Thank you for sharing!

Your article was successfully shared with the contacts you provided.

For more on the financial crisis, check out GlobeSt.com’s Webinar, “Wall Street In a Freefall—The Winners and Losers.”

SAN FRANCISCO-The doom-and-gloom opening bell of the Association of Foreign Investors in Real Estate members meeting, being held here, has given way to a more practical approach to surviving the market meltdown. A panel of debt and equity types gathered in a second-day session entitled Chaos in Capital Markets to explain how they are navigating the choppy waters. Mark Gibson, executive managing director of Holliday Fenoglio Fowler, moderated the session.

“The tone of our investors varies by their circumstances,” stated Jeffrey A. Barclay, managing director and head of acquisitions for ING Clarion Partners and one of two speakers representing the equity side. “Some are sitting on the sidelines, and others are looking for specific investments to fill out their portfolios.”

Those are the pockets of opportunity in an otherwise wait-and-see environment, he said. “But there’s no doubt that investors want real estate. The question is not whether but when.”

Charles N. Hazen, senior vice president at Hines, agreed that investors see real estate with no more a jaundiced eye than other investment vehicles, and he expressed a concept that is gaining momentum in the capital crisis, that “If you have access to debt and can low-leverage your asset, you can close deals.” But, he cautioned, selectivity “is key.”

And it’s a strategy that’s working, apparently, since Hazen claimed his shop is raising some $30 million to $60 million in capital every month.On the debt side of the table, Mark Wilsmann, managing director of real estate commercial mortgage investments for MetLife, took a markedly positive spin that stood in stark contrast to the presentations of the day before. “The crazy money is gone,” he said, “and we see the market as opportunities yet to unfold.” And he put his money where his optimism was, predicting that MetLife would close out the year with as much as $7 billion in volume.

Underwriting hasn’t altered drastically from 18 months ago, said Wilsmann since “life companies never lend on deals without coverage.” Sixty to 65% leverage on a 30-year amortization still holds, he explained.

But while the consensus was that real estate suffers no more in investors’ outlook than other vehicles, neither will it gain momentum any faster. “It’s not the real estate, it’s the capital stack that is problematic,” stated Andrew Cooper, managing director of Westdeutsche Immobilienbank.

Hazen agreed, and he stated that for the market to pull out of its current woes, it will take a re-establishment of “confidence in the system. Financial services firms have to become stewards of our trust.”

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
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information


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

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.