built. So, the 30% [of the units] that would have been there” won’t
Hughson made his comments at a recent symposium held by
Transwestern and GlobeSt. Real Estate Forum in New York City.
Other participants included top level executives from
BentallGreenOak, AXA Equitable Life and Clarion Partners.
For these and other investors, rent control has become a key
issue to watch, and is creating, in some markets, what Hughson and
his colleagues are calling a hostile environment for commercial
“A lot of the prime markets today are openly hostile to com-
mercial real estate owners,” Hughson said. “So, where you have
regulatory environments, you have taxing environments that are
not beneficial. Chicago is not beneficial. New York is not benefi-
It is not solely rent control that has these and other investors
worried. At the same time, they are battling additional forces,
such as declining returns and other onerous new regulations that
also can make a market seem hostile to the industry.
How are investors handling these issues? With forethought and
a lot of caution. In some cases, they are recalibrating the composition of their total returns in order to fit the current market environment. In other cases, they are exploring entirely new markets that
better meet their investment profile. In almost all cases, they are
watching as events evolve and determining what that means for
WHAT WORKS RIGHT NOW
One line of defense that some of these investors have in place, is a
changing composition of total return. “In a market like this, where