Obama failed at the G 20 to accomplish anything useful and followed that by failing to conclude the S Korean trade agreement because he wanted to retrade a done deal. Geithner was no better. Instead of solving any of the major issues that simply left the situation in their version of extend and pretend, except this is far more serious than a loan extension. The total lack of leadership by the current administration and the refusal to deal with the deficit at home, has only served to make the world situation worse.
The implications for the US economy and real estate values is not positive. We now have capital moving to Brazil and other emerging markets in huge amounts to gain yield and a better currency outcome. While the low dollar may seem like it will attract foreign capital to invest here, there seems to be a bigger concern that the administration is not dealing with the real issues and is willing to devalue and potentially set off a trade war through currencies. Everyone but Obama and Pelosi seem to have heard that the voters recognize we have a major problem with deficits and a stalled economy. Pelosi wants to have a party to celebrate what they have done, even though the voters revolted and rejected. And now she says she will stay as party leader to fight any attempt to make things right. Does anyone think foreign investors see what is going on as a positive for investing in the US real estate.
Obama can’t even lead on taxes, and waffles all over the place. Harry Reid, who bussed casino workers to the polls and paid them with K Mart prepaid cards, is still there and still saying we will not back down on raising taxes for anyone over $250,000. The Tea Party crowd, led by that terribly misinformed father son team of Ron and Rand, want to eliminate our central bank. That really helps build confidence in foreign investors. US investors are no more confident and have begun to move substantial amounts of capital to more promising nations.
As I have traveled over the past week and in speaking to a wide variety of my friends involved in capital markets, real estate and politics, there is a widespread sense of anger and malaise. While the election sent a huge message, clearly neither Obama nor Pelosi or Reid listened. That means two more years of childish yelling between the parties, gridlock, more agency regulation to overcome the refusal of the Republicans to pass more restrictive laws, and no progress to repair the damage. None of this is good for real estate values.
While I would never run for office-I could never get elected, so at the suggestion of a highly placed friend, I am now trying to find ways to get in front of some of the leaders of at least the Republican party who may run in 2012. I want to suggest that all of you do whatever you can to try to educate your representatives of either party, at any levels, to stop the childish nonsense and start to deal with the nation’s huge problems. We don’t have two more years to wait to the next election. What all of us do for a living is being directly affected in the negative by what Washington does, or fails to do. The rest of the world is not waiting for Nancy to get out of the way and Obama to demonstrate leadership. They will just run right over this country and not look back. There is a widespread concern by people on all sides that the US is losing its world leader position. That will be bad for US real estate.
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Joel Ross
Joel Ross began his career in Wall St as an investment banker in 1965, handling corporate advisory matters for a variety of clients. During the seventies he was CEO of North American operations for a UK based conglomerate, and sat on the parent company board. In 1981, he began his own firm handling leveraged buyouts, investment banking and real estate financing. In 1984 Ross began providing investment banking services and arranging financing for real estate transactions with his own firm, Ross Properties, Inc. In 1993 Ross and a partner, Lexington Mortgage, created the first Wall St hotel CMBS program in conjunction with Nomura. They went on to develop a similar CMBS program for another major Wall St investment bank and for five leading hotel companies. Lexington, in partnership with Mr. Ross established a hotel mortgage bank table funded by an investment bank, and making all CMBS hotel loans on their behalf. In 1999 he formed Citadel Realty Advisors as a successor to Ross Properties Corp., focusing on real estate investment banking in the US, UK and Paris. He has closed over $3.0 billion of financings for office, hotel, retail, land and multifamily projects. Ross is also a founder of Market Street Investors, a brownfield land development company, and has been involved in the acquisition of notes on defaulted loans and various REO assets in conjunction with several major investors. Ross was an adjunct professor in the graduate program at the NYU Hotel School. He is a member of Urban Land Institute and was a member of the leadership of his ULI council. In 1999, he conceived and co-authored with PricewaterhouseCoopers, the Hotel Mortgage Performance Report, a major study of hotel mortgage default rates.
