Conference Presentation, Panel
Global Opportunities in Commercial Real Estate (mobile)
- Westfield plans to commence construction of a 1.4 billion euro shopping mall approximately 8 to 9 kilometers from Milan's city center towards the end of next year, mirroring a strategy of serving underserved markets previously applied in Sydney and London.
- Westfield's Shepherd's Bush and Stratford assets generated combined sales of approximately 2 billion pounds, with individual locations reporting figures of 980 million and 950 million pounds respectively in their first years of operation.
- Sam Zell forecasts that Mexico will be difficult to outperform over the next five years as a structural hedge for manufacturers shifting away from Asia, while Brazil remains fundamentally attractive but slower, and Colombia is identified as the top Latin American opportunity due to FARC's dissolution and oil production rising from 100,000 to 900,000 barrels per day in the last five years.
- Peter Loewy and Bill McMorrow assert that Ireland has resolved its debt issues by extending obligations to the EU over a seven-year period, attracting over 500 U.S. companies including Google which occupies 600,000 square feet in Dublin, driving rents higher and reducing vacancies to nearly 95% in premium areas.
- Lou Feldman projects that global collateralized mortgage obligations are rising and new capital available for investment in 2013 will total approximately 320 billion U.S. dollars, representing a 3% increase from six months prior, with equity growth offsetting lower leverage requirements, though capital deployment remains weak in the EMEA region.
- Barry Sternlich warns that European economies are performing worse than during the Great Depression, citing 30% youth unemployment and social unrest as the greatest global risk, while predicting high unemployment in France and negative vacancy trends in São Paulo despite some liquidity.
- Nick Gorsch identifies the U.S. as the primary core market offering lower return standard deviation compared to emerging markets, where rental rates for net lease retail space are growing slower than office space and capital is flowing into the UK, Germany, and the Netherlands, while lenders remain unwilling to finance short-duration leases.
- Lou Feldman observes that inflation remains tame despite central bank balance sheet expansion, with private and institutional investors increasing real estate capital deployment and cash moving out of the sidelines, although European office rents are falling and unemployment is rising.
- Bill McMorrow notes that a third of over $8.5 billion in acquisitions has occurred in the UK and Ireland due to increased liquidity and American bank lending, creating significant competition for equity capital primarily sourced from the United States.
- Peter Loewy describes a bifurcated U.K. economy where London is highly active while the rest of the nation lags, and emphasizes that investing in assets with major market penetration yields very good returns.
- The panel anticipates a personal "Bar Mitzvah" celebration occurring directly after the seminar for Lou Feldman, marking his 13th year moderating the event.
- Peter Loewy cautions that Ireland and other European markets are being significantly impacted by the presence of California-based tech companies, contributing to local economic shifts.
- Barry Sternlich states that India's investment cycle is too long for current investors, leading to the shuttering of their office there, while predicting that Brazil's economy did not recover as expected despite interest rate cuts and that returns from parts of South America and Europe do not justify the associated risks.
- Sam Zell predicts that the passing of Chavez is beneficial for Venezuela and that the current administration is unlikely to remain dominant, while noting strong connections continue between the U.S. and Latin America.
- Barry Sternlich predicts that investors will lose significant value when holding currencies other than the dollar, such as the rupee and rial, and suggests that Japan is conducting a unique experiment regarding high debt-to-GDP ratios.
- Nick Gorsch predicts that the current market situation is an aberration creating a specific opportunity window for the next year to year and a half, though borrowing rates in the net lease sector are in the high twos to threes with spreads around 500 basis points in the U.S.
- Lou Feldman notes that while the U.S. has recovered capital, the balance of market share between the Americas, Asia, and EMEA has reverted to 2000 levels, and Europe is in a recession.