If you ask the big money, the only certainty the election results provided was that well, election season was over. With the continuing gridlock on Capitol Hill and fiscal issues to be dealt with, those who control the nation's institutional capital aren't making their investment decisions based on politics.
Rather, they're looking at simple fundamentals—economic, capital market and geographic—to determine where, and when, to place capital. And by the looks of it, competition in the highly sought-after core markets has led these decision makers to find some interesting ways in which to play their hands.
Representatives from seven of the nation's largest institutional investment companies convened at the New York Palace late last year for Transwestern and Real Estate Forum's Eighth Annual Capital Markets Symposium. For nearly two hours the experts spoke candidly about their view of the investment market, the debt and equity opportunities that are out there and what they intend to do with their firms' capital this year.
The discussion was so packed with information this year that Forum's editors decided to release the content as a series of (edited) roundtable discussions, the first of which appears below. Two more will follow—with insight from these institutional insiders on the impact of the fiscal cliff resolution, alternative investments, partial interest equity plays, expected volume for next year and what keeps them up and night—in a special series on GlobeSt.com.
PARTICIPANTS
Richard Coppola is managing director of real estate finance for TIAA-CREF. The New York City-based firm has about $49 billion in real estate assets under management, including $14 billion in debt and $20 billion in equity. Coppola oversees the debt side of the business. The firm did approximately $5.5 billion worth of debt and equity deals in 2012.
Bill Cotter manages the Northeast Division within Wells Fargo Commercial Real Estate's Institutional and Metro Markets Group. The EVP and division manager oversees in excess of $12 billion of commitments within the firm's $120 billion of commercial real estate assets, all of which is on-balance sheet. Wells Fargo lends to public and private real estate investors and developers across all product types. Wells Fargo's Commercial Real Estate group originated in excess of $20 billion last year.
Michael G. Desiato (moderator) is vice president and group publisher for ALM's Real Estate Media Group in New York City.
KBS Realty Advisors' senior vice president, Shannon W. Hill, runs the firm's New York City operation, focusing mostly on acquisition throughout the Northeast and Florida. With $13 billion in real estate assets under management, KBS has historically been a pension fund advisor. It added a core non-traded public REIT platform to its business in 2005 and has a strategic opportunity REIT as well. The firm has the ability to make both stabilized-type loans that would go into one of its core REITs as well as value-add lending within its strategic opportunity funds.
As a director with BlackRock in New York City, John Lamb oversees the transactions side of a real estate equity business with approximately $10 billion of real estate equity investments in the US. The firm acquired about $1.2 billion in assets this year and disposed of some $1.5 billion. BlackRock invests in office, industrial, retail and multifamily, as well as single-family and condo product.
Todd Liker is managing director at Oaktree Capital Management's real estate group in New York City. The team is organized into six areas of focus—commercial (e.g. office, hotel, etc.); corporate; CMBS; commercial NPL pools; residential; and non-US investments.
Steven E. Pumper (moderator) is executive managing director of Transwestern's investment services and asset services groups in Dallas.
Managing director Craig Tagen is head of asset management at Clarion Partners in New York City, were he is responsible for a platform of 1,200 investments across the US, Mexico and Brazil The firm has in excess of $25 billion in gross assets under management, investing for both separate accounts and funds, of which more than 70% is in core and core plus assets. Clarion Partners has been an active player in the transaction market, having made approximately $2 billion of new acquisitions and disposed of $1 billion in assets in 2012.
Wistar Wood is with Boston-based AEW, which has about $46 billion in real estate assets under management globally, of which $24 billion is in the US. As a director in the firm's acquisitions area, he handles core, core-plus and value-add investments. AEW also invests in opportunistic and seniors housing. In 2012, the firm completed about $1.7 billion in acquisitions.
To read about what these experts had to say, go to the January 2013 issue of Real Estate Forum online.
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