As the private equity real estate industry looks to 2010, just where will the opportunities come from?
In the US, the future remains relatively uncertain with distressed real estate assets, and indeed sellers, only slowly starting to emerge with many banks and borrowers eager to extend pending debt maturities.
Here we present the thoughts of two senior professionals who attended a special PERE breakfast on the fringes of the annual fall Urban Land Institute conference in San Francisco in November.
The following extract is the final summary of those 16 professionals’ perspectives on 2009, and their thoughts for 2010. The full article appeared in the Dec/Jan issue of PERE magazine. Click here to view, subscribers only.
William Scully, Managing Director,
Cerberus Real Estate Capital Management
Things are much less clear today, according to Scully. “In the early 90s you had the RTC and you had two large players, GE and Goldman Sachs, with their cheque books open and who were buying pools of assets. It helped reprice the system and it became very clear to a number of us how the rest of the system was going to re-price. It is much less clear today how that process is going to unfold.”
President, Shorenstein Properties
A failure to recognise that real estate is about fundamentals, not just an economic recovery, is a failure to understand real estate, Shannon says. “Real estate isn’t a trading business, it’s about owning things, cash flow and value at the property level.” As such there will be greater emphasis in the future on a GPs ability to actually operate an integrated portfolio of assets.