‘Global Leaders in Real Estate’ Tackle Tough Questions About the Market

“Unparalleled” is an adjective that is overused in real estate, but in the case of the speaker lineup at the Global Leaders in Real Estate Summit, it seems entirely appropriate.  The iGlobal Forum and EisnerAmper event, which took place at the Lotte New York Palace on September 28, featured such speakers as former governor David Paterson, Larry Silverstein, Bill Rudin, William Mack, Francis Greenburger, Andrea Olshan, and Joseph Sitt, to name just a few.

Given the turbulence in the economy and global politics today, it is undeniably difficult to analyze where the market is going.  “Stop prognosticating, because you’re going to be wrong,” said David Weinreb, the CEO of The Howard Hughes Corporation, during the first panel, entitled “The Changing Face of Real Estate and Outlook for 2018.”  “It’s a unique time for predictability,” said Silverstein in the “Masters of the Game” panel that followed.  “On a scale of one to ten, predictability is probably minus four.”  His forecast? “It’s reasonable to anticipate that the unanticipated is going to happen.” 

Anticipating the unanticipated was a major theme in Paterson’s keynote discussion with Jeffrey Moerdler, former commissioner for the Port Authority of New York and New Jersey.   During this conversation, the two talked about the threat of terrorism and its impact on real estate. 

Not surprisingly, the rebuilding of the World Trade Center was a focal point of the conversation.  Paterson asked Moerdler to describe some of the security measures in place at the new One World Trade Center.  In response, Moerdler enumerated such measures as multiple layers of dense concrete, a reinforced core, and a stairwell that is 50% wider than code requirements. 

Moerdler went on to describe a citywide effort to create more resiliency and redundancy in our buildings.  Paterson added that New York State’s Office of Homeland for Security offers a tax credit to companies that own buildings of more than 500,000 square feet and enhance security in them.   

Looking back on his years as governor, Paterson stressed the need for “vigilance in terms of countering whatever the evil plots of terrorists are,” and cautioned against overconfidence. He continued:  “I think any public official of stature right now does stay up nights.  I know that.  I’ve been there.”

Summarizing his advice on security, Paterson said:  “We have to be confident, cautious, and anxious at the same time.” 

Such a principle could just as easily apply to the advice many subsequent speakers provided.  Panelist after panelist acknowledged the anxiety-provoking uncertainties of the market, described their own cautious reactions, but also expressed confidence in the future.  Despite the turbulence around the world, there is much stability to be found.  And real estate continues to attract capital because it is an attractive alternative to other forms of investment, such as credit.

“There were varying degrees of market confidence among the panelists, but the overarching message of the Summit was one of reassurance,” said Kenneth Weissenberg, partner and chair of EisnerAmper’s real estate practice. “Attendees left the event with the perception that equilibrium is not out of reach.” 

Anyone still feeling anxious or unsure of how to proceed in today’s environment would do well to adopt a strategy advocated by Denise Shull, decision coach & performance architect at The Rethink Group.  In a private dinner that followed the Summit, she spoke with David Gilbert, the chief executive officer and chief investment officer of Clarion Partners, about the psychology of emotion and its effect on high-level investing in real estate. 

According to Shull, it’s important to get comfortable with your own “spectrum of fear.” As she explained, by “owning” the fear, and -- even better -- describing it with specific words, “you will make fewer impulsive, short-sighted decisions.” 

For anyone operating in today’s real estate market, that is good advice.  Decidedly.