In the real estate business, when plans don't work out likeexpected and various parties of the first part are involved withvarious parties of the second part you know that lawyers will begetting in on the action. The tangled webs of mortgagesecuritizations and credit default swaps whipsaw some investors whomay be overleveraged in lagging markets. Developers and theirlenders start to get more nervous as buildings come out of theground and leasing falls short of projections. Money partners startto grumble. Project meetings turn more serious and reflective:Tight looks and folded arms replace backslappingbonhommie.
During the last commercial real estate downturn, the circa 1990market implosion, it was quite amazing to see business"friendships" torn abruptly asunder over various contractcovenants, albeit exposure in some cases to tens of millions ofdollars or more. Suddenly John or Jimmy or Tex "my good friend andbusiness visionary partner" turned into "that s.o.b. who we "shouldsue into the ground." In the mid-1990s aftermath, the wisdomfloated among institutional investors was to avoid joint ventureswith developers, "who were only in it for themselves."
Well, time helps people forget and changes the players. Inthe most recent cycle, joint ventures were called operatingpartnerships to make everyone feel better and money partners madesure that developers had "substantial skin the game" to aligninterests. But as everybody leveraged up to the hilt, substantialbecame less substantial even for the institutions. And the moneypartners--Wall Street bankers not insurance companies--were usingother people's money in the transactions while taking out plenty offees along the way.
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Jonathan D. Miller
A marketing communication strategist who turned to real estate analysis, Jonathan D. Miller is a foremost interpreter of 21st citistate futures – cities and suburbs alike – seen through the lens of lifestyles and market realities. For more than 20 years (1992-2013), Miller authored Emerging Trends in Real Estate, the leading commercial real estate industry outlook report, published annually by PricewaterhouseCoopers and the Urban Land Institute (ULI). He has lectures frequently on trends in real estate, including the future of America's major 24-hour urban centers and sprawling suburbs. He also has been author of ULI’s annual forecasts on infrastructure and its What’s Next? series of forecasts. On a weekly basis, he writes the Trendczar blog for GlobeStreet.com, the real estate news website. Outside his published forecasting work, Miller is a prominent communications/institutional investor-marketing strategist and partner in Miller Ryan LLC, helping corporate clients develop and execute branding and communications programs. He led the re-branding of GMAC Commercial Mortgage to Capmark Financial Group Inc. and he was part of the management team that helped build Equitable Real Estate Investment Management, Inc. (subsequently Lend Lease Real Estate Investments, Inc.) into the leading real estate advisor to pension funds and other real institutional investors. He joined the Equitable Life Assurance Society of the U.S. in 1981, moving to Equitable Real Estate in 1984 as head of Corporate/Marketing Communications. In the 1980's he managed relations for several of the country's most prominent real estate developments including New York's Trump Tower and the Equitable Center. Earlier in his career, Miller was a reporter for Gannett Newspapers. He is a member of the Citistates Group and a board member of NYC Outward Bound Schools and the Center for Employment Opportunities.
