Opportunities Panelv2

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  • Debt defaults by companies with assets exceeding $100 million
  • Opportunities Panelv2

    1. 1. Harvard University Graduate School of Design<br />Distressed Real Estate: Examining Debt and Equity Structures<br />to Mitigate Losses and Identify Opportunities <br />July 22-23, 2009 <br />By: Scott L. Podvin, Managing Director<br />The Crest at Waterford Lakes, LLC<br />spodvin@post.harvard.edu<br />www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    2. 2. OPPORTUNITIES PANEL<br />Among the questions to be discussed: <br />Opportunities currently available; <br />Opportunities that will be available;<br />How to source, underwrite and execute. <br />Where is capital coming from?<br />Panelists:Scott L. Podvin, Managing Director, The Crest At Waterford Lakes, LLCGentry Hoit, Atlantic Assets Group<br />Cia Buckley, Dune Capital<br />Jonathan G. Davis, The Davis Companies<br />
    3. 3. Markets With Best Investment Potential<br />• What is your investment horizon? (5 years, 8 years?)<br />• Are you IRR-driven?<br />• These are the characteristics to look for in a target market:<br />Strong long-term high-wage job potential<br />Deep discounts <br />Finished, vacant to decline<br />Long-term land/VDL constraints<br />In-migration (demand) potential <br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    4. 4. Finding the Best Markets for Your Investment Criteria<br />Where are you on the risk-return spectrum? <br />Want high return? <br />You’ll need to look in the “bubble markets”!<br />Miami, AZ, Las Vegas, California<br />If you are content with a more modest return, and seek to avoid a falling knife, you can consider some non-bubble markets<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    5. 5. Criteria for Picking Potentially High-Return Markets<br />Strong long-term high-wage job potential<br />Deep discounts <br />Long-term land constraints<br />In-migration (demand) potential <br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    6. 6. Transaction SummaryFrom January through April<br />Based on independent reports of properties and portfolios $5 million and greater. Data believed to be accurate but not guaranteed. <br />©2008 Real Capital Analytics, Inc. All rights reserved.<br />
    7. 7. Most Active Markets<br />deals reported closed in past 12 months valued at $20 mil. or greater<br />©2008 Real Capital Analytics, Inc. All rights reserved.<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    8. 8. Where’s the Demand<br />Y-t-D vol. by property type $ Bil % Change Q2 % Change<br />Office $28.37 -71% -75%<br />Industrial 5.95 -77% -83%<br />Retail 13.97 -66% -77%<br />Apartment 6.45 -80% -75%<br />Hotel 3.71 -81% -77%<br />Dev Site 18.54 -69% -62%<br />Grand Total $76.99 -72% -73%<br />©2008 Real Capital Analytics, Inc. All rights reserved.<br /> <br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    9. 9. WHO’S BUYING<br />deals reported closed in past 12 months valued at $20 mil. or greater<br />©2008 Real Capital Analytics, Inc. All rights reserved.<br />
    10. 10. WHO IS SELLING<br />SWFs<br />HEDGE & OPPORTUNITY FUNDS<br />REITS<br />PRIVATE EQUITY FIRMS<br />PENSION FUNDS<br />ENDOWMENTS<br />SPECIAL SERVICERS/MASTER SERVICERS<br />REAL ESTATE COMPANIES<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    11. 11. United States Troubled Assets<br />Assets#PropsVol (mil)<br />Troubled 4,444 $85,649.7 <br />Restruct&apos;d/Modified 711 $16,217.7 Lender REO 719 $10,332.3 <br />Current Distress 5,874 $112,199.7 <br />Resolved 542 $9,517.5 <br />Total6,416$121,717.1<br />©2008 Real Capital Analytics, Inc. All rights reserved.<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    12. 12. HEDGE FUND LIQUIDATIONS<br />Industry Managed approx. $2.5T<br />No. of hedge funds managing more than $1Bn fell by more than 40%<br />1,471 funds, or roughly 15% of the hedge fund industry, were liquidated<br />More than 775 funds closed in the final quarter of 2008<br />Per Trac Financial Solutions<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    13. 