{"id":1004191967,"date":"2017-09-28T08:52:19","date_gmt":"2017-09-28T16:52:19","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004191967"},"modified":"2022-12-08T20:06:09","modified_gmt":"2022-12-09T04:06:09","slug":"dla-piper-special-report-exploring-non-traditional-real-estate-realms","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/dla-piper-special-report-exploring-non-traditional-real-estate-realms\/","title":{"rendered":"DLA Piper Special Report: Exploring Non-Traditional Real Estate Realms"},"content":{"rendered":"

By Jeffrey Steele<\/em><\/p>\n

\"Left<\/a>

Left to right, Donald Wood, Shobi Khan and Jeff Blau discuss real estate placemaking priorities during the DLA Piper 14th Global Real Estate Summit in Chicago.<\/p><\/div>\n

A late morning forum at the DLA Piper 14th<\/sup> Global Real Estate Summit brought together a handful of seasoned industry leaders to discuss \u201cEvolving with the Times: Non-Traditional Realms for Real Estate<\/em>.\u201d Moderator and Goldman Sachs Managing Director Jeffrey Barkley led panelists through a series of topics designed to meet several objectives, which included exploring the intersection of traditional real estate and the current economy, and examining non-traditional real estate sectors and types.<\/p>\n

The panel comprised Deborah Harmon, Artemis Real Estate Partners co-founder & CEO,\u00a0Randall Rowe, Green Courte Partners chairman, John Kukral, Northwood Investors president & CEO, and Lee Neibart, Ares Management partner & chairman of Global Real Estate Group .\u00a0<\/p>\n

Barkley got things rolling by noting that amid industry optimism, clouds are massing on the horizon. They include concerns over capital, pricing and risk, all interrelated.<\/p>\n

Tempted to sell<\/strong><\/h2>\n

\u201cI\u2019m sleeping pretty well at night,\u201d <\/em>Neibart responded. \u201cThe opportunities aren\u2019t as plentiful as they were. You have to look at 20 deals to do one. But we have found deals. We see this as a \u2018Steady Eddie\u2019 environment for the foreseeable future.\u00a0 If you\u2019re not overly optimistic, and you have discipline on the opportunities you look at, you\u2019ll do very well. You have to be convinced at the beginning you\u2019ll make a profit for your investors<\/em>.\u201d<\/p>\n

Noted Kukral, \u201cAt some point, you\u2019ll see a downturn, where capital will be withdrawn from real estate. There\u2019s plenty of money now to buy things. The question is where will you be next year?\u00a0 Our fund is structured so we have 15 years to own something before we look at selling. But today, it\u2019s hard to not be tempted to sell at these prices<\/em>.\u201d<\/p>\n

Rowe interjected his conviction that some of the pricing, from a seller\u2019s perspective, has been very attractive. \u201cWe look for opportunities where we will have a competitive advantage,\u201d <\/em>he added. \u201cThere have been times when almost anything you bought, you did well. We have to think years out, and inherently are being more cautious<\/em>.\u201d<\/p>\n

Noted Harmon: \u201cWe\u2019re the new kid on the block and we started in the depths of the downturn. If you\u2019re a first-time fund these days, it\u2019s pretty terrible. <\/em><\/p>\n

\u201cThere is significant pressure from institutional investors on fees. There\u2019s a general sense that our industry makes too much for whatever the return is.\u201d<\/em><\/p>\n

Transformational technology<\/strong><\/h2>\n

Asked by Barkley whether they\u2019d been investing in traditional asset types, Kukral observed the primary investment strategy is to buy the most core investment available.<\/p>\n

\u201cIf you can do that, why do anything else?\u201d he asked. \u201cBut today, technology has the capacity to transform the way real estate is used. So we\u2019re saying what we buy today has to be relevant 5 to 10 years out. We believe people will want to move out to the suburbs, where there is good education for kids and good jobs . . .\u00a0 We want to own everything. If you own all, you make it more of an integrated community. When you get the apartment and retail guys working together, the result can be very good<\/em>.\u201d<\/p>\n

Neibart said he\u2019s intrigued by investment management\u2019s evolution. \u201cWe didn\u2019t believe in malls; we weren\u2019t strong investors in industrial,\u201d <\/em>he recalled. \u201cWe\u2019re building a hotel in Denver and we\u2019ve only been at it six years. That\u2019s a joke. But at the end of the day\u2014the hotel opens a year from December\u2014it\u2019ll be a spectacular investment<\/em>. We have to go where other people aren\u2019t, be five to seven years ahead of the crowd.<\/em><\/p>\n

\u201cIn L.A., there are malls with a Sears, JCPenney and a closed Macy\u2019s. It\u2019s inevitable that land with tens of thousands in population around it will be repurposed and be a spectacular investment<\/em>.\u201d<\/p>\n

Asked why health care works for her, Harmon said it\u2019s evolving into a core asset. \u201cIt\u2019s like hotels were 20 years ago,\u201d <\/em>she asserted. \u201cThe over-65 cohort will be 80 million [people]. It\u2019s depressing, but statistics say one in four in this room will have dementia, and there may be no cure in our lifetime . . . We\u2019re trying to think 10 to 15 years ahead of what will be a multi-decade opportunity. Our operating partners are not exclusive. We tell them, \u2018We\u2019d like to be on the holiday card list, not necessarily a wedding invite list<\/em>.\u2019\u201d\u00a0\u00a0<\/p>\n

Noting it\u2019d be his last question, Barkley asked how panelists attract and retain talent. \u201cIt\u2019s not hard to attract talent, it\u2019s what you do with that talent,\u201d <\/em>Neibart said. \u201cWhere we\u2019ve fallen down is pigeonholing young talent to do only certain things. We\u2019ve tried in our firm to get them out doing many things. People who fail have narrow specialties<\/em>.\u201d<\/p>\n

Added Kukral: \u201cIt\u2019s tougher today to get talent because the idea of making money is less important to younger people today<\/em>.\u201d<\/p>\n

Recalling a friend had once told her, \u201cYour industry is pale, male and stale,\u201d Harmon said her firm is trying to make a difference in the way the industry hires. \u201cWe\u2019re trying to get and retain the best talent out there<\/em>,\u201d she said.<\/p>\n

Keep up with\u00a0our 2017\u00a0DLA Piper Conference<\/a>\u00a0coverage.<\/p>\n","protected":false},"excerpt":{"rendered":"

Amid industry optimism, clouds are massing on the horizon. They include concerns over capital, pricing and risk, all interrelated.<\/p>\n","protected":false},"author":450,"featured_media":1004191975,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21783,23891,21742],"tags":[33026,33435],"class_list":["post-1004191967","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investment","category-national","category-latest","tag-dla-piper","tag-goldman-sachs"],"acf":[],"yoast_head":"\nDLA Piper Special Report: Exploring Non-Traditional Real Estate Realms - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/dla-piper-special-report-exploring-non-traditional-real-estate-realms\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"DLA Piper Special Report: Exploring Non-Traditional Real Estate Realms\" \/>\n<meta property=\"og:description\" content=\"Amid industry optimism, clouds are massing on the horizon. 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