REITs Think They Can
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|In between daydreams about Patrick Kane skating to "Chelsea Dagger," Chicago real estate pros learned how leading REIT execs feel about prospects for investment this year, at NAREIT's REITWeek at the Chicago Hilton. The consensus: Slow and steady recovery.|
|In what was billed as "the smallest panel of the day" (indicating physical stature) Ventas' Debra Cafaro interviewed Sam Zell, who emphasized that on the most basic level, a REIT is a stock and—at the end of the day—liquidity is the best value. He says entrepreneurial spirit has gotten the better of REIT owners and thinks there should be just 30-40 REIT s rather than 200. Sam also recommends keeping liquidity 50% higher now than he would have two years ago.|
|ISI Group's Steve Sakwa talked to AMB Property Corp.'s Tom Olinger and Guy Jacquier about the prospects for national and international office investment. AMB is focusing on getting its portfolio back to 95% occupancy (up from 90.5%). Guy says he sees less distressed sellers than fatigued sellers, who are just tired of maintaining buildings for low rent. Tom reports the Northwest suburban Chicago submarket has been a rough one for AMB lately.|
|Strategic Hotels & Resorts Laurence Geller, right, tried to dispel myths about hotel ownership to Raymond James & Associates'William Crowe. He says demand for luxury products hasn't gone down—supply has—making luxury even more desirable as an owner. He's also seen an increase in group booking rates, with one group booking a $1.5M trip already for 2011 in one of his hotels. Laurence says he's cut labor costs by 50%, helping stabilize RevPAR.|
|Vornado's Wendy Silverstein, Michael Fascitelli, and Joe Macnow say the road to recovery will be rocky. Michael reports they plan to stay in office and retail investments in New York and DC and are waiting for a big, hairy, complicated deal where they'll have fewer competitors. He thinks the next deal will be similar to the company's ownership of 1540 Broadway, which required complicated re-tenanting. But mostly, Vornado likes the flight-to-quality the recovery is bringing on.|
|The academics: Baruch College's Savid Shulman, University of Wisconsin's Morris Davis, and Northwestern's Robert Gordon say the economy will recover slowly without more stimulus. Robert thinks residential will improve now that fewer people are buying, leaving TODs in places like Evanston empty.|