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The ULI Summit lasts 72 hours, or one less than the time it took us to finish the Marathon. On Friday, the final day, Clarion Ventures?Charles Kendrick summed it up: Real estate CEO?s should listen to more diverse opinions; developers should reach out to tech companies; and expect more distressed assets. Plus, watch the Millenials, whose choices will determine how real estate fares.
We snapped the panel: HBS' Arthur Segel and David Moss, Beacon Capital's Alan Leventhal, Grosvenor Trusts? Jeremy Newsum, and the Harvard Joint Center for Housing?s Nic Retsinas. Nic says residential financing, which triggered the meltdown, is ?on life support?—the federal government is insuring 90% of US mortgages. One question: What will happen when the feds withdraw support? Nic says ?the administration is addressing this prudently because housing is still fragile.? Meanwhile, as developers deal with the public sector, it's wise to think of it as ?an equity partner? rather than a ?donor.? After the 2012 election, Nic expects a recasting of government?s role in housing, with it serving as a backstop to a private delivery system.
Beacon Capital's Alan Leventhal at ULI Summit
Alan says to assess real estate and liquidity, look at the broader economy. Compared to 18 months ago, ?he's encouraged? by the numbers.There's growth in manufacturing, a broad range of tech jobs, and consumer sales. He says the next two years won't be easy, but to get out of the hole, the US needs 1.4% annual job growth; that's manageable. If there is growth, real estate will do well in cities like Boston, NY, San Fran, and DC. ?In 4, 5 years, it's not hard to see a return to strong fundamentals.? One problem is the disconnect between values of core assets and other properties.
Grosvenor Trusts? Jeremy Newsum at ULI Summit in Boston
Jeremy says that during the prior 10 years, CEO?s communicated mainly to learn what others were doing, so they could copy them. But C-level management also needs to be original. So far though, he says he hasn?t seen many new ideas. For those who invest in real estate long term, he says it will move along with the overall economy. Jeremy favors the long term fundamentals of Europe, which is ?endemically undersupplied,? to the US, which is ?endemically oversupplied.? Another key factor for ?rational investing? is modern,effective infrastructure.
Harvard Business School's David Moss
Davidhopes financial regulation will achieve stability and encourage innovation. After the Great Depression, the regulatory regime created did just that, aggressively regulating commercial banks whose failure could bring down the whole economy, he says, and only lightly touching others. Although some said those rules would destroy the economy, ?We had 50 years of stability and innovation.? Today similarly, the federal government has to rein in 20 to 30 giants like Goldman Sachs (we knew we saw Obama in the audience), Citigroup, and J.P. Morgan, and go easy on others. The giants are ?dramatically? larger than their counterparts of the ?30?s.
NYC?s Planning Commissioner Amanda Burden
NYC?s Planning Commissioner Amanda Burden created the ULI Amanda Burden Urban Open Space Award and presented the first one to Detroit's Campus Martius Park, a 2.5-acre green space. Once derelict, it now attracts more than two million visitors a year and has catalyzed an estimated $700 million of adjacent development, including street level cafes, retail shops, and the new one million SF Compuware World Headquarters. The $10,000 prize was awarded to the Detroit 300 Conservancy,which developed the park as a legacy gift to the city.
Corcoran Jennison?s Marty Jones announced the ten recipients of the Awards for Excellence, Americas Competition: Andares, Guadalajara, Mexico (Desarrolladora Mexicana de Inmuebles S.A.); Bethel Commercial Center, Chicago, Illinois (Bethel New Life); Columbia Heights, Washington, DC (The Government of the District of Columbia); Foundry Square, San Francisco, California (Wilson Meany Sullivan); LA Live, Los Angeles, California (AEG); Madison at 14th Apartments, Oakland, California (Affordable Housing Associates); Sundance Square, Fort Worth, Texas (Sundance Square Management); Thin Flats, Philadelphia, Pennsylvania (Onion Flats); Vancouver Convention Centre West, Vancouver, British Columbia, Canada (BC Pavilion Corporation); The Visionaire,New York, New York (Albanese Organization & Starwood Capital).