13. THE GREAT LIQUIDATION<br />$200Bn to be withdrawn in 2009<br />$155Bn was taken out in 2008<br />This cycle will likely see more liquidations than in the last three combined, said Steven Smith, global head of leveraged finance at UBS in NY.<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    14. 14. WHO IS LIQUIDATING <br />Drake Management, <br />Centaurus Capital, <br />London Diversified Fund Management <br />Basso Capital, <br />Ferox Capital Management<br />Norwich Union’s £2.8Bn unit-linked vehicle forced to close<br />The Man Group, the world’s largest publicly traded hedge fund manager, said net outflows by institutions were about $4.2Bn<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    15. 15. HARD TIMES HIT HEDGES<br />Fortress Investment Group places restrictions on redemptions. <br />Blackstone<br />Och-Ziff Capital Management<br />Cerberus and <br />Citadel are facing tougher times, as well.<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    16. 16. PRIVATE EQUITY UNLOADS<br />RBS Hires UBS To Sell £500mm Of Investments In Private Equity Funds<br />$134bn Of Private Equity Assets On The Balance Sheet 5 Of 6 Big Money Banks And AIG<br />AIGselling Tokyo landmark near Imperial Palace. <br />GE JOINS THE LIST OF SELLERS<br />Japanese companies start selling properties to meet financing needs, says EijiSakaguchi, head of real estate banking at Morgan Stanley in Japan<br />Source: super return conference Berlin, Germany<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    17. 17. Private Equity Fund Diagram<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    18. 18. MATURING & ROBUST 2DRY MARKETFOR SELLERS OF PRIVATE EQUITY ASSETS<br />Types of Secondary Transactions <br />2.1 <br />Sale of Limited Partnership Interests <br />2.2 <br />Sale of Direct <br />Interests<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    19. 19. REITS UNLOAD <br />REITS among 1st to sell properties <br />Dow Jones Equity ALL REIT Total Return Index, which tracks 113 stocks, posted a negative total return of 32% in first quarter of 2009.<br />Hotel Reits – down 38%<br />Retail REITs down 39%<br />Health Care REITS down 28%<br />Self Storage REITs down 32%<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    20. 20.
    21. 21. Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    22. 22.
    23. 23. SMALLER BANKS WILL GET HIT HARDER<br />Unlike the housing meltdown, this crisis is likely to hit smaller banks the hardest. <br />The four largest U.S. banks have an average exposure of 2 per cent to commercial real estate. <br />The 30 to 100 largest banks have an average 12-per-cent exposure. <br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    24. 24. HUMPTY DUMPTY CAN’T PUT THE ZOMBIE BANKS BACK TOGETHER AGAIN<br />The banking industry, which has a $1.8-trillion exposure to commercial real estate, could face losses of nearly $200-billion, according to Deutsche Bank real estate analyst Richard Parkus. <br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    25. 25. FORECAST FOR DEFAULTS AND BANKRUPTCIES <br />Debt defaults increase at double-digit rate next 24 months<br />160 to 190 defaults in 2009<br /> B/n 120 and 140 in 2010<br />Typically, 2 out of 3 to 3 out of 4 defaults end in bankruptcies within 3 months. <br />Thus, we are looking at:<br />150 bankruptcies in 2009 and <br />100 in 2010. according to a bi-annual study in November 2008 by Bain Corporate Renewal Group. <br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    26. 26. PROPERTY TYPES<br />deals reported closed in past 12 months valued at $20 mil. or greater<br />©2008 Real Capital Analytics, Inc. All rights reserved.<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    27. 27. ASSET BUBBLE W/ CRATERING VALUES<br />U.S. home owners lost a cumulative $3.3T in home values in 2008, according to Zillow. <br />Since 2006, more than $6.1T in &quot;value&quot; has evaporated.<br />Recipe for real estate bubble: slice of mbs into a bowl of cdos and (add) another layer of cdos on top<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    28. 28.
