Summit Notebook

Exclusive outtakes from industry leaders

AUDIO – The “new normal” in real estate?

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Not a lot of goodness and cheer in the real estate industry these days.

In the first day of our annual Reuters Real Estate Summit, our first few guests were not seeing a lot of the so-called “green shoots” that other parts of the U.S. economy are supposed to be seeing.

There are still an enormous number of troubles out there — including a lack of available credit and the dire need to restructure many loans made during the go-go days of a few years ago.

While the homebuilders and their stocks have been walloped the past few years, the attention this week (so far anyway) has been on the commercial side.

When things are bad, people often choose one of two routes — 1) head down, full of despair and loathing; or 2) hoping that the worst has happened and better days are right around the corner.

No LUV for China real estate, SOHO says

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China’s real estate sector has a chilly winter ahead, said Pan Shiyi, chairman of Beijing property developer SOHO China Ltd. And he had interesting, alphabetical way of describing it.

“I look at the shape of the real estate market and I imagine it bottoming out as a letter “L”. If after the snows earlier this year, China had loosed up its monetary policy, we would have seen a “V”-shaped market. If they had loosened up before the Olympics, we would have seen a “U”. But for them to release new policies now, like reducing the interest rate, it’s already an “L”. I don’t know when the market will come back up.”

Khrushchev’s legacy lives on Russia real estate market

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pisarev.jpgThe chief executive of Russian developer PIK Group sees one guarantee of his future success in an emergency decision made by the Soviet government of Nikita Khrushchev in the 1950s. Back then, tens of thousands of cramped communal flats were unpacked and whole families residing in single rooms were resettled into their own bright and new flats in hastily constructed five story kit buildings which came to be known as khrushchevki. 

“It solved a problem for millions of Soviet citizens but the lifetime of these buildings is coming to an end,” Kirill Pisarev told the 2008 Reuters Russia Investment Summit.  “Over a million square meters of housing are in these khrushchevki, which had a planned lifetime of 20-30 years. Now they are 40-50 years old. They will survive another three, five, seven years maximum.”

Audio – The waiting is the hardest part

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holliday1.jpgFor Marc Holliday, chief executive of SL Green Realty Group and Gramercy Capital Corp, the Tom Petty lyrics ring especially true.

Holliday, speaking at the Reuters Global Real Estate Summit, said on Tuesday that his company is waiting with bated breath to hear about which company has won the award to expand the gaming options at New York City’s borough of Queens-located Aqueduct Race Track.

Audio- Brittle China developers an opportunity for funds

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David EdwardsLaSalle Investment Managers said its assets under management in Asia could double in the next three years and added it is considering investing in India for the first time. LaSalle Investment holds about $11 billion in Asia property assets under management, and plans to make $10 to $15 billion worth of deals in the next years.

Hear David Edwards, Regional Director speak about the opportunities in China as developers get squeezed by banks and his take on India.

Audio – AMP Capital on what’s hot in Japan

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AMP Capital Investors said it was planning to boost its investments in Asia properties to A$16 billion ($15.3 billion) and will start by doubling the S$300 million ($220 million) in Singapore industrial assets it has already bought.

The investment unit of Australia’s top pension fund manager AMP Ltd is also looking to buy properties, or acquire businesses such as real estate investment trusts and developers, in markets including Japan and China.

Audio – Hope you like vanilla

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vanilla.jpgPlain vanilla, in the box, straight financings are the future, or at least near future, of real estate deals, says Marathon Asset Managing Director Scott Schwartz.

“Either the Street kinda comes back and supplies leverage, or people have to get their returns without leverage. And right now we’re at a point where people have to get their returns without leverage. So that’s why there aren’t a lot of deals happening,” he said, speaking at the Reuters Global Real Estate Summit.

Audio – Bubbles are fun — for awhile

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schwartz.jpgSure thing, kids LOVE the bubbles. The blowing, the running around, the popping.

All the things that gives real estate investors and developers fits.

Any simple search on “real estate” in a news story for the past two years would more than likely also mention the word “bubble”. In fact, a quick Google search of “real estate” and “bubble” turned up 998 news stories — in the past month!

Audio – I’ll take Manhattan

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Scott Latham, one of the most powerful commerical real estate brokers in New York, says that Chinese investors are making approaches to buy Manhattan properties.

“They are coming,” he told the Reuters Global Real Estate Summit in New York on Monday. “We’ve seen them in the bidding process over the past four months on a number of assets we’ve handled.”

Audio – The hits just keep on coming!

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latham1.jpgSo much has already been said and written about the bursting of the U.S. real estate bubble, one might make the mistake of thinking that a widespread rebound is right around the corner.

Well, Scott Latham, executive vice president at Cushman & Wakefield, said on Monday that there are still some discouraging signs out there.

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