I represent Asian investors for US real estate. My people in Asia report that the real investors, not the pure flight money people, now believe that US real estate has become over priced and is set to decline over the next two years. They are becoming net sellers as they want to cash out and have cash in the bank to take advantage of what they believe is the coming downturn. While there is still a flood of flight capital, the commentary above refers to the real investors who invest and not just park money away from the home country. What we do find in Asia is investors interested in our brown field development program due to its longer term play and because we can usually buy assets or land at a discount due to the environmental challenges.
This view is consistent with a growing chorus of US based investors who now believe 2015 may have been the peak and it is downhill from here. Nobody predicts any sort of crash at all, but just an end to party and time to take cash off the table before it begins to decline. If you acquired assets over the past five years, get out now, and smile at the nice gains you have made. Then just be patient.
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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.
