GlobeSt.com: How does your job change with thepromotion?

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Roth: I'm very excited to be taking over as aglobal industry leader and continue to expand a preeminent globalbrand in the real estate industry. The position changes severalthings. Now I'm responsible for global business around the world,and primarily it was just New York. But having been in New York hasbeen very positive in the regard with the significant amount thathas come into our industry over the past 15 years, primarilythrough a lot of the New York institutions and private-equityfirms. It's given me a great opportunity to have a great knowledgeand relationship with a global network around the world.

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GlobeSt.com: What sector do you see getting hithardest by the current downturn?

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Roth: Obviously its no secret that there's somechallenges in the US. What tends to get overlooked are some of theopportunities that exist around the world given what's happened inour own backyard. I tend not to look at it in terms of sectors. Butin the United States there is kind of a de-leveraging happening.The credit markets provided a lot of liquidity over the lastseveral years. Now that we are moving back to more traditionalprudence in underwriting, like more hard equity deals and debtlevels being less available, part of the question is, how do youbridge that gap? Is it equity from other sources, mezzanine debt orpersonal guarantees? There are a lot of sectors facing challengesin the US.

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GlobeSt.com: Do you see firms doing more workouts as aresult of this?

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Roth: I do see workouts certainly being anopportunity, and that will occur. One thing that's a little bitdifferent today from when we traditionally thought of workouts 15years ago is that there is so much more capital that is availableon a worldwide basis that can step in to bridge the gap. In effect,you might be having what in real estate you'd traditionally thinkof as a workout. But you might see much more of these folks that dohave capital, and understand pricing and a deal, moving in andcreating a transaction much more quickly than traditionallyhappened before. Part of that is the rise of private equity andinstitutionally sponsored funds.

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GlobeSt.com: How do you see funding here fromsovereign-wealth funds evolving? Will they continue to targettrophy assets, or will that change?

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Roth: It's a good possibility that they will getinto sectors different from the trophy assets. One of the thingsthat you see when you're over there, they are becoming more andmore like their own private-equity fund. A lot of that is that theyare hiring significant amounts of people in the real estateindustry. When I'm over there and meeting with these funds, I'mtalking to a lot of Americans and Europeans who 15 or 20 years ofexperience in different aspects of the real estate business. All ofa sudden these funds have more skilled capacity and opportunity tobetter evaluate a wider range of opportunities than they previouslyhad. They used to have tremendous amounts of capital but might haverelied primarily on advisers.

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The sovereign-wealth funds tend to have a different profile andtime horizon and what they are looking at. They tend to have alonger time horizon. They tend to be looking for steadier types ofinvestments, like trophy office properties in major markets. Butit's pretty clear that they are evaluating other opportunities witha long-term perspective. It's not opportunistic looking to make aquick return.

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GlobeSt.com: What kinds of opportunities is your firmseeing from the downturn?

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Roth: In the past four or five months I've visitedmany of our cities and clients around the United States. REITs anda wide variety of real estate companies have all absorbed a lot inthe past couple of years. They had easy access to credit and boughta lot. Now what they're saying to me is, "With this creditslowdown, we have a chance to wisely use our time, absorb all ofthese acquisitions and focus on our operations and be even betterprepared to capitalize when liquidity begins to return to themarket."

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We're clearly helping a lot of our clients with operations,technology and cost efficiencies now that they have this chance fora little bit of breathing room.

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GlobeSt.com: Are you seeing less US investment inoverseas assets?

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Roth: It's pretty clear that real estate is acyclical business, but we are in a global economy. What happens inone part of the world will now impact other parts of the world.Part of it depends on what types of companies you're talking about.If you're talking about investment funds, whether they'reinstitutionally sponsored or some of the larger private investmentfunds that have raised billions of dollars in capital, the slowdownwill not impact at all. They're continuing to look overseas andlook for opportunities throughout the world. They have theinfrastructure in place to do that, their people on the ground andthe joint-venture partners to capitalize on those opportunities.That is not going to change.

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If you look at construction companies, for them, overseas inmany ways might become greater opportunity. Look at the amount ofcapital that's going into infrastructure in a lot of theemerging-market countries and the burgeoning middle class.

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GlobeSt.com: We're hearing about lots of mergers rightnow, like the one between JLL andStaubach and the rumored Colliers-GVAmarriage. What's causing these to take place right now?

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Roth: Real estate is a very transaction-orientedbusiness. There are always opportunities for combinations anddivestitures. It's clearly about globalization and the larger andgreater the platform gives a greater opportunity to take advantageof whatever your business might be, service, brokerage orotherwise. Globalization causes a consolidation of a wide varietyof platforms. And certainly when you have a credit slowdown like wehave, it slows down transactions and lots of other things. Whattends to happen is you will have stronger players emerging and lessstronger struggling, and that creates opportunities foracquisitions.

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GlobeSt.com: How do you see this down cycle shakingout?

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Roth: This credit slowdown has a bit of a ways torun. You have very high priced oil and other commodities. It'simpacting consumers. You're likely to see some changes in theregulatory landscape. More and more companies are talking aboutlayoffs, so the trend of unemployment might continue to go up.There is less credit availability. There are so many pieces ofuncertainty, to help reach a stabilization point.

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What exists now, in simple terms, is to do a deal you need morehard equity. You have stricter underwriting standards and have lessdebt available. If that continues it's more change and uncertainty.When do you reach that stabilization point? How does the gap getbridged? We're still in a period of pretty significant uncertainty.A lot has to flush through the system to get to the point where thecredit market starts functioning in a more economically efficientmanner.

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