    29. 29. Foreclosure Tsunami<br />
    30. 30. NEXT SHOE TO DROP<br />There were 5,315 U.S. commercial properties in default, foreclosure or bankruptcy at the end of June, more than twice the number at the end of 2008, with hotels and retail among the most “problematic,” Real Capital Analytics Inc. said in a report.<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    31. 31. Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    32. 32. COMMERCIAL REAL ESTATECRISIS JUST BEGINNING<br />A wave of loans made during the boom years of the past decade are now coming due, including roughly $400-billion worth this year and more than $1.8-trillion by 2012, according to the Washington-based Real Estate Roundtable. <br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    33. 33. NEW YORK EPICENTER OFCOMMERCIAL RE CRISIS<br />The epicenter of the commercial real estate crisis is New York, where nearly $8-billion worth of commercial properties – mainly office towers – are in various stages of financial distress. <br />Many office towers with significant vacancies, in Manhattan and elsewhere, are being unloaded at “fire sale” discounts of up to 70%. <br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    34. 34. Office/Shopping Centers<br />Prices for office towers and shopping centers are already down 35 to 45% from their peak in 2007, and further declines are likely, Mr. Parkus from Deutsche Bank said. <br />That compares with a 32% peak-to-trough decline for house prices, according to the Case-Shiller home price index. <br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    35. 35. HOTELS<br />After a dismal 2008, it seemed that hotel sales volume could not fall any further. <br />Q1&apos;09 transactions dropped to $644M, an 85% YOY decline and 98% off the 2007 market peak. <br />Sales of limited service properties fell 77% from Q1’08 levels while full service properties have endured an 88% decline in sales volume. <br />©2008 Real Capital Analytics, Inc. All rights reserved.<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    36. 36. HOTELS<br />Per-unit pricing declined with the drop-off in volume as full and limited service hotels were down 1% and 4% YOY, respectively. <br />Pricing for the top 25% of assets also fell to $169k/key at a 7.5% cap rate further underlining the particular strain on the typically higher-priced full service market.<br />©2008 Real Capital Analytics, Inc. All rights reserved.<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    37. 37. HOTELS<br />Smaller deal size means smaller private players are dominating limited service hotel transaction activity and made up 69% of buyers for the past four quarters. <br />Private investors also comprised 80% of sellers of limited service properties for the same period. <br />Those investors most vulnerable to the freeze in capital markets, including REITs and other public companies, continue to be net sellers at a staggering 12:1 ratio. <br />©2008 Real Capital Analytics, Inc. All rights reserved.<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    38. 38. HOTELS<br />Institutional and foreign players with a particular taste for full service assets have been net buyers by a ratio of over 3:2. <br />As more hotel assets become distressed, these trends seem poised to continue; the big buyers of the boom will sell assets to meet obligations while institutions with strong balance sheets or smaller private players can take advantage of bargains.<br />©2008 Real Capital Analytics, Inc. All rights reserved.<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    39. 39. CONCLUSIONS<br />No CMBS in 2009 YTD, and practically no debt available.<br />What to CAP?  Trailing-12 makes no sense as NOI keeps falling.  <br />Whose forecast do you use for your proforma? <br />Cap rates are rising but no one knows where they will stabilize.<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    40. 40. CONCLUSIONS CONT.-<br />Buyers expect many foreclosures and bank REOs, and don’t want to overpay, so for the time being remain on sidelines<br />Key markets need new price benchmarks to reset expectations.  Only then will buyers know their way.<br />Buyers are assuming that when they do proceed, they need to be prepared to buy with all-equity.  <br />Hence further upward pressure on Cap rates <br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    41. 41. FINAL THOUGHTS<br />Seller financing will be prevalent in transactions for the foreseeable future<br />When debt starts coming available (who knows when?), it will be more costly<br />Many groups have identified new equity sources, but not many transactions have closed so you must doubt whether they funded yet. <br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    42. 42. SALES VOLUME FALLS OFF A CLIFF<br />Sales volume has fallen with uncanny consistency by 71% over the past twelve months as investor appetites have subsided in equal measure across the property spectrum.<br />©2008 Real Capital Analytics, Inc. All rights reserved.<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    43. 43. Downward Pressure on New Home Prices<br />1) Lack of mortgage financing, <br />2) Job losses and lower incomes, <br />3) Smaller houses with lower specifications, <br />4) Need for many home buyers to sell another house before they buy, and <br />5) Massive REO competition as the option- ARM recast wave hits next year. <br />Plus, as Treasury rates rise, there will be further downward pressure.<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />Harvard University’s Graduate School of Design: Distressed Real Estate: Examining Debt and Equity Structures to Mitigate Losses and Identify Opportunities, July 22-23, 2009 <br />spodvin@post.harvard.edu; www.TheCrestLife.com<br />http://www.linkedin.com/in/sp0dvin<br />Tel: (305) 793-5762; Fax: (305) 665-3971<br />
    44. 44. ABOUT US<br />PDG is an independently managed private equity real estate investment advisory company focused on real estate investment in the U.S., Europe and Asia. <br />Our managed investments include development and redevelopment projects, joint-ventures and real estate operating companies in the office, retail, industrial, residential and hotel sectors.  <br />We combine local knowledge of our real estate professionals with broad global perspectives to develop our strategies and identify investment opportunities. <br />Our team of real estate professionals come from diverse backgrounds, with the full range of skills required to invest in and manage real estate and advise real estate funds. Our specialists apply their skills to ensure that we drive every one of our investments to perform at its optimum. <br />PDG is independent of any broader financial services group. We can invest funds on behalf of a number of different organizations, including pension funds, insurance companies, government entities and financial institutions, as well as charities and endowments.<br />
    45. 45. Take Care of Your Family<br />Scott L. Podvin, Managing Director of The Crest at Waterford Lakes, LLC<br />www.TheCrestLife.com<br />spodvin@post.harvard.edu<br />Cell: (305) 793-5762<br />Fax: (305) 665-3971<br />

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