North American Investor Optimism Leads the Way at MIPIM 2012 Despite Uncertainties
March 7, 2012
By J.C. Goldenstein, CEO, CREOpoint
Senior industry leaders gathered at the exclusive pre-MIPIM 2012 event hosted by CREOpoint CEO J.C. Goldenstein to share both their expectations for the week and their sentiments on the global real estate environment.
The mood among participants was mostly positive. After sitting on the sidelines for several years, yield-starved investors are eager to find new opportunities. Demitrios Louziotis, senior vice president of global real estate solutions at ARGUS Software, sees many signs that the replacement cycle may be starting again — especially in Asia, where risk tolerance is returning. Reggie Winssinger, a member of W.P. Carey’s board of trustees, emphasized the attractiveness of the low-interest-rate environment, at least for investors whose deals are sound enough to qualify for loans.
Howard Roth, global real estate leader for Ernst & Young L.P., was “cautious but positive, even in Europe, thanks to the recent stimulus,” he said. “There’s plenty of equity looking for a home this year.” Gunnar Branson, the new CEO of NAREIM, was in a good mood and said his firm’s last quarterly confidence index was back up. Chris Lawrence, executive vice president of investment management at Bentall Kennedy, noted that there are interesting opportunities due to technology and demographics in sectors such as the growing medical-office market.
However, even the most optimistic of CREOpoint’s other attendees expressed some caution, as obvious market risks remain. Distressed assets are still weighing on lenders’ balance sheets and the unwinding of these assets could fuel more financial turbulence for banks and the market in general. Peter Grant, deputy real estate editor of The Wall Street Journal, said that office leasing and investment sales markets in the U.S. haven’t rebounded after showing signs of cooling in the second half of last year. While emerging markets were repeatedly mentioned as investment niches, the lack of a predictable exit strategy continues to keep many investors away.
Louziotis may have best summarized the mood. “This time last year, the champagne glass was half full,” he said. “When we got to the fourth quarter, we realized the bottle was empty. Now the question is where is the next bottle coming from — and who’s bringing it.”
Commercial Property Executive will be offering J.C. Goldenstein’s MIPIM coverage throughout the week, via the “CPE Daily News Update” and available at http://www.cpexecutive.com/category/regions/international/. For real-time intelligence and networking in 13 languages, visit http://bit.ly/MIPIM2012 and get the free CREOpoint mobile app, compliments of ARGUS Software.
CREOpoint operates the top global commercial real estate business and social network. The firm offers complementary sponsorships through its CREOnewsletters, risk-management and business-intelligence subscriptions and custom dashboards, as well as new-media consulting through CREObuzz.