This is the fifth of six installments of my notes and comments from Institutional Real Estate, Inc.’s Dealmakers Summit (Sept. 14 – 16, 2009).  This section regards the state of commercial real estate equity.  See my blog at ToddAPhillips.blogspot.com for the other installments.

INSTITUTIONAL EQUITY

Earlier in the year, Institutions’ investment allocations were out-of-whack.  A quickly falling stock market made real estate appear over-allocated.  Real estate values have subsequently dropped and equities have recovered.  It appears as though allocations have been repaired and may now be in line for institutions to start investing in real estate again.  Given that even the least savvy investors can infer that bond values will drop in the near to mid future (hard for treasuries to go below zero), then there would seem to be a case for allocating even more to real estate. 

This is the third of six installments of my notes and comments from Institutional Real Estate, Inc.’s Dealmakers Summit (Sept. 14 – 16, 2009).  This section regards the state of ‘deal flow’ for commercial real estate.

DEAL FLOW

It is no secret that deal flow is off more than any real estate professional would like.  Many in the real estate industry are highly dependent on deal flow for their livelihood.  We should not be shunned for this, in a functioning system we need dealmakers, we are the fabric of the system.  I don’t know if most professionals have come to grips with just how much deal flow is off, however.  Many experts at the conference calculated that deal flow is off 90% or more; some are saying 95%. Ouch.

Last week I spent three days in La Jolla, CA at Institutional Real Estate, Inc.’s Dealmakers Summit.  I was impressed by the number of very high-level speakers and I think everyone can benefit from what they said.  Believing such, I am going to attempt to regurgitate some of what I heard along with my own comments and opinions. 

I will post my comments in the following segments: (1) General Economic Outlook, (2) State of Real Estate and Outlook, (3) Deal Flow, (4) Debt Outlook, (5) Equity Outlook, and (6) Recommendations on What To Do Next.

Economic Outlook

SNL reporting several lenders aggressively quoting loans for creation of TALF-backed CMBS pools.