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Seismic Shift

Seismic Shift
An  18 month gestation period for mammals is alarming. But for the DLA Piper's Global Real Estate Summit, a series that comes around at just that pace, including yesterday at the Four Seasons Chicago, it's just enough time to recover from the real estate  star power. At the event, which shared a title with our headline, more than 500 learned the new paradigm in commercial real estate.
Ernst & Young's Dale Anne Reiss moderated a panel of Vornado's Michael Fascitelli and Equity Group Investments' Sam Zell
At the start, some of the seismic activity was just colorful language from the likes of Vornado's Michael Fascitelli and Equity Group Investments' Sam Zell, here with moderator Ernst & Young's Dale Anne Reiss. Sam says he sees non-obsolete real estate filling up in the next 18 months as job growth picks up, but also emphasized that some buildings, such as suburban call centers that are now offshoring jobs, would  no longer  be  viable. Michael says we'll see some good opportunities for trading as long as prices go up to a point where owners might sell. Until then, the best bets are portfolios owned by failed community banks.
Green Courte Partners' Randall Rowe, Ventas' Deb Cafaro, CBRE Investors' Ethan Penner, Dune Real Estate Partners' Daniel Niedich and Eastdil Secured's Roy March.
The markets panel featured Green Courte Partners' Randall Rowe, Ventas' Deb Cafaro, CBRE Investors' Ethan Penner, Dune Real Estate Partners' Daniel Niedich, and Eastdil Secured's Roy March. Deb, whose REIT mainly invests in healthcare and senior living, says the increase in baby boomers plus the new healthcare plan should create a new demand for investment in her market. Ethan says the core problems of real estate lending have yet to be addressed, since we leveraged so much debt between 2007 and 2009. Roy described the assets selling as â€œtrophy or trauma”: the best and the worst, with prices to match.
DLA Piper's Lee Miller and Jay Epstien
Nobody was nostalgic for the market that we had during the last conference (Sept '08), say organizers DLA Piper's  Lee Miller  and Jay Epstien, here flanking Randall Rowe. Having many repeat panelists, who set up an agenda for the next conference, should set them in a good position for 2011, since many talked about how quickly the market was changing.
Related Companies' Curt Bailey, Cushman  & Wakefield's John Cushman, Harrison Street's Christopher Merrill
Related Companies' Curt Bailey was polishing up on some light reading before his panel with Cushman & Wakefield's John Cushman and Harrison Street Real Estate Capital's Christopher Merrill. John says he's concerned that once leases expire, tenants will try to find lower rents in other buildings, leaving even some Class A assets with higher vacancy. Christopher is having success in student housing: He's in a joint venture with an Atlanta-based group to develop some at the University of Alabama and has done 10 development deals of $4-5M in the last 12 months. Curt said having only  very high  and  low ends of the market trading leaves buyers and sellers with no idea  what mid-level pricing should be.
David Worrell & Associates' David Worrell and Transwestern's Rob Bagguley
We snapped David Worrell & Associates' David Worrell and Transwestern's Rob Bagguley before the panels. David and Rob used to  work together  on the retail leasing for Marina City, where David was the asset manager and Rob was the leasing agent. They're considering teaming up for another project, but not in Illinois.