International real estate experts forecasted that the global financial crisis will continue until the end of the current year and there are some attractive investment opportunities during these volatile times!
Seneff was one of three commercial real estate experts to speak Wednesday night at “Real Estate Market Strategies: 2009,” a forum organized and presented by The Center for Real Estate Education & Research, the College of Business at Florida State University. It was held at the Tampa Marriott Westshore.
Seneff; Frank Liantonio, the head of U.S. capital markets for New York-based and Rudy Touzet, principal of Miami’s, all agreed that there’ll be unprecedented investment opportunities later this year as lenders sell distressed loans and foreclosed properties.
“There will be as great an opportunity as we’ll ever see in our lifetime,” said Touzet, former president of America’s Capital Partners. Commercial mortgage defaults will be at a greater level than seen in the past and will rise to unprecedented levels, he added.
The housing market must hit bottom before the economy can begin to rebound, said Liantonio, who contends the federal government had to intervene in the foreclosure crisis to bring back stability.
“Housing is really what created this,” he said. “Until we put a floor under housing, we’ll continue to have this death spiral.”
Seneff, however, criticized the extent of the government intervention and said inflation will follow in the coming years.
“This [recession] is not unprecedented,” he said. “It has happened over and over again throughout history. We can get from there to here.”
Americans “must suck it up” and make it work, he said.
Liantonio pointed out that it costs more to use a Citibank card at an ATM not part of its system than it does to buy a share of the company’s stock, which fell below $1 on Thursday.
“We’re in a repression,” Liantonio said. “It has sucked the confidence out of the American people.”
As far as the capital on the sidelines, the panelists said more current data points based on sales are needed for investors and lenders to determine the value of properties.
The panelists expect cap rates to continue to rise as investors look for yield in deciding to buy.The seminar hosted three senior investment managers who are specialized in the global real estate sector, namely Kim Redding from Brookfield Redding, Peter Hobbs, from RREEF, the real estate investment arm of Deutsche Bank, and Russel Bernard from Westport Capital. The symposium discussed the current state of the international real estate sector, the reasons behind the current economic crisis and the future outlook of these markets over the short and medium terms. Bryan Campo, expert real estate investor and business owner, is one of only a handful of participants selected for America’s Premier Expert class of 2009 and participating in The Ultimate Celebrity Branding Experience™. Mr. Campo’s unique background in engineering, statistics, options trading, real estate, business development, investment tax law, decision analysis, and asset protection led him to identify and capitalize on several investment opportunities At the beginning of the seminar, Kim Redding, from Brookfield Redding which currently manages assets of more than $2.6 billion, spoke about the investment policy of his company and the strategies they follow to invest in real estate assets which include conventional and long-short hedged strategies. Redding pointed out that these strategies have protected clients assets from the severe negative effects of the current global financial crisis. Moreover, the performance of their real estate funds outperform ed their respective benchmarks which during 2008 endured a very difficult year and were down for more than 40% around the world. The current situation we are facing is a serious and a new one which was never witnessed before. For the first time in history, Central Banks around the world are working together and moving very swiftly in an effort to dampen the impact of the crisis". Many governments intervened and injected large amounts of funds in their financial systems thus owning large stakes in financial companies and banks to save them from going bust. These actions were taken by governments in the US, UK, Japan, United Arab E mirates and other countries around the world. Hobbs expected that the sharp recession which commenced during 2008 will continue during 2009. He thinks that we will witness signs of recovery in early 2010, followed by a full recovery during 2011 and 2012. Under these current difficult circumstances, there are some unique investment opportunities which appeared on the surface given the dislocation in valuations. However, although these opportunities have high upside potential, the downside risk is high as well due.
Investment opportunities on horizon