{"id":1004709964,"date":"2024-04-11T03:50:33","date_gmt":"2024-04-11T11:50:33","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004709964"},"modified":"2024-04-15T04:24:13","modified_gmt":"2024-04-15T12:24:13","slug":"uli-equity-panel-its-pencils-up-for-the-right-deal","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/uli-equity-panel-its-pencils-up-for-the-right-deal\/","title":{"rendered":"ULI Special Report: It\u2019s ‘Pencils Up’ for the Right Property Types"},"content":{"rendered":"\n

<\/p>\n\n\n

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Chris Aiken, head of acquisitions for MetLife Investment Management’s Real Estate Group, and Robert Jue, CEO of Standard Real Estate Investments.<\/figcaption><\/figure><\/div>\n\n\n

There is a growing sense that commercial real estate has turned the corner and transaction activity will soon normalize. That\u2019s welcome news for equity investors who are eager to buy new assets and sell others.  <\/p>\n\n\n\n

\u201cWe are definitely closer to the bottom than we are from the top,\u201d Robert Jue, CEO of Standard Real Estate Investments, said yesterday during the “Capital Markets: Raising Equity” panel at the ULI Spring conference<\/a>. \u201cLet\u2019s get things done in 2024 rather than in 2025.\u201d<\/p>\n\n\n\n

The bid-ask spread is narrowing, noted Chris Aiken, head of acquisitions for MetLife Investment Management’s Real Estate Group. \u201cSellers are capitulating to where values are,\u201d he observed. \u201c(Some) may look to offload exposures to try to live another day.\u201d<\/p>\n\n\n\n

For buyers, yields will be thinner, Aiken added. But, if you have a long-term view, there is opportunity. Meanwhile, after a long bull run, he noted, \u201cvalue creation is going to have to come from operations.”<\/p>\n\n\n\n

The industry and the U.S. economy<\/a> may not be out of the woods just yet, however, so the enthusiasm for transactions is tempered for some.<\/p>\n\n\n\n

\n\n\n\n

READ ALSO:<\/strong> CRE Prepares for Interest Rate Cuts<\/a><\/p>\n\n\n\n

\n\n\n\n

\u201cThere are more potential risks and not necessarily known risks,\u201d said Dwight Stephenson, principal of Blue Vista Capital Management LLC.<\/p>\n\n\n\n

Known risks include real estate losses for banks, geopolitical risk and election risk, with transaction activity to be significantly impacted from September through Nov. 4th<\/sup>, Stephenson noted.<\/p>\n\n\n\n

\u201cOur house view is cautiously optimistic,\u201d he said. \u201cWe are still active, still pencils up. But we are going to be a little more on the conservative side.\u201d<\/p>\n\n\n\n

Sector-specific outlooks<\/h2>\n\n\n\n

Starwood Capital Group Managing Director Bakari Adams said higher interest rates make the firm\u2019s risk-reward threshold difficult to achieve. \u201cWe haven\u2019t pulled the trigger on deals,\u201d he said. \u201cWe need a higher hurdle to get there. But going forward, I think we will see opportunities.\u201d<\/p>\n\n\n\n

Of course, you can’t paint real estate with a broad brush. \u201cIt really depends on the sector,\u201d said Adams, who also heads Starwood Impact Investors. \u201cData centers\u2014you see vacancies go down there.\u201d<\/p>\n\n\n

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Dwight Anderson, principal of Blue Vista Capital Management LLC, and Bakari Adams, managing director with Starwood Capital Group.<\/figcaption><\/figure><\/div>\n\n\n

Starwood has been a major investor in U.S. and European data center development through its various investment vehicles. Earlier this year the company launched Starwood Digital Ventures, a platform dedicated to the company\u2019s $8 billion-plus data center investment strategy.  <\/p>\n\n\n\n

The other panelists also identified the pockets of CRE that they are eyeing for equity positions.<\/p>\n\n\n\n

<\/p>\n\n\n\n

Blue Vista is investing in secondary markets and niche plays that require smaller checks. They like self storage <\/a>and small-bay or shallow-bay industrial because of the supply and demand dynamics, and because they are “a lower-basis-type” of investor.  “We are very fond of niche strategies that make sense,” Stephenson said.<\/p>\n\n\n\n

For MetLife, the current focus is on trying to buy multifamily and industrial at discounts to replacement costs, Aiken said. In industrial, they favor the light-scale variety in markets with population density and infrastructure. They also like single-family rentals in communities with lifestyle amenities and good schools. <\/p>\n\n\n\n

Standard Real Estate is pursuing multi-tenant industrial properties because demand is good, and there is not a lot of supply. And, in markets that are proximate to amenities and employees, they see a growing opportunity for industrial tenants to co-locate their offices at the properties.<\/p>\n\n\n\n

But even Jue is managing expectations. \u201cWhat people want out of real estate has changed,\u201d he said. \u201cLove the basis and hate the yield, and still move forward.<\/p>\n\n\n\n

The panel was moderated by Kyle Bolden, senior audit partner, in Ernst & Young’s Real Estate, Hospitality & Construction practice.<\/p>\n","protected":false},"excerpt":{"rendered":"

While investors can finally see the light, there are still reasons to be cautious. <\/p>\n","protected":false},"author":756,"featured_media":1004709967,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21783,21742,51037],"tags":[52377,44078,52376,34880],"class_list":["post-1004709964","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-investment","category-latest","category-trends","tag-blue-vista-capital-management-llc","tag-metlife-investment-management","tag-standard-real-estate","tag-starwood-capital-group"],"acf":[],"yoast_head":"\nULI Special Report: It\u2019s 'Pencils Up' for the Right Property Types - 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\/uli-equity-panel-its-pencils-up-for-the-right-deal\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"ULI Special Report: It\u2019s 'Pencils Up' for the Right Property Types\" \/>\n<meta property=\"og:description\" content=\"While investors can finally see the light, there are still reasons to be cautious.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/uli-equity-panel-its-pencils-up-for-the-right-deal\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-11T11:50:33+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-15T12:24:13+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/04\/IMG_7688.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"624\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Therese Fitzgerald\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/uli-equity-panel-its-pencils-up-for-the-right-deal\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/uli-equity-panel-its-pencils-up-for-the-right-deal\/\",\"name\":\"ULI Special Report: It\u2019s 'Pencils Up' for the Right Property Types - 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