Summit Notebook

Exclusive outtakes from industry leaders

Audio – Treasury Secretary Paulson proven wrong on housing, Toll CEO says

-

henry-paulson.jpgA recent spate of weak indicators in the housing industry shows that U.S. Treasury Secretary Henry Paulson (pictured) was mistaken in May, when he predicted a near-term end to the housing correction, Toll Brothers Chief Executive Robert Toll told the Reuters Global Real Estate Summit.

Click hear to hear Toll’s take on how happy days have not yet returned to housing.

Audio – Homebuilder CEO supports mortgage industry regulation

-

robert-toll.jpgMortgage industry excess has led housing into a “black hole,” the chief executive of luxury homebuilder Toll Brothers told the Reuters Global Real Estate Summit.

In an era when mortgage brokers are paid on commission, government intervention is worth the risk of overregulation, Robert Toll said. 

Audio – Toll sees political cycle influencing housing cycle

-

toll.jpgConfidence may begin to return to the U.S. housing market once the U.S. political parties have chosen their candidates for the next presidential election and people can start to feel more optimistic, according to the Chairman and CEO of luxury home builder Toll Brothers. As a result Robert Toll considers the earliest likely pickup in housing demand will be next spring. “I see no reason for it to come back until there is a change in confidence and I see no reason to expect a change in confidence of the body politic, the society in general, until probably April.” At that stage the candidates will probably be focusing Americans on how things can get better “rather than focusing on what is wrong and bad and what’s pretty horrible and how are we ever going to get out of the mess we are in.”

 

 

Audio – Mortgage Bankers Association sees housing market bottom by early 08

-

The housing market could hit bottom by early 2008, Mortgage Bankers Association Chairman John Robbins told the Reuters Global Real Estate Summit.

Historically, housing downturns last between 24 and 30 months, and this one started on July of 2005, which means an end might be in sight, Robbins said.

Audio – Might Chinese sporting Gucci sunglasses buy Toll Brothers houses?

-

sunglasses.jpgToll Brothers Chief Executive Robert Toll is seeing a link between Chinese people wearing Gucci sunglasses and a business opportunity. And that’s one reason he is about to send a team to scout out possible homebuilding joint ventures in China’s first and second-tier cities, Toll said at the Reuters Global Real Estate summit.

China’s a solid prospect for Toll because its expanding and aspiring middle class has already encountered the company, which bills itself as “America’s luxury homebuilder,” on the Internet, he said.

Audio – To park easy in New York City, try the 16th floor

-

dottie-herman.jpgThe housing downturn lingers, but you’d never know it in New York City, where everybody from empty-nesters to new parents are clamoring for housing, driving up prices and inducing developers to offer increasingly opulent amenities, Prudential Douglas Elliman Chief Executive Dottie Herman told the Reuters Global Real Estate Summit.

A downtown development even boasts in-building parking, and not in an underground or rooftop lot. Apartment owners will drive into a car-sized elevator and park right next to their home.

Audio – Centerline to launch distressed real estate debt fund

-

marc-schnitzer.jpgThere’s gold in distresssed real estate debt, for those who know how to pan for it, Centerline Capital Group Chief Executive Marc Schnitzer told the Reuters Global Real Estate Summit.

As early as the end of the year, Centerline plans to put together a new fund that will seek to make investors money by aggregating troubled real estate deals, put back together by Centerline. 

Audio – Scoring points with subprime mortgage guidance

-

The five regulators writing stricter guidance on subprime mortgage underwriting haven’t finalized a date for its release, though it should be very soon, said Scott Polakoff, senior deputy director and chief operating officer for the Office of Thrift Supervision, at the Reuters Global Real Estate Summit

The Mortgage Bankers Association, the largest trade group representing bankers, last week suggested discord among regulators was hampering the final guidance. But all regulators, which include the OTS, the Federal Deposit Insurance Corporation, and the Federal Reserve, are on the same page in terms of what they want to accomplish, Polakoff said.  

Audio – Cranes cast long shadow over real estate business

-

alec-burger.jpgWhen one of the leaders of General Electric’s real estate operations travels to scope out opportunities in the U.S. or elsewhere, he uses his plane’s landing as a chance to scan a city’s skyline for an overabundance of cranes.

Too much construction is often a bad sign, indicating excess supply and possibly disappointing prices, Alec Burger, head of GE Real Estate‘s North American lending division, told the Reuters Global Real Estate Summit. Of course, the parent company might not exit a crowded skyline emptyhanded — GE’s leasing arm helps builders obtain cranes worldwide.

Audio – Jones Lang CEO says days of big real estate deals are over

-

dyer.jpgThe days of multi-billion dollar deals for real estate companies, such as Blackstone Group’s $23 billion purchase of Equity Office Properties earlier this year, are probably over — at least for now. That’s the view of Colin Dyer, the CEO of Jones Lang LaSalle, which is one of the largest real estate services firms in the world. “That may have been the last of the big deals that gets done in this current market,” he told the Reuters Global Real Estate Summit in New York in reference to the Equity Office takeover and a $15 billion deal for residential real estate firm Archstone-Smith. Dyer said that lenders were being more cautious and that the opportunities to flip, or onsell, properties quickly had diminished. That doesn’t mean there is a drop in the demand for real estate – Dyer said he sees volumes of transactions remaining strong — but that the large aggressive deals won’t get the financing nearly as easily as in the recent past. 

  •