Moderator Jeffrey Rothbart, principal of Boulder Net Lease Funds, began the opening panel "the Numbers Behind the Trends," by turning to panelist Farrokh Hormozi, senior economist at Pace University/Kish International University, for some background on what we are seeing in the market today. "We are in a state of flux," Hormozi said. "whatever policy makers are calling it," he said referring to whether or not we are in a recession, "the economy is suffering."
[IMGCAP(2)]Hormozi pointed out that the American economy was heading towards a recession before the subprime crisis hit because of fundamental problems including: income gap; under employment; oil prices; and exchange rate among other things. "I believe that the American economy is strong, but we are in trouble."
Lou Weller, principal of Deloitte Tax LLP, highlighted a few key findings in his recent data. He explained that exchange dollar volume went down in 2007, but not as much as frequency and he noted that approximately 10% of initiated deferred exchanges fail.
As far as the CMBS market goes, David Sobelman, a VP at Calkain Realty Advisors, told the audience that that the CMBS market has essentially dried up. "Debt is still available; it just depends on the source. We are changing sources right now." Other panelists throughout the morning agreed with Sobelman. During the "Capital Markets in Today's Environment" session in regards to the CMBS market. Brett Kaplan, SVP of US Realty Advisors said that the CMBS market is "all but dead at the moment."
Kyle Gore, managing director of the real estate net lease group at RBS Global Banking & Markets, said during the capital markets panel, that "in today's environment, we are focusing on the CTL market. Conduits are clearly flat on their back."
Barclay Jones, EVP of investments at iStar Financial, said that "a year ago, we were buying and selling product that was very competitively shopped. Today there is much less of that."
In today's market, "it is back to basics," said Peter Budko, EVP and CIO of American Realty Capital. "We are taking what the market gives us."
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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.
