46 GLOBEST. REAL ESTATE FORUM SEPTEMBER 2019 www.globest.com/realestateforum
The panelists included Carrie De Wees, portfolio manager at
Allstate Insurance Co., Jim Halliwell, managing director of
Principal Global Investors, Rob Mason, executive director of
PGIM Real Estate, Paul Hanson, a managing director of
Northwestern Mutual Real Estate, Brandi Radovitskiy, a senior
asset manager at Travelers in the real estate investment group,
Pritesh Patel, head of US Real Estate Investments at Manulife /
John Hancock and Scott Cote, executive vice president and co-
head of Real Assets at Aegon Real Assets US. Though we do not
have a crystal ball to tell us what path to take during these end
days, the aggregated knowledge of this group gets us pretty close.
Following is an excerpt from that conversation. It has been
edited for clarity.
EQUITY INCREASES FOR APARTMENTS, INDUSTRIAL
Panelists are approaching this piece of the cycle cautiously, while
still on the lookout for new opportunities.
This year, for example, Northwestern Mutual Real Estate is
increasing its amount of equity placements, especially in the apartment and industrial sectors.
Lately, the company has shifted towards acquisitions—
AN INDUSTRIAL EMPIRE IN THE US SUNBELT
Hanson said that this year, half of the company’s equity produc-
tion may well be in acquisitions—after being primarily a devel-
opment shop for years. The company decided to prune its
portfolio after a good look at the environment, Hanson said.
“It’s a good opportunity to take some gains and harvest those
and bring new properties into the portfolio. So we’ve been look-
ing to maintain the size of our accounts at least or potentially
Real estate still looks relatively dry, so Northwestern Mutual
continues to invest in it, Hanson said, “despite how I might feel
sometimes—being in the market.” Regardless of the occasional
qualms about time, real estate offers strong returns, whether it is
for acquisitions or for development, for land or for deal struc-
tures with developers, he added. “We’ve looked for opportunities
where we think we can find something that has replacement costs
or close to it, and/or in markets where we can necessarily
develop,” he said.
For years, PGIM Real Estate has primarily been focused on joint
venture multifamily development. The company stays competitive
by being “extremely picky on submarkets,” Mason says. Industrial is
also a big focus, he adds. “We want to grow the industrial portfolio,
so our focus has been on building an empire in the Sunbelt for the
The team is on track to meet its goal for the year, however, he
added that the environment for deals is getting more difficult to
navigate and it takes more calls to get a transaction done. “You’re
having to have 20 balls in the air to have two kinds of hits,” he said.
REPURPOSING LAND FOR MULTIFAMILY DEVELOPMENT
Patel of Manulife / John Hancock noted that over the last few years
the company rebalanced its portfolio, reducing its book of nonstrategic assets in the office area. “We’re looking to increase our multi-family and our industrial exposure,” he said.
The company is also repurposing land where it has assets and
developing multifamily product on it. “We’ve got [residential]
developments going on in Midtown Atlanta, Washington, DC,
Boston, San Francisco and San Diego,” he said. Doing so provides
a competitive advantage for cost basis because the land base is close
to zero, he said.
A Close Up View of the End of the Cycle
. . . continued on page 48