In a near-stagnant investment sales year, except for a flurry ofactivity in some sections, panelists on both morning powersessions, say that things will return to normal, it is just amatter of when, and who is left standing in the end.

|

[IMGCAP(2)]"There will be opportunity eventually, but the crisisis far from over," said Michael Fascitelli, president and trusteeof Vornado Realty Trust, in the Investor Power Panel, first sessionof the day. Fascitelli joined moderator Steve Pumper, executivemanaging director of Transwestern, as well as panelists including:Trevor Michael, managing director of real estate acquisitions atTIAA-CREF; Stephen Quazzo, CEO of Transwestern Investment Co.;Michael Katz, co-CEO at Sterling American Property Inc; and RobertUnderhill, managing director and capital transactions group head atShorenstein Properties LLC.

|

Panelists agreed that the investment market today is not apretty site, pointing to less velocity, and fewer transactions.However, some noted that pricing hasn't come down as much asexpected. Fascitelli, for example, said that as far as "gettingback into the water," it is important to be "cautious" for the nexttwo to three years.

|

"Private equity pricing has been sticky and slow to react,"Underhill said. He later explains that "there seems to be a fairbit of denial," explaining that it isn't just a cycle, it is moresystematic, more global and more synchronized.

|

Quazzo, who says there is a massive deleveraging going on acrossthe board, says that as people decide it is time to get back intothe water because things are OK, everyone jumps in at the sametime. "I'd rather jump in early," he said.

|

Katz told the audience, of more than 200 people, that arapidly-growing niche sector for his firm is going to where othersdon't want to. He explained that Sterling American Property isfocusing on investing in the residential sector--all over thecountry--and is moving away from the office sector. "Theresidential side has predictable cash flows and financing," hesaid. "We think it is an opportunity with realistic dollars."

|

The general consensus of the market from panelists, is that itwill bottom out around Q2 '09, however TIAA-CREF's Michael saidthat when a rebound comes, it will come back sharply, words thatwere also expressed at CityScape USA theday before, as GlobeSt.com reported.

|

The Financing Power Panel, with Cliff Mendelson, senior managingdirector of Transwestern as moderator, said it is important to bevery careful "on which deals you do, and how you do them." PanelistSteve Plavin, COO of Capital Trust, noted that you also have to becareful who you buy from. Other panelists included: Roy Lapidus,managing director of Goldman Sachs; Randy Reiff, managing directorof JP Morgan; and Mitchell Gould, EVP of BRT Realty Trust.

|

"The best opportunities are still coming," Reiff said, addingthat his firm is looking at Q4 to start pursuing more opportunitiesand start filling the credit void. "In the near term, floating isas good of an opportunity as fixed."

|

Some panelists pointed to fundamentals as key in today'senvironment. Reiff said that having good fundamentals isn'tnecessarily the only thing that's important though, "you have to beforward thinking. The key is to find a balance, which is hard todo."

|

In order for spreads to contract, some panelists said that loanquality needs to improve and people have to believe in thosetransactions. Plavin explained that that process will take a yearor two to work out, noting that a few things need to happen first:Wall Street needs to get rid of existing inventory; and investorconfidence and loan quality needs to rise.

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Natalie Dolce

Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.