Thank you for sharing!

Your article was successfully shared with the contacts you provided.

(To read more on the debt and equity markets, click here.)

NEW YORK CITY-CB Richard Ellis’s Jeffrey Dunne said he’s seeing themes crop up again and again. First, the holding period for real estate is getting shorter and shorter each year. “The cycle is much quicker,” he said during a capital markets outlook at the Urban Land Institute’s first Regional Trends Conference. The event was jointly organized by ULI New York, ULI Northern New Jersey and ULI Westchester/Fairfield.

“Buyers are more selective with their time and willing to pay premium for assets,” he added. Another theme is that lenders are playing a more important role in the bidding process. He noted that his “rolodex has changed. There are so many new buyers. The buyer list is so deep.” He added that one new class of investor is the TIC environment. “Who knew who TICs were five years ago?”

Similar sentiments were echoed by fellow panel member Robert Verrone of Wachovia Securities. “Debt is everywhere. Lenders are really scraping on every deal and probably lending too much.” As an example, he cited the recent $3.2-billion Blackstone/Wynham deal, which had a $2.8-billion debt placement.

“There is so much liquidity,” said Michael Fascitelli of Vornado Realty Trust, who also pointed out the rising land costs. “Any deal you didn’t buy in the past few years, you now look stupid for not buying it. It‘s unbelievably a seller‘s market.”

Dunne sees that it’s also a good time for buyers. “There are so many more options than there ever has been. There are a number of opportunities when compared with the returns you could get elsewhere. The alternate investments aren’t so good.”

“This party will end,” said Fascitelli. “It’s just a matter of when. Marginal product is being overpriced.” The beauty of a portfolio is that you can put marginal products in them,” retorted Dunne, adding that you still have to offer some “gems.”

“People want to get their slice,” added Russell Appel of Praedium Group. He explained that what distinguishes his firm is that it looks to optimize the assets it acquires. “We identify something the current owner isn’t doing.” He said the firm is investing in workforce housing in infill locations and is considering acquiring properties in Central Florida that were underinsured and suffered damage in last year’s hurricanes.

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

Once you are an ALM digital member, you’ll receive:

  • 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

*May exclude premium content
Already have an account?



Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt
Live Chat

Copyright © 2022 ALM Media Properties, LLC. All Rights Reserved.