REIT CEOs: Market Top Still To Come

NEW YORK CITY-Sky-high asset valuations aren’t over, and a continuation of a super-heated market is in the near term cards, although the market does pose some problematic anomalies. That was the upshot of a lively discussion of CEOs at a luncheon session at REITWeek on Wednesday. The event also offered an interesting exchange between EOP driving force Sam Zell and would-be buyer Steven Roth of Vornado Realty Trust.

Despite the fact that “everyone” wants to claim we’re at the top of the market, mega mergers as well as major asset sales are going to be with us for a while, Zell stated. GE Real Estate president and CEO Michael Pralle agreed, noting that bucking the general wisdom that the market is about to turn has caused “stomach-turning” deal decisions in his shop. “The most quoted phrase in our office is that every deal we make is a mistake,” he commented.

Further countering that general wisdom, “The biggest surprise is coming,” said Roth, “and that is that rents will continue to rise and make the current prices seem right on the money.”