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We're New Yorkers. We live in the moment and need signs that good things are happening (just ask A-Rod). Perhaps that's why a captivated crowd gathered for a NAIOP breakfast at Haworth's Park Ave showroom to hear experts discuss the improving debt markets.
JPMorgan's Dennis Schuh, MetLife's David Politano, M&T Bank's Gino Martocci, and Schein Media's Jonathan Schein
And good things are happening: Liquidity has returned, says JPMorgan's Dennis Schuh, who spoke with MetLife's David Politano, M&T Bank's Gino Martocci, and moderator Jonathan Schein of Schein Media. MetLife has up to $6B ready to put out on the four major food groups and hospitality. JPMorgan is participating in fixed-rate lending for five, 10, and 15 years across all property types, including single tenant, and has a higher-leverage point than the life companies. Most of its success has been in shopping centers and big-box power centers over the past six months, Dennis says. And M&T Bank is participating in construction loans and two 80/20 deals. It never fully withdrew from the market, Gino adds, but does have a larger allocation this year.
NAIOP audience at Haworth Showroom
We told you they were enraptured—not one person is looking at a BlackBerry. There's a lot of money to put out across stable properties in all product types, David says, and Gino adds that M&T has seen successful equity raises—American banks are back, being aggressive for the right customers. Now we're just waiting for the core market/core asset transactions: David says people are testing the market, but are no longer under duress to sell. The good news is that 1Q saw more trades than all of last year, and we will see trades pick up at an accelerated pace, Gino offers.
Haworth's Aret Lerian, Ackman-Ziff's Joe Tufariello, M&T Bank's Gino Martocci, MetLife's David Politano, JPMorgan's Dennis Schuh, Schein Media's Jonathan Schein, and Jones Lang LaSalle's Paul Formichelli and Jim Wenk
Haworth's Aret Lerian, Ackman-Ziff's Joe Tufariello, Gino, Dennis, David, Jonathan, and JLL's Paul Formichelli and Jim Wenk. On the office side, Dennis tells us that JPMorgan is having more success in the ‘burbs, since it can't compete with life companies and foreign investment for core assets in core cities. David notes that transactions have increased, and he's beginning to see cutbacks on perks like free rent. It's a tale of two cities, Gino adds, pointing out that there are some people still competing for $125/SF rents. But it will take a long time to get back to 7% unemployment, although NYC has benefited from the lack of overbuilding.