In the midst of a gloomy economic climate, some top executives offered a cautiously optimistic view of the industry\u2019s prospects Thursday at New York University\u2019s annual REIT conference in Manhattan. \u201cI think the housing crisis, and the sub-prime catastrophe, was the best thing that ever could have happened to the commercial real estate industry,\u201d said Martin Cohen, co-chairman and co-CEO of Cohen & Steers Inc., during the morning keynote address. Cohen explained that the credit squeeze put a stop to the unsound financial structures that threatened disaster for commercial real estate finance. In the absence of high leverage that fueled the industry for several years, the low-return environment will persist for the time being, Cohen said. \u00a0Cohen said he does not expect asset prices to drop markedly, in large part because there is generally no glut of product. A number of REIT-focused hedge funds have closed down recently, but Cohen suggested that hedge funds will be a significant investment vehicle when the market comes back because of their ability to go long and short and deliver high returns in a volatile market. \u00a0REITs\u2019 relatively low cost of capital and access to equity will make them powerful players when the market returns. However, he doubted that stock buybacks are an effective strategy to jump-start REIT share prices. \u201cIn a cash-starved environment, your cash is worth more on your balance sheet,\u201d he explained. \u00a0Following Cohen\u2019s address, a panel moderated by Goldman, Sachs & Co. managing director Andrew Jonas addressed trends that will shape finance and investment for the rest of the year. \u201cI think it\u2019s important to note that there\u2019s debt available–it\u2019s just available on pretty tough terms,\u201d said Rob Speyer, president of Tishman Speyer Properties. Despite persistent rumors about stock merger deals in the hotel industry, the debt squeeze makes it unlikely, said W. Edward Walter, president & CEO of Host Hotels & Resorts Inc. \u201cI\u2019d be surprised if anything happens in the near term,\u201d he said. \u00a0Hamid Moghadam, chairman & CEO of AMB Property Corp. lauded the Federal Reserve\u2019s work to stabilize the financial system in the wake of heavy investment bank losses and the failure of Bear, Stearns & Co. \u201cI think the talk of some sensible regulation is good,\u201d he added, but expressed concern that regulation will get politicized. Asked by Jonas why the commercial real estate industry seems to be unworried about the possibility of a recession, Moghadam responded that everyone–including him–is indeed worried. But he added, \u201cI don\u2019t think the wheels are going to come off.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
In the midst of a gloomy economic climate, some top executives offered a cautiously optimistic view of the industry\u2019s prospects Thursday at New York University\u2019s annual REIT conference in Manhattan. \u201cI think the housing crisis, and the sub-prime catastrophe, was the best thing that ever could have happened to the commercial real estate industry,\u201d said…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1003785751","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n