Conference Presentation, Fireside Chat, Panel
Global Opportunities in Commercial Real Estate
- Westfield plans to commence construction on a 1.4 billion euro mall in Milan approximately 8 to 9 kilometers from the city center at the end of next year, aiming to replicate its London retail strategy by targeting underserved urban niches to achieve strong returns similar to those in Sydney.
- Peter Loewy anticipates that terrorism insurance risk will transfer from global insurance markets to equity areas following the expiration of the Terrorism Risk Insurance Act (TRIA) within the next 12 months, a renewal expected to face significant political resistance.
- Ireland is projected to experience positive population growth and enhanced economic outlooks relative to other EU nations due to favorable tax structures, a young demographic, and a high-quality education system, with debt extended to seven-year terms and bond yields dropping below four percent.
- Bill McMorrow expects Ireland to offer significant opportunities in the current year and identifies the greatest prospects over the next 12 months in the western United States, UK secondary markets, and Ireland, while noting the Japanese lending market has shifted from three-year to seven-year financing terms.
- Nick Gorsh forecasts that the current market environment characterized by zero Fed funds and high spreads will persist for 1.5 years, with the U.S. CMBS market requiring between $100 billion and $200 billion to manage debt rollovers, and retail net lease debt spreads ranging from one point two percent to the high twos.
- Nick Gorsh advises a conservative investment approach with low yield expectations for the foreseeable future, focusing on safer asset classes such as retail, net lease, hospitals, and grocery-anchored shopping across the U.S., Canada, England, the Netherlands, and Germany.
- Sam Zell projects that Mexico will be the primary beneficiary of a global supply chain shift away from Asia over the next five years, specifically in the country's interior, while also identifying Colombia as Latin America's top market driven by U.S. trade agreements, a stock market merger, and the end of FARC-related conflict.
- Sam Zell expects Brazil to remain a highly attractive real estate environment due to its scale and self-sufficiency in water, energy, and food, despite a growth rate slower than the previous decade, and views Venezuela's political instability as beneficial for the wider region.
- Barry Sternlich predicts negative vacancy rates for São Paulo office markets next year as vacancy figures double while absorption remains low, and forecasts that Europe will comprise a major portion of Starwood's future investments with levels expected to triple.
- Barry Sternlich warns of social unrest risks in Europe due to 30% youth unemployment and economic performance worse than the Great Depression, while noting that the European debt market is shifting from liquidity shortages to a high-capital environment.
- Barry Sternlich expects investment time horizons in India to exceed the typical three-to-five-year cycles accepted by investors due to corruption and operational pace issues, warning that an office in India will be closed if client interest wanes.
- Barry Sternlich warns that investors holding currencies such as the rupee, real, or Russian ruble face significant losses against the U.S. dollar due to inadequate hedging capabilities, and anticipates investing in U.S. micro-markets like Charlotte offices for double-digit cash yields.
- Nick Gorsh observes a lack of discipline in the CMBS market where lenders originate and sell without holding assets, and forecasts that U.S. housing markets will move "north," aiding the U.S. consumer despite sequestration negatives.
- Peter Loewy predicts that the real estate industry is transitioning to a digital platform where online research precedes in-mall purchases, and foresees a return of bookstores to locations like Century City in modified formats.
- Peter Loewy states that Westfield expects to generate very good returns in Milan through assets with significant market penetration, mirroring successful results from their Sydney operations.
- Sam Zell believes Mexico will be difficult to outperform over the next five years as it serves as a hedge against Asian supply chain risks.
- Nick Gorsh anticipates that retail net lease growth will remain slower than office space growth within the U.S. core market, which will remain a primary focus for the firm.