Values Are Heading Down

Wall Street executives talk about the economy at ALIS.

LOS ANGELES—Hotel values are heading down, according to the Wall Street executives at ALIS this week, who say that the public sector is pulling back and that the private sector will follow. The Wall Street Outlook panel included Michael Bluhm, managing director at Morgan Stanley; Jeffrey D. Horowitz, global head of real estate at Bank of America; Christopher J. Jordan, EVP at Wells Fargo; Lawrence Y. Kwon, managing director at Moelis & Co.; and Ben Leahy, managing director at Goldman Sachs.

“One of the things that has us scratching our head is that if the outlook is so great, why is the stock market heading down,” Bluhm questioned on the panel. “Values are coming down. Public investors lead first and private markets tend to follow. REITs are concerned about values compressing, and we are starting to see pull back from investors to wait and see what is going to happen with values.” Leahy added that REITs are short-term focused, and in markets like New York, where the supply has been completely overrun, no one has a catalyst to get in.