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HOME > Marketplace Reflections > issue 114
"Nothing can stop the man with the right mental attitude from achieving his goal; nothing on earth can help the man with the wrong mental attitude." Marketplace Reflections: Issue 114We hope you enjoy this edition of MARKETPLACE REFLECTIONS. Dudley & Associates has been engaged in Executive Search and Recruiting for the commercial real estate and construction industries since 1983. Our web site is www.DudleyandAssoc.com. The phone number is (626) 564-0800. ANNOUNCEMENTSOPPORTUNITIES311 S National Partner, Build-To-Suit(Denver, CO)Our client has an outstanding record of providing quality BTS development services to corporate clients nationwide. Product types include industrial, office and medical. Your role as an equity partner is to provide team leadership and business development to fan and increase an already blazing fire of opportunity for the company and yourself. Bring your expertise and passion, and set them free in a dynamic private firm. If your successful record of accomplishments includes serving the Fortune 1000 in this manner, you might want to strongly consider this unique opening. Your confidentiality is secure. Contact Sayres Dudley at asdudley@dudleyandassoc.com312 S National Retail Development Partner(Open Location)This dynamic, respected and well capitalized private developer, with offices nationwide, has opened a new equity partner position. Your role will be very diversified. Call on national retailers to negotiate development agreements. Assist and lead existing development teams on major retail and mixed use projects. Work with executive team to open new retail development offices nationally, and help strengthen current offices. Double production and profits in the next few years. This partner role can operate from any present office within the company. It is like running your own business, with someone else’s capital. Interested? Excellent. Contact Sayres Dudley at asdudley@dudleyandassoc.com314 S President of Investment Services(Southeast)Transition your cutting edge regional acquisitions knowledge in office and industrial to help elevate and transform the investment platform at this Southeast based private investment company. Knowledge of Southwest, Midwest, and Southeast markets with significant broker relations, plus exceptional team leadership skills will drive your success in this newly created role. You will be a member of the Management Committee and have direct regular involvement with the Investment Committee. This multi-disciplinary role will also include leading, directing and mentoring the younger members of the acquisitions team through the underwriting, due diligence and purchase or sale phases for all assets. Contact Sayres Dudley at asdudley@dudleyandassoc.comMEETINGSApartments 2008October 2, 2008 The Westin Bonaventure Hotel, Los Angeles, CA For more information please visit http://www.almevents.com/conf_page.cfm?instance_id=28&web_id=1138&pid=749 Tenant-In-Common Association - TICA's 5th Annual Conference October 5-7, 2008 The Wynn Hotel, Las Vegas, NV For more information please visit http://www.ticassoc.org/sections/events.conference.php
NAIOP Development ‘08 ArticleOn July 10th, Kathy and Sayres attended a very important capital markets panel sponsored by LACRA which gave the audience a regional and national perspective on current market conditions. The panelists, representing four major companies, included Christopher Chee of Blackstone, Richard Pink of ING Clarion, Mike Von Konynenberg of Eastdil Secured, and Scott Word of Legacy Partners. The moderator was Jay Borzi of Eastdil Secured. Just to give some perspective, the four companies either purchased or transacted $74.2 billion in real estate in 2007.To start things off, Jay asked the panel what some of their plans were for 2008 and 2009. Chris indicated that Blackstone has an active capital raising campaign going with a goal of $10.9 BB, plus a special situations fund of $500 MM and a European fund of $6 BB. Scott shared that Legacy Partners is raising $450 MM in equity on their third discretionary fund. They plan to actively pursue product in Northern and Southern California, primarily in office and industrial. They are also planning to buy back some of their debt at a discount. Mike said that Eastdil is working with a number of banks and corporations who are deleveraging and working with other borrowers to restructure their capital stack. Richard talked about ING’s platform in representing their foreign buyers, especially Middle Eastern sovereign wealth funds. This led to a discussion on the strategies being deployed by overseas investors in U.S. real estate. With certain pension funds pulling out of real estate because of allocations, foreign investors are filling some of that gap. Richard indicated that 40% of the current available U.S. capital is from foreign investors, primarily buying in the core markets of LA, SF, NYC, and WDC. For ING, their investors buy premier assets, all cash, and are willing to hold longer because they feel the U.S. is a safer haven for most assets. Because they are willing to take some risks, those investors are looking for a 15-18% yield. It is the yield, not necessarily the asset’s location or trophy name, which drives their decisions. Mike agreed, stating that many Middle Eastern investors are Ivy League or Cambridge educated with a strong financial foundation, so they clearly look for the yield. Chris stated that Blackstone represents a Chinese sovereign wealth fund, which has a 10% ownership stake in Blackstone. He and the other panelists also agreed that Korean, Japanese, and Chinese buyers are all now actively looking for U.S. real estate. The discussion then focused on distressed assets. Some of Blackstone’s activity will be focused in this area over the next two years. Mike shared that they have not seen many defaults on the income property side yet, but with large loans secured by residential lots, opportunities to buy paper will begin to emerge. The panel closed with their thoughts on the best investment values in Southern California. Scott indicated that Legacy will be looking at industrial and some office. Mike believes that retail and hotel are the strongest assets, but sellers are not yet realistic in their pricing. Chris is looking for hotel and office and Richard believes industrial and some specialty retail will be the best buys in the near term. All four men confirmed that their companies have tightened their underwriting, built in cushions, and are focusing on rent growth and their exit cap. Sounds like solid investment strategies to us, in a volatile and changing market. Stay tuned… Have a great week! Sayres & Kathy Dudley
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