennedy Associates? Shobi Khan, and Torchlight Investors' Matt Jaffe
Numbers are showing improvement—we'll easily finish the year with over $100B in transactions, says Real Capital Analytics' Bob White (second from right), who moderated the institutional investment panel of Northwood Investors? Erwin Aulis, Kennedy Associates? Shobi Khan, and Torchlight Investors' Matt Jaffe. Erwin said that it hadn?t made an investment between August ?08 and March '10, but has since closed deals in Boston, DC, and Texas, and has $250M closing by year?s end. Purchasing is more active again, after banks had no motivation to sell for a while, Matt says; many have been quiet, off-market deals. There's more competition out there, the panelists note. Shobi lost out on a deal to someone who waived due diligence; there's more of a frenzy and people want to differentiate themselves to win a bid. Erwin notes he's been out-bid by REITs, pension funds, fund advisors, and opportunity funds.