February 8, 2011
post contributed by Megan Flynn
Myron Kandel, Founding Financial Editor of CNN, moderated our Roundtable, Commercial Real Estate - Navigating the Fallout: Opportunities and Pitfalls Ahead. The topic and expert panelists drew a significant crowd at the Princeton Club last Wednesday despite two popular concurrent industry events.
Mr. Kandel began by acknowledging the words “Commercial Real Estate” alone can send shivers down anyone’s spine, but added that the topic also presents extreme opportunity and excitement.
These extreme reactions are justified by the profound and sometimes inconspicuous effect the viability of the Commercial Real Estate market has on the financial community. We are now emerging from a period in financial history that demonstrated the potential consequence of every underlying asset on our balance sheet. We have also been compelled to recognize the elaborate interconnectivity real estate has with our investments. Even the speculative Commercial Real Estate bubble that has begun to emerge has the potential to cause considerable repercussions.
The Managing Director of Cerberus Real Estate Capital Management, Paul Fox, sat center stage Wednesday. The discussion began with some entertaining banter between Fox and Kandel which set an upbeat tone for the evening. He described himself as an opportunistic investor, “Every few years we’re looking at something else”. He discussed the potential the real estate market has right now and where “tremendous opportunities” currently lie. Real Estate is not that complicated, he said, but the challenge is that it is such a broad field - It takes a lot of experience to navigate.
In the left most seat was Joe Bassil, Managing Director of Nord/LB where he is the head of Real Estate North America. In the current market environment, he described himself as a cautious optimist. “I’m not the opportunistic guy,” he said, “I’m looking for steady growth.” Bassil carefully and articulately described his real estate investment style explaining how he looks for outstanding quality in many different areas of potential investments. “You have to take the safe approach and look at things” he said while pointing out his personal responsibility to protect clients and bank capital.
Steve Kohn, President of Cushman & Wakefield Sonnenblick Goldman, LLC sat on the audience’s right and gave opinions of optimism. “We had a drastic fallout,” Kohn stated, adding that the primary markets have only partially recovered, but “Low interest rates have saved us”. To the benefit of those in attendance, Kohn took the opportunity to go into detail when Kandel bluntly asked, “So tell us what’s going to happen.” Kohn currently describes himself as “mildly bullish in the major markets”, however, he did add that there is a lot of obsolete real estate out there right now that will go by the wayside.
The Commercial Real Estate expertise presented with Myron Kandel's respected wit was a welcome format change for the roundtable. Bringing topical speculations and concerns to the forefront of discussion, especially given the recent history we all weathered, is essential due to the potential rippling effect they could have on our community. Educating members regarding powerful catalysts like Commercial Real Estate is a priority of the NYHFR and we would like to thank our panelists for providing insight into the immensity of their industry and sharing with us experience that will better prepare us for the future.