Views of 2009: Kelly DePonte and Dan DiLella

Interviewed at the PERE Breakfast Club: ULI 2009, Kelly DePonte, partner at Probitas Partners, and BPG CEO Dan DiLella, expect the real estate bottom to be a bumpy ride.

Trying to time the bottom is an almost impossible feat. Few real estate investors have ever truly succeeded in timing things perfectly.

However, one thing property investors agree on as they look to the next 12 months is that 2010 will be a bumpy ride with the industry finding – or even leaving – some form of “bottom” in the second half of the year.

Here we present the thoughts of two senior professionals who took part in a special PERE breakfast hosted on the fringes of the annual fall Urban Land Institute conference in San Francisco in November.

Over the course of 10 days, PERE is presenting a summary of those 16 professionals’ perspectives on 2009, and their thoughts for 2010. The following are edited highlights from an article that appeared in the Dec/Jan issue of PERE magazine. Click here to view, subscribers only.

Kelly DePonte, Partner Due Diligence and Research
Probitas Partners

2010 could prove to be the “best vintage year” for those fund managers that survive the current real estate downtown, however for DePonte not all will make it that far. “The industry is in triage and some very hard decisions are going to have to be made by LPs and GPs. For LPs it now comes down to who do I back?”

Dan DiLella, President and Chief Executive Officer,
BPG Properties

With distressed assets coming to market on a “very selective basis”, the US real estate industry is “bumping along the bottom”, according to DiLella. However, capital is waiting to pounce. “There are plenty of active funds out there.” The question is will they be able to achieve those 20 percent-plus returns ever again?