Debt Market Regulatory Concerns Yet to Impact Big Banks
Chip Fedalen, Group Head, Wells Fargo Group
On ULI’s Debt Market Conundrum panel, expert lenders weighed in on the borrower environment for institutional capital. Panelist Chip Fedalen of Wells Fargo netted one of the bank’s best years in production in 2011, and he shows no signs of slowing down in 2012. Fedalen weighs in on the regulatory concerns facing the commercial lending environment, including Dodd-Frank and Basel 3, which may have unlikely consequences that could impede lending.
Life Companies in the Lending Front Seat
Mark Wilsmann, Managing Director, Head of Real Estate Portfolio Management, MetLife
The ongoing dysfunction in the CMBS market is putting life company leaders on top of the debt markets. Mark Willsmann describes how he has found unique lending opportunities in regional malls. He expects the landscape to remain friendly for life companies.
Agency Reform Takes Center Stage at ULI
Michael Berman, President & CEO, CW Capital
At ULI, the Battle for the Multifamily Market panelists debated how the European contagion and U.S. economic slowdown have caused a slowdown in the market. Lenders-apart from Fannie Mae, Freddie Mac and FHA, which have provided consistency in the market-have slowed down. ULI Panelist and CW Capital CEO Michael Berman tells how the rental market remains the most attractive segment of the commercial real estate market today. He also cautions that the agency reform debate has already started on Capitol Hill, and describes the steep education hill the industry has to climb to educate the regulators on the important liquidity the GSEs provide to the multifamily sector. Berman urges the commercial real estate industry to raise support for the debate now.
Investors Hunt for Yield
Tom Fish, Co-Head, Executive Managing Director, Real Estate Investment Banking, Jones Lang LaSalle
On the ULI panel Awash in Equity, Jones Lang LaSalle’s Tom Fish moderated a panel of capital sources all searching for yield. Equity providers today have a greater need to place capital than they need to harvest it today. Fish describes how the panelists are aligning with JV relationships and the brokerage community to get the competitive edge. The panelists believe that commercial real estate still provides the best investment strategy on risk-adjusted basis than the alternatives in today’s market.
Diminished Confidence Weighs on U.S. Office Sector
John Sikaitis, Director of U.S. Office Market Research, Jones Lang LaSalle
The volatility and turmoil caused by the U.S. and European deficit and long-term debt concerns are causing corporate confidence levels to diminish, which directly correlates to employment growth–or lack thereof-and absorption of office space. Jones Lang LaSalle’s Director of Office Market Research John Sikaitis addresses how while the U.S. office markets continue to absorb space, leasing activity levels have dipped quite noticeably in recent months, highlighting the diminished confidence levels. Markets with heavy technology and energy are the bright spots in terms of office market recovery with a large dichotomy existing between markets in these sectors and the rest of the country.
European Impact on the Home Front
Greg O’Brien, CEO, Americas Brokerage, ULI Panelist
The European debt contagion was a main topic on the agenda throughout the ULI fall conference. ULI Panelist and Jones Lang LaSalle Brokerage CEO Greg O’Brien describes how the debt crisis impact isn’t limited to Europe, as concerns spill into the United States. He describes how European-controlled companies are looking for savings in their domestic portfolios and turning to outsourcing as potential solutions. He cites a future expectation for more mergers and acquisitions, and believes rthat will drive greater need for workplace strategy.
John Huguenard, Managing Director, Industrial Capital Markets, Jones Lang LaSalle
In the first-half of 2011, there was a great deal of investor interest in industrial assets and that demand spread into the second tier markets by mid-year. Jones Lang LaSalle’s John Huguenard describes the how industrial offerings slowed by the third quarter and the market experienced a pullback from the buying community. He cautions that there is still a great deal of capital flowing into the industrial product.