That was the consensus on Thursday, along with a heavy dose of pessimism about the economy, and commentary on everything from the lending crisis to the near-term future of the multifamily industry delivered by dozens of speakers to some 1,200 people attending the RealShare event at the Westin Bonaventure Hotel in Los Angeles.
The all-day conference and networking event was closely tied to the current state of the economy and the commercial real estate markets as well as the financial situation on Wall Street.
This year's Apartments 2008 conference included a lineup of nearly 60 speakers and panels designed to address every facet of the multifamily market, its relationship to the industry in general and other industry issues. The event featured a presentation by CMBS pioneer Ethan Penner, now with CB Richard Ellis Investors, whose talk was more like a eulogy for the market to which his name is so closely tied.
"CMBS as we know it is really gone for good," Penner said. "I think it's going to take years to fill the void that's been created by the death of CMBS." He also expressed concern for the government's bailout package, saying that "authorizing the government to outbid the market for distressed assets is a very, very scary precedent."
He added, "I am personally very, very concerned about moving down a socialist path with this country. If we preserve a semblance of the free market, this downturn will be reversible. But if we lose our free market, we're in big trouble."
Penner was one of many speakers who addressed the bailout package.The RealShare conference started with Incisive Media's Real Estate Group publisher Michael Desiato, who noted, "We are in troubled waters." Desiato was followed by a presentation from Hessam Nadji, managing director of research services for Marcus & Millichap. Nadji examined the latest economic and market conditions, presenting the Marcus & Millichap outlook for the multifamily industry and the economy in 2009.
"The government's gone from being a source of stimulation to being a source of reinvention," Nadji said of the bailout. "I would suspect that we will get another stimulus package. I expect to see the $750 billion go up."
During a panel titled "Have the Housing Crisis and Local and National Economies Hit Bottom?" Randall Zisler, chairman and CEO of Zisler Capital Partners, said, "I think it's very, very treacherous, buying apartments." Of the bailout, he noted, "I think it's going to go much higher."
Chris Thornberg, a principal with Beacon Economics, put in that lack of credit is not so much the culprit behind falling home prices and sluggish home sales, but "the problem is gravity."Thornberg, who noted that the peak median home price for the region that at one point was approaching $600,000 was just too high for most families, requiring them to spend as much as 70% of their income to make home payments.
Thornberg said he believes that when all is said and done home prices will have fallen 50% to 55% from their peak. "We're probably two-thirds of the way there," he added.
During "The CEO Panel: What to Look for in the 4th Quarter and Will it be a Preview of 2009?" Marcus & Millichap president and CEO Harvey Green addressed the prevailing economic uncertainty in the nation, saying "I really have no idea" how the economy's going to be in 2009, but Green said on a long-term basis, "apartments are without a doubt some of the best asset classes."
BRE Properties president and CEO Constance Moore stated: "At BRE we say Zen until 2010."
Among the full day of panel sessions is one that was entirely new this year, a property management session. Other panels throughout the day focused on finance and the capital markets, the impact of the housing crisis on commercial real estate, traditional and value-add investment, green buildings, technology and more.
Other highlights of the day included the presentation of a Lifetime Achievement Award to Martin Stolzoff, founder of the Real Estate Conference Group. Stolzoff is known as a pioneer in producing real estate industry conferences, including the annual RealShare apartment conference, which is now produced by Real Estate Media, a division of Incisive Media.
Stolzoff was introduced by Preston Butcher, founder and CEO of Legacy Partners, who called Stolzoff the "Paul Bunyan of this industry; he's an icon of this industry.
The crowd treated Stolzoff to a standing ovation. "I accept this award on behalf of myself and the more than 1,800 industry leaders who have spoken at our conferences," Stolzoff said. He went on to say, "I'm sure when I look back at my life, today will be one of the most memorable highlights."
Apartments 2008 is one of an annual schedule of RealShare events that are produced by Incisive Media's real estate division, which is the publisher of GlobeSt.com, Real Estate Forum magazine, Real Estate Southern California magazine and a host of other offerings. Incisive Media is a leading provider of specialist business information for commercial real estate, legal, financial services, risk management and marketing professionals.
For more RealShare Apartments coverage click here
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© 2025 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.
