Michael Kirby, chairman and director of research, Green Street Advisors, elaborated, “Some of the guys who should sell just won't. Running a public company is a prestigious job, and it's hard to kick someone out,” he said.

Asserted David Nethercut, president, CEO and member of the board of trustees, Equity Residential, “So many things need to align in a transaction. Pricing, relative pricing, social issues, strategic issues, access to capital, etc., so I'm not sure any one thing is going to drive activity.”

Noted Ronald Havner Jr., chairman, president and CEO, Public Storage Inc., “When you have to pay a premium, severance and immigration costs, it's difficult to create value. Certainly there's an arbitrage between public and private companies but we need a separation of multiples and, given the state of the economy, I don't see that happening this year.”

On the brighter side, many speakers had praise for the state of affairs in the capital markets. “Companies today have many options for getting liquidity,” said Jackson Hseih, vice chairman, joint global head of real estate group, UBS Investment Bank. “That bodes well for this sector right now.” Also, he added, “Today, debt is an asset. Using it—whether fixed or floating—is going to pay off.”

Added Joseph Harvey, president and CIO, Cohen & Steers, “Smaller companies now have access to capital, which is amazing. They can make acquisitions, investments, and do it well. I think by virtue of valuation, the small caps have caught up.” And Donald Wood, president and CEO, Federal Realty Investment Trust noted, “The 10-year [Treasury rate] is ridiculously low. It's pretty compelling.”

Several talked of looking beyond primary markets. “The idea coming out of the crisis was that the coasts were the only safe place,” said Jonathan Gray, global head of real estate, Blackstone. “But there's value in secondary markets. I believe smaller companies in middle-America have been undervalued.”

“Secondary markets aren't caught up to primary markets but the junk rally is an indicator that it will,” added Richard Mack, CEO, Area Property Partners. When asked about globalization, keynote speaker Hamid Moghadam, chairman and CEO, Prologis Inc., said “It doesn't add anything to your quality of life. We're done going into new markets for the foreseeable future.”

Added Havner, “It's a disproportionate amount of work for the return. Milton Cooper, executive chairman, Kimco Realty Corp., explained, “There's no better place to own property than in the U.S. because there's no better legal system for real estate and the country has the greatest population growth. Growth rates may be stronger but there's not a system of laws. Talk to some retailers who thought they had a lease in China, and then the province said they didn't.”

Others had praise for global markets though. “Austrialia is interesting,” said Harvey. “There are some discounts there and cap rates are too high at 8%." Gray mentioned, “We just bought the largest hotel in Dublin and paid 80% less than the last owner, who bought in 2007. There's still very good value in Europe's private markets. The lack of capital there is creating interesting opportunities.”

Zell said he is eyeing several countries. “Brazil, where we've been for six years, is self-sufficient in water, food, and population growth so it has scale. I'm very bullish on Mexico,” he continued. “I think it will benefit enormously for the next 10 years.”

There was a heated discussion of companies that may be working to disguise themselves as REITs. William Ackman, CEO, Pershing Square Capital Management, L.P noted, “It's hard to make the argument that a casino being converted into a REIT isn't in keeping with the original purpose. If I worked for the Internal Revenue Service, I'd look very closely at the intent of origin.

Added Gray: “If we're taking gaming income and cleansing it through the REIT structure that's concerning. Sticking to more traditional real estate makes more sense.” Ackman said, “There will be some interesting companies that come out of all this activity, if you think of the arbitrage that's been set up. Investors need income and stability.

“Healthcare REITs have been doing this for three years,” he continued, “with assisted living facilities and separating real estate from other assets. I think that makes much more sense than having a sex change operation to convert to REITs.”

As for quantitative easement, a new concern for the industry that was raised throughout the day, Zell said, “I'm getting under my bed, I suggest you do the same.”