PUMPER: Randy, it’s been another good year for TH Real
Estate. How is 2017 going to end, and what do you see for ’ 18?
RANDY GIRALDO: It’s hard to characterize the firm because
there are so many different pockets of capital in different parts of
their life cycle, and their underlying investors are doing different
things. In aggregate, 2017 was a net acquisition year, but there
was also a lot of divestment.
I just had a meeting with the research people at MSCI, and I
saw an interesting stat. This was the first year that, on a trailing
12-month basis, was a net divestment from all the big core open
ended funds in the NCREIF ODCE space so that the purchases
plus capex is less than all the sales.
DESIATO: What are clients and investment committees asking you to do that they didn’t do before?
BILL MORENO: That’s easy: value add. Find something where we
can raise the top line and increase value, though we’ve seen a lot of
pricing disconnect between buyers and sellers in value-add.
PUMPER: Bill, I think over the past 12 to 15 months, you’ve
seen more good assets taken to market, not hit the 2015 valuation mindset of the sellers, and then get refinanced.
MORENO: Right. So we’ve been focusing on multifamily development and providing equity for development in markets where it’s
been a little underserved or where there are still opportunities,
and we build to core. We also do build-and-sell arrangements with
different operators, and that business has worked for us as well.
We see these opportunities in some of the smaller Midwest cities with good dynamics, and the Southeast as well. We love
Florida, and there are continue to be good basis plays in Texas.
PUMPER: A while ago, PNC and Wells Fargo pulled out of the
construction lending space. Has that impacted your lending?
MCGUIRE: About nine months ago, we identified an opportunity
in a dislocation in the construction financing market. Everything
we do is non recourse. We’ve been successful in actually originat-
RECENT NORTHMARQ TRANSACTIONS
TWO MULTIFAMILY PROPERTIES
SANTA CLARITA, CA | 639 UNITS
FREDDIE MAC GREEN
KEY LOGISTICS CENTER
LAKELAND, FL | 1,400,000 SF
MERCER ISLAND, WA | 209 UNITS
COMMERCIAL REAL ESTATE
DEBT, EQUITY & SERVICING
Lenders are playing
defense with portfolios,
trying to maintain
market share. The