Where Are the Pockets of Strength in Real Estate?
CNBC asked real estate experts for their insight on the economy, the housing market and commercial real estate.
LeFrak on Commercial Real Estate
“I think it’s very uneven right now, and I think that the problems with credit are quite severe still. The amount of money available for supporting these transactions is very limited, because the CMBS issuance is down by 90 percent.”
Richard LeFrak, The LeFrak Organization President
Building Talk With Trump
“If you look outside the country, it’s doing very well. Large sections of the world are doing very well. This country generally isn’t, and yet Manhattan is very strong.”
Donald Trump, Trump Organization Chairman & President
Raising the Roof on REITs
“If the credit markets come back, it’s better to be a private operator of real estate. If they don’t, and they’re somewhat diminished, if they are not so robust…then being public would be a good thing.”
Steven Roth, Vornado RealtyTrust Chairman & CEO
Capri Capital’s Saudi Arabia Deal
“There are 6.3 billion people living outside of the United States, and the international emerging markets are growing very quickly. Saudi Arabia has just begun to open up its economy to the world, and it’s the 800 lb. gorilla of the Middle East.”
Quintin Primo, Capri Capital Advisors CEO
Spotlight on Residential Real Estate
“It will get worse before it gets better. It will get better, because the demographics are compelling. We have more people living in homes, we have the population growing from 300 to 350 million people, immigration, baby boomers, the eco-generation, and all those are driving demand. So long-term the value of your house will increase, but in the short-term the value of your house will probably decrease.”
Henry Silverman, Realogy Corp. Non-Executive Chairman
Banking on Hedge Funds
“We look at it from a quarter by quarter, and if you think about it, $60 billion raised first quarter last year, and now it’s down to $16 billion, one could take a look at it and say ‘Is that the end of hedge funds?’ But I think when we take a step back and realize there’s still $2 trillion at work in hedge funds, 7,000 managers deploying that capital, I don’t think it’s time to call the dance off yet.”
Doug Wurth, JPMorgan Private Bank Global Head of Alternative Investments
Commercial Credit Crunch
“I think credit conditions in today’s market are very difficult…I think it’s very hard today to find debt capital. There’s a significant amount of equity chasing the market today, looking at it because there’s a perception, certainly in Manhattan…that the market’s a bit broken and that there’s an opportunity for investors who for the past three, four years during the bull run sat on the sidelines now see an availability and opportunity to come in and purchase.”
William Macklowe, Macklowe Properties Chairman & CEO