It appears that the Egyptian military fully understands the situation and intends to have a well controlled transition which will allow the generals to maintain control even if behind the scenes. A lot like the situation in Turkey until a few years ago. If this can be done then it is likely the region will undergo a far more controlled and smoother transition to a more open and still western friendly set of regimes. World peace rides on this next stage of the unfolding crisis but it is essential to all of us that it goes in a way the keeps the radical Islamists out of the government. The generals may let the Muslim Brotherhood have some sort of apparent role, but no real power. The generals are not fools and they understand better than Obama that the Muslim Brotherhood is still intent on a radical Muslim government, and that does not work for the generals now in power. It surely does not work for world peace.

If all goes as it now is going and some sort of western leaning regime takes over, and the peace treaty with Israel stays in place, then a lot of good things will potentially happen. The rest of the mid east stays under control and oil prices stay manageable. Stock markets will rally, people will relax and investors will go forward. The money fleeing the mid east will still come here to be safe and that is all good for US real estate, especially in major east coast cities like New York and Washington. If oil stays stable and equity markets do continue to rally, then investors and the public will feel a lot better and real estate values will continue to rise.

The US seems to be entering a period of slow but upward growth, and deals are ramping up again quite rapidly. I have seen more new deals across my desk in the past three weeks than anytime since 2007. They even include major development deals. It is a total reversal of just six weeks ago. There are groups asking for my help to raise capital for new finance companies, ground up hotels, equity asset funds, and a variety of other projects and refinancing. A major workout of a large and complex portfolio I am doing is going as well as can be expected in that the banks involved are being positive and cooperative in their approach, and not looking to foreclose or take draconian steps. They are looking for good solutions and are willing to work with us. The attitude shift is very clear and positive. It is not that they are giving anything away, they are not. However they are taking positions that are realistic and not unreasonable and their approach is now let’s together get to a good fix. It is clear the shift is to build back their book, and not to crush good clients of the bank. That is hugely positive for the economy and values, but it means that there will be a lot less distressed product to go to market than we all expected. In that portfolio are assets that would have been surely foreclosed and sent to market a few months ago, but they will now get extended for several years and allowed to hyper amortize and to get worked out. I believe this is going to be the norm going forward where there is a very good sponsor.

A lot can still go bad, but as of this writing on Sunday, it seems to be headed in a good direction. That may all change even by the time this is published, but I remain optimistic now that a huge historic inflection point is happening and it will go in a way that is good for America and the world, and that the radicals will find they did not prevail. The historic changes in the mid east taking place right now will change how the world lives or dies for the next 50 years, so pay close attention. It will deeply impact your investments and your life.

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
NOT FOR REPRINT

© 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.

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.