Robert Knakal - State of the Distressed Nation

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Opening Address: State of the Distressed Union: Where We are and Where We are Headed

* Robert Knakal, Chairman, Massey Knakal Realty Services

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Robert Knakal - State of the Distressed Nation

  1. 1. ROBERT A. KNAKAL Chairman & Founding Partner Massey Knakal Realty Services BACKGROUND: <ul><li>Wharton School of Business - 1984 </li></ul><ul><li>Began Career 1984 – CB Richard Ellis </li></ul><ul><li>Massey Knakal Established 1988 </li></ul>BROKERAGE: <ul><li>Over 1,125 Properties Sold </li></ul><ul><li>$7.0 Billion Aggregate Market Value </li></ul><ul><li>Two-Time Winner – Most Ingenious Deal of the Year </li></ul><ul><li>REBNY Lifetime Achievement Award </li></ul>
  2. 2. INVESTMENT SALES MARKET OVERVIEW ROBERT A. KNAKAL
  3. 3. 2. COMMERCIAL REAL ESTATE METRICS TABLE OF CONTENTS <ul><li>Volume </li></ul><ul><li>Value </li></ul><ul><li>Distressed Assets </li></ul>1. NEW YORK CITY OVERVIEW <ul><li>Banks </li></ul><ul><li>Government </li></ul>4. MACRO CONSIDERATIONS <ul><li>Economic </li></ul><ul><li>Political </li></ul>4. OPTIMISM VS. PESSIMISM <ul><li>Special Services </li></ul>
  4. 4. NEW YORK CITY COMMERCIAL PROPERTY SALES Top Brokerage Firms 2001-2009 Based on # of Transactions (All Sales)
  5. 5. CITYWIDE DOLLAR VOLUME (AGGREGATE SALES PRICE) 2005 –2010, ALL SALES (IN BILLIONS) Source: Massey Knakal Realty Services
  6. 6. NYC TOTAL SALE DOLLAR VOLUME 2010 Source: Massey Knakal Realty Services
  7. 7. NYC TOTAL BUILDINGS SOLD Source: Massey Knakal Realty Services
  8. 8. % OF TOTAL STOCK SOLD Source: Massey Knakal Realty Services
  9. 9. AVG. PRICE PER PROPERTY SOLD (IN MILLIONS) Source: Massey Knakal Realty Services
  10. 10. AVERAGE PPSF MANHATTAN – FROM PEAK TO 2009 -32%
  11. 11. AVERAGE PPSF MANHATTAN – FROM PEAK TO 2010 -38%
  12. 12. A. VOLUME CURRENT ISSUES FOR THE INVESTMENT SALES MARKET <ul><li>Dollar Volume </li></ul><ul><li>Number of Sales </li></ul><ul><li>Externalities </li></ul><ul><li>Distressed Asset Flow </li></ul>
  13. 13. B. VALUE CURRENT ISSUES FOR THE INVESTMENT SALES MARKET <ul><li>Fundamentals </li></ul><ul><li>Supply / Demand </li></ul><ul><li>Interest Rates </li></ul><ul><li>Financing </li></ul><ul><li>Alternate Investments </li></ul>
  14. 14. C. DISTRESSED ASSETS CURRENT ISSUES FOR THE INVESTMENT SALES MARKET 1. Banks 2. Special Servicers 3. Government
  15. 15. 1. Banks CURRENT ISSUES FOR THE INVESTMENT SALES MARKET <ul><li>Work It Out </li></ul><ul><li>Short Sale </li></ul><ul><li>Note Sales </li></ul><ul><li>REO </li></ul>
  16. 16. 2. SPECIAL SERVICERS CURRENT ISSUES FOR THE INVESTMENT SALES MARKET <ul><li>Overwhelmed </li></ul><ul><li>Transaction Flow Increasing </li></ul><ul><li>Sold or Recapitalized </li></ul><ul><li>“ Insiders” Able to Compete </li></ul>
  17. 17. 3. GOVERNMENT CURRENT ISSUES FOR THE INVESTMENT SALES MARKET <ul><li>TARP </li></ul><ul><li>TALF </li></ul><ul><li>FDIC </li></ul><ul><li>The Fed </li></ul>
  18. 18. As we progress into 2011, there are many reasons for: <ul><li>Optimism </li></ul><ul><li>Pessimism </li></ul>Half Full or Half Empty?
  19. 19. 10 THINGS TO KEEP AN EYE ON: 1. Unemployment 3. Banking 4. Global Implications 5. Supply vs. Demand 2011 and BEYOND 2. Corporate Profits 6. Housing Market 7. Inflation 8. Fed Monetary Policy 9. Deleveraging 10. Deficits, Debt, Pensions
  20. 20. ROBERT A. KNAKAL Chairman & Founding Partner Massey Knakal Realty Services [email_address] Massey Knakal Realty Services 275 Madison Avenue New York, NY 10016

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