MICHAEL G. DESIATO: What is your perspective on the
current state of the economy? Are we in a period of
slow growth or are we actually in a recession?
KEN MCINTYRE: Our house view is that we are in a period of
slow growth, although we are strategically operating as if we are
in a recession. We came into the year comfortable about the fundamentals, with the anticipation of continuing to put money into
real estate. But now, we have a lot of concerns about the economy. The slowdown has broadened across many markets, and
although the statistics have been improving, there’s potential for
further downside.
PATRICK DUNCAN: We are more concerned about employment growth and whether it will hold up. If it doesn’t, then we’re
going to have problems. Right now, the industry is de-leveraging. It’s going to be painful for a lot of people, but for institutions
with available capital, there will be some great opportunities. It’s
also going to be much more difficult to obtain capital for development, which could bode well for the industry.
ROD VOGEL: It’s really about getting back to basics: analyzing
how the economy is affecting particular markets and product
types as you go forward. But we’re concerned there won’t be a
strong bounce back in job creation, that it will be a jobless recovery. For the rest of ’08 and into ’09, you’re going to see slower
economic growth, and that’s going to put some pressure on
space market fundamentals.
GARY L. KAUFFMAN: Our research department thinks we’re in
a mild recession, one that will be short
and shallow. I’m not going to pretend to
know exactly how to define a recession
or whether we’re really in one. But Rod’s
point is the main one, in that the markets
and product types around the country
are very different. If you look at Texas,
some of its markets are in a near state of
euphoria economically, but there are
other places around the country that,
frankly, are depressed. It really boils
down to looking at individual markets
and product types when you make
investment decisions.
Getting the deal done is what
we live for. A singular passion
for closing every deal with a
timely precision that helps our
clients make the most of every
opportunity. Sure, we’re a
little fanatical about your
success. But honestly, would
you want it any other way?
STEVEN E. PUMPER: Dave, what’s
your view on the state of the debt
markets?
DAVID D. CLARK: The expectation was that
we’d have borrowers knocking down our
door trying to get debt money. There were
a few periods, first back last August and
then early this year, where there was a huge
slug of debt that came through. But over the
last three to four months, there’s actually
been a lack of demand. A lot of our borrowers are well positioned to sit this out,
and they’re hoping spreads will go down.
There are also very few new construction
loan opportunities coming in. We have
plenty of money and we’re anxious to get
busy again
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Debt • Equity • Investment Sales
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PUMPER: Given the spreads, might
this be the best time ever to be a
lender?
MCINTYRE: It is, certainly in the past 15
years. If you have capital now, you can
get paid for risk, which had been continually eroding over the past 10 years. We’re
also back to the point where you can discuss underwriting with your borrower and
bring structure into your deals.
What I’m seeing across the whole landscape is that many lenders, namely commercial banks and insurance companies,
are doing pick-of-the-litter deals at excellent spreads and getting very good risk-
