What do your future investments look like?
EisnerAmper Partner Lisa Knee asks the panel what their investors are looking for, the tools their investors are using to evaluate the market, the balance of supply and demand in real estate, and how they are planning for the “second half” of the real estate cycle.
Lisa Knee: What are you doing now to poise yourself for the future, and current investments that you have and future investments that you're going to make with everything looming on what's going on in today's environment?
Samantha Davidson: Well I think it's a couple of things to think about and it really is a question of kind of what's your outlook on the market. And what's interesting is, while I think in some ways you could maybe get to a consensus after we spend a day in the room, if you spend individual time with investors the way we do, you really see that there are only a handful that are, what I would say particularly pessimistic. There's a large group that's relatively cautious and then I would say a group that is what I almost would put in the moderately optimistic category. And really that ends up being a function of where you're playing and really the true competition that you are facing in your market. But in terms of tools, I think we are seeing and actually relying on investors to start using tools, particularly in the portfolio construction side.
Hugh Macdonnell: So we're not first half of the cycle anymore, I think we're clearly second half. So start there. We manage portfolios and a couple different formats and I'd say we are doing all the things in the ordinary course that you'd expect to do in the second half of the real estate cycle. So we are de-levering where we can. We've done significant pruning, especially in ‘14 and ‘15, of perfectly great assets but assets that we as a long term holder - lots of our strategies are sort of long-term in core - as a long term holder things that we don't want to hold through the next cycle because we think there'll be marked down disproportionately. So industrial space, 20 year old infill buildings that are great buildings but maybe we think they're going to perform less well, notwithstanding what David said, which I agree with. So that would be an example of things that we're doing right now just to be defensive and thoughtful. And what brings every real estate cycle to an end is a supply demand imbalance. And we fundamentally think that the demand drivers in the US, relative to other countries in the world, the demand drivers in the US are strong. We think they will continue to underlie moderate growth, slowest growth coming out of any recession, slow, moderate growth, [we] foresee that continuing. That could taper off and lead to a pause. But the growth is actually pretty good and pretty steady in the US, and supply again, coming out of the mid-2000’s, supply is more moderate than it's been at any other time in any other sort of real estate cycle that's been studied. So supply’s moderate. There are pockets, there always are. Go to Miami: cranes, buildings, tons of supply coming. There’s supply in residential in New York City, there’s supply in San Francisco. There's pockets where there's lots of supply. But on balance across the country, across the regions, across the sectors, the supply outlook is great. It's been very moderate. Supply in industrial ticking up a little bit, supply in apartments ticking up a little bit, but that's all good. Supply in retail: nothing. And that's consistent with the themes that David just alluded to. Products or goods or services are moving through industrial buildings and not through retail, so retail: supply down, industrial: supply up.
Recently EisnerAmper’s Real Estate group hosted the Fourth Annual Real Estate Private Equity Summit. The event brought developers, investors, owners and operators together to discuss what’s happening on the real estate front.
Panelists share leading trends in the industry, including the reallocation from stocks and bonds to real estate assets as well as the evolution of foreign investment and the institutional investor's development of risk.
With the economy in an active investment phase in debt and restructured products across the capital stack, panelists discuss opportunities they see, including transitional assets, different geographies, and non-traditional banking resources.
Panelists describe their outlook on New York and other gateway cities, looking across geographies, asset classes, and property types, as well as slowing job growth or just continued modest growth in general and retail and residential vacancies.
Panelists discuss the process of bringing in foreign capital, the criteria that foreign investors look to in U.S. properties, and what kind of investments they are looking to make.
EisnerAmper Real Estate Private Equity Summit panelists Kenneth Weissenberg, Jonathan Kaufman Iger, Leslie Himmel and Phil Watkins discuss whether the market is in a period of correction, and what’s ahead for vacancies and pricing.
With a slight decrease in sales volume and a slowdown in the land market, Real Estate Services Partner Lisa Knee asks panelists to share the key buying and selling trends on the horizon, including insights on residential product.
Panelists discuss the impact of Brexit, 421A and EB-5 on foreign investment in the United States, and the effects of that capital on development in gateway cities - there's a strong trend of non-US capital continuing to come and invest in the US.
Real Estate Services Chair Ken Weissenberg speaks with panelists on the topic of where capital is coming from in today’s market, how accessible it is for new projects, and the reality of debt and equity chasing real estate.