Hot Brokers, Cool Market

Each year, our Hot Brokers feature reveals interesting characteristics to which the brokers’ success may be attributed. Some traits are unique and tough to emulate, but other ideas may be applied elsewhere. Still other qualities seem to be quite common among star brokers, if not across the brokerage world at large.This year’s crop of top dealmakers, presented on page 25, is no exception. Reviewing their profiles, I find a great deal of enthusiasm for making deals and getting to know clients. Interest in their clients’ business and respect for the importance of relationships are also oft-quoted values. Other terms that have come up in the past and continue to mark these players include “teamwork,” “integrity” and “attention to detail.”Furthermore, many are longtime players who frequent their own companies’ or markets’ lists of top deals and salespeople. Perhaps what elevates and buoys them is their passion for what they do and with whom they work. This enthusiasm remains high whether they represent Fortune 500 clients or smaller companies and whether law firms, banks or hotel investors. It likewise persists whether the brokers are landlord agents, tenant representatives or investment sales brokers.Even these star players, though, are likely to face greater challenges this year, with fewer deals expected to be completed in the face of so much unpredictability. The volume of investment sales was up last year over the prior year, but that owed mainly to The Blackstone Group L.P.’s purchase of Equity Office Properties Trust and the resultant portfolio spinoffs. One-off deals actually decreased during 2007, said Real Capital Analytics Inc. president Robert White Jr. during the Mortgage Bankers Association’s Commercial Real Estate Finance/Multifamily Housing Convention & Expo 2008, held last month.Additionally, commercial and multi-family mortgage originations for the fourth quarter were down 16 percent from the previous fourth quarter, according to the association. And during the conference, its economists predicted that recovery is still a while away. White noted that sales prices are generally expected to drop by 10 to 15 percent, and that is already proving out in the office sector, according to this issue’s office focus, “When It Rains, It Pours” on page 24.Fortunately, both property fundamentals and delinquency rates remain low, and plenty of room for shifts exists. But how loan performance pans out depends on each loan’s issue year. For instance, those completed from 2005 to 2007 are going delinquent sooner than the historical norm, according to Standard & Poor’s, and delinquencies are now being created faster than loans are being resolved.A significant factor for this year is the large number of loans coming due, according to the credit-rating agency. That is especially difficult for those borrowers that have expensive short-term debt and are seeking to refinance with longer-term debt at lower interest rates, as we discuss in “Refinancing Roadblocks” on page 16. Such situations already created some high-profile difficulty for a few players last year, including Macklowe Properties and Centro Properties Group.As for the leasing market, a lot may still depend on the job market and whether the United States descends into recession. Economists these days seem about 50-50 regarding the likelihood of a recession. You can visit to cast your own vote for whether one will occur.