(Read more on the debt and equity markets.)
NEW YORK CITY-Is a weak market really a crisis or does it mean people are just repricing risk? For pessimists, our economy is plunging into a recession, but for optimists, such as the panelists at yesterday's Real Estate Lenders Association event, there is hope in the near future.
"We will come back strong," exclaimed Paul Vanderslice, managing director of Citigroup Global Markets, at the event titled, "Capital Credit Crunch: What's Going on Here?" Vanderslice went on to explain that "this market has been good to borrowers, investors and mortgage for seven to eight years, and although the music has stopped, it will come back."
Thomas Lydon Jr., president of the City Investment Fund, said to moderator Michael Stoler, senior principal of Apollo Real Estate Advisors, that "people are just repricing risk at this time. We are readjusting to new times and new pricing, that's all this is," he said. "It will sort out over the next six months and as long as the fundamentals stay strong, we should get back on track."
As far as fundamentals go, Michael Tepedino, senior managing director at Holliday Fenoglio Fowler, said that real estate fundamentals remain pretty good. "Equity investors remain bullish on real estate and although less than before, the fact is, people are still spending money."
Tepedino and James Reichek, a managing director at UBS, agreed that they are seeing a lot of hotel activity in the market right now.
"Transactions are still taking place," Lydon said, when agreeing with Vanderslice's comment that you can still "price in this market."
After 9/11 and '98, there were around a six-to-eight month recovery for the credit market, Tepedino explained. "I think it should log around until the end of the year. We are advising our clients that if they can wait, they should. There is no reason to do business now 25% of the market is presently active and 75% are sitting on the sidelines for one reason or another."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
