25 Key Takeaways from the Counselors of Real Estate 2023 International Conference in Prague, Czech Republic
By Robert Pliska, CRE, CPA
The Counselors of Real Estate of the National Association of Realtors had their International Conference in Prague, Czech Republic from June 14, 2023 to June 16, 2023 sponsored by the European Chapter. The essential objective was to identify the hottest real estate issues and deliver clear answers from different perspectives. All panel sessions were set with multi continental guests’ presence to make the conference fruitful for a broad professional audience. The conference represented a unique opportunity to receive local and foreign opinions from top real estate professionals, meet them in person and chat about preferred topics.
1) “Live, work, play”, “15 minute cities” and/or “metroburbs” are important considerations in development and where to locate.
2) There is a “flight to quality” and “flight to mixed use” in the office component.
3) Most malls are on a “slow motion train wreck”. Many converting to “live, work, play” and “15 minute cities”.
4) More equity is required in transactions. Going from 70-75% loan to value to 50-60% loan to value.
5) Refinancing is now more “cash in” vs “cash out”
6) Not all product types are experiencing substantial value reduction like the office product type. Office is transforming and evolving with a potential of a 30% value reduction. Retail such as grocery anchored shopping centers remains strong.
7) Increasing interest rates are considered to be “normalizing” since prior rates were so low for so long of time.
8) In retail, it appears it is not a “space issue” but a “capital issue”. Tenant leasing continues to be strong.
9) Asset values drop as interest rates increase.
10) Europe trying to get away from dependence on Russia and China – such as oil and other goods.
11) Russia appears to be afraid of China but won’t admit it. Russians thrive on promoting fear.
12) The Ukrainian war is having a large impact on Europe. Example: over 2 million jobs were lost as Ukrainians in other parts of Europe were asked to come back and fight the war.
13) It appears Russia is not liked by most Europeans – the communism they brought for 45 years – 1944 to 1989, not trustworthy, aggression, etc.
14) ESG is considered by some as more as an investment tool than a planning tool.
15) It appears Europe has progressed more with ESG and green than the United States.
16) Affordable housing is an issue in many locations throughout the world – New York, Europe, Turkey, etc.
17) Not all product types are experiencing major issues. Industrial, hotels and self-storage continues strong.
18) There is still uncertainty as to when and if a recession will appear.
19) Amazing how the world is now so small due to the internet, television, phones, travel, etc.
20) Bias in the news media appears to be rampant throughout the world.
21) The United States is still considered a better safe haven for investors.
22) Inflation in Asia is not as high such as Japan at 3.5%
23) Remain, renovate, repurpose, redevelop and replace are options for office.
24) Three key items in commercial real estate investment – the property, the team and the market.
25) “Dry powder” still exists and/or is being created for the right situations.
The Counselors of Real Estate, established in 1953, is an international consortium of credentialed real estate problem solvers who provide expert advice on complex real property and land related matters. Experienced, innovative and credentialed problem solvers, Counselors practice in 22 countries and offer expertise in more than 60 real estate disciplines across all asset classes. Invited to membership by their peers, Counselors have earned the prestigious CRE designation.