investor client who has made a huge commitment and they’ve
discussed our investing with them, but we don’t understand the
fundamentals of acquiring what is essentially office space for as
much as $2,000 per square foot. Student housing is an interesting
business, but it’s not one we’re in.
VOGEL: We’ve got a dedicated team and platform that operates
student housing, and they’re buying deals with cap rates that are
in the mid-sevens and they’ve typically been close to or at 100%
occupancy and they’re able to push rents. As we evaluated this
“The theory is if you get in early in the right markets and submarkets, you should o okay.”
GREG WALZ
Northwestern Mutual
Real Estate Investments, LLC
niche sector, we were a bit concerned about it for the reasons
mentioned but it’s been a very strong sector for us.
DESIATO: What’s your take on the current presidential administration, and what concerns you the most?
WALZ: What concerns me the most is that consumers and business
have started the de-leveraging process. Unfortunately, the government didn’t get the memo. They’ve taken up all the leverage that
the private sector de-levered. I’m glad that QE2 is coming to the
end. It will probably cause interest rates to go up. But there are so
many other issues, for example, what’s happening in Europe. I can’t
tell you what’s going to happen.
VOGEL: We don’t think there’s a need for QE3. How much lower
can rates go to stimulate the economy? So QE2 ends and even if
there’s a higher cost of capital, long term it will be better for the
economy. But our primary concern with the government is that it’s
just too involved. We don’t need more regulation or more oversight.
The administration has done a great job for the most part steering
us through the Great Recession, but now it’s time to let the free
market take over, and if that means higher interest rates to pay off
that debt, well, then we’ll have to absorb that.
HIGGINS: I am not the biggest fan of the current administration,
but I would echo what Rod said, that they deserve credit for navigating a dangerous time in our economic history. I am concerned that
the regulatory pendulum swings too far the other way and we get
over-regulation from the current administration that constrains
growth. As well, we need some fiscal restraint from government and
I am afraid we will also need higher income taxes eventually, as we
must reduce the deficit for long term economic health.
KAUFFMAN: De-leveraging is a very slow and painful process, be
that on a personal, corporate, state or national level. We aren’t anywhere close to being through that process at either a state or
national level. Most of the bankers are telling me that their customers are sitting on their hands and not hiring people because of the
uncertainty involved, be that regulatory or healthcare or general
economic uncertainty. It appears that only after that uncertainty is
reduced will companies be willing to put capital at risk and hire new
people. Until then, it may be a struggle to achieve the economic
growth that we need.
CARLSON: We need to give businesses confidence to hire people,
work on unemployment and make some hard decisions with regard
to cutting spending and getting the fiscal house in order.
STOLPESTAD: I’ll share one perspective from a European-based
company: I find myself increasingly having to explain why we in the
US are doing what we’re doing, and there’s increasing concern
about why we don’t see that we’re doing something wrong. I feel
increasingly on the defensive, and the more you reflect upon the
questions, the more you realize that they’re actually reasonable and
thoughtful. There’s a huge differential between activities under-taken in the European sphere versus what’s happening here in the
American sphere. Inevitably, we’re going to end up doing more of
what Europe is doing, and that’s going to be dampening in terms of
economic growth, but it has to happen. I think the US needs to do
something or eventually we’ll hit a wall.
O’DONNELL: My favorite headline of the day was “White House
Tells Greece It Must Remain Committed to Fiscal Reform.” We need
leaders with the political fortitude to say what has to be said.
Unfortunately with talk of higher taxes and increased regulation,
companies will remain reluctant to create jobs. For example, new
regulations alone will cost banks billions per year off the top line.
Where will banks find that revenue? Most likely from additional fees
to the consumer and from further cost cutting. That’s more money
getting sucked out of the economy. We’re bullish on a long-term
recovery, but it’ll likely be slower than past recoveries. ◆
Reprint orders: www.remreprints.com
AdIndex
Yardi Systems, Inc., 1
Colliers International, 3
Marcus & Millichap, 5
Stewart Title Guaranty Company, 7
Reznick Group, 9
LAAC, 11
Prudential Douglas Elliman 13
Transwestern, 15
Prudential Commercial Service, 27
Magic Financial, 30
Real Share Distressed Assets, 31
Hartz Mountain Industries, Inc., 33
Verizon SmartPark, 35
Con Edison, 37
A.J. Jersey, 38
Columbia Bank, 39
Thought Leadership, 40
Real Share Apartments, 41
CB Richard Ellis, 42
Lowenstein Sandler, Inc., 43
RealShare NJ, 45
RealShare Hotel Finance, 47
RealShare Orange County, 49
Joan’s Legacy, 50
Cedar Shopping Centers, Inc., 51
Prudential Mortgage Capital Co, 56
NorthMarq Capital, 57
Capital One Bank, 61
Rosenberg & Estis, P.C., 62
CCIM, 65
Reprints, 66
Cassidy Turley, 67
Denihan, 68
Trigold, inc., 69
Walker & Dunlop, 70
AP T Bank, 70
Winthrop, 71
Grubb & Ellis, 72
Allen Matkins, 72
Mar West, 73
Transwestern, 73
Crew Network, 75
65th Anniversary, 77
NIC, 79
ALIS, 81
Pyramid Hotel Group, 83
Lodging Conference, 85
Choice, 87
PNC Financial, C2
RealShare NY, C3
Cushman & Wakefield, C4
This advertising index is provided as an additional service. While every
attempt has been made to make this index as complete as possible, the
accuracy of all listings cannot be guaranteed.
