Chairman and chief executive officer of Stephen Furnary shared his optimistic outlook on upcoming real estate opportunities during a panel discussion at the ULI Spring conference in Boston today, stating that the wind was at his back.
Furnary said he foresaw very good opportunities to pick up assets in the US in need of a workout, adding one caveat – cap rates would not appeal to opportunistic buyers.
The panel, which also included The Blackstone Group's managing director Frank Cohen and Prologis chief executive office Walter Rakowich, also offered up other slivers of hope.
Cohen – citing the fact that the public real estate has easier access to capital at present – anticipated an influx of transactions for high quality core assets and stabilised assets. While admitting that such deals were not inherently ideal for private equity funds, Cohen stated there would be a new role for private equity in such deals over the next couple of years.
From a selling standpoint, Cohen said that there would be increasing reason for owners to sell in the next 12 months to 24 months.
Prologis’ Rakowich added development opportunities would emerge in the industrial sector sooner than other industries, and that although they would not present themselves in the US for up to 18 months, they would appear overseas. Prologis, he said, would do a significant amount of development this year in Europe and Asia, particularly in Japan.
Asked by a member of the audience about the potential for rising interest rates, Furnary said he was not worried: “There’s a lot of pent up equity. This is a great time to be in this business”.
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