A Collection of Key Takeaways – The Counselors of Real Estate 2016 Convention – Washington, DC
Robert J. Pliska, CRE
The Counselors of Real Estate of the National Association of Realtors held their Annual Convention in Washington, DC from September 25, 2106 to September 28, 2016 at the Four Seasons Hotel near Georgetown. Speakers included Jeff DeBoer, President and CEO, The Real Estate Roundtable; Ken Riggs, CRE, President, Situs RERC; Mark Zandi, Chief Economist, Moody’s Analytics; Daniel Rose, CRE, Chairman, Rose Associates, Inc; Victor Calanog, CRE, Chief Economist and Senior Vice President, REIS; Mayor Anthony Williams, Washington DC; Peter Korpacz, CRE, President, Korpacz Realty Associates, Inc; and many others.
A collection of key takeaways and thought provoking comments include:
1) “Proximity to transit increases property values” – Christopher Zimmerman
2) “There is a premium value for walkable spaces now”.
3) “We are extremely aware of the need to make plazas” – David Tuchmann, Akridge
4) “We really want to create a place that makes people feel they’re in a great urban spot”- David Tuchmann
5) “Young people do not want to be in the suburbs” – Zimmerman
6) “Why are companies moving back to the city? They have to go where the talent is” – Zimmerman
7) “In a couple of years, we feel the US will go into a recession, but it will be a normal cyclical recession” – Eileen Marrinan, Grosvenor
8) “We can’t rule out the possibility of a recession, but we think the probability is low” – Kevin White, Deutsche Bank
9) “There isn’t really a bubble in commercial real estate” – Kevin White
10) “The US has been able to weather financial storms in the past” – Kevin White
11) “Supply isn’t a macro problem, it’s a micro problem in some markets” – Kevin White
12) “Millennials are coming downtown and businesses are coming downtown because they want to hire the millennials” – Marrinan
13) “You have to build what will keep millennials as they age – this includes schools” – Marrinan
14) “I do think it’s likely the Fed will bump up interest rates.” – Matthew Anderson, Trepp
15) “We do not think we are in a bubble, we think we’re in a low return environment” – Andy McCulloch, Green Street Associates
16) “We can have high prices, and it’s not necessarily a sign of excess” – Jim Costello, Real Capital Analytics
17) “Regulators are doing their job” – Costello
18) “The one area we are seeing stress is low quality retail” – McCulloch
19) “Regional and local banks are becoming the largest commercial lenders. This is making regulators nervous” – Costello
20) “The next 2 years, the US will experience a major disaster related to infrastructure and we will focus on the deplorable state of our infrastructure” – Dan Rose
21) “The most important stock and trade you have is the history of your dealings and your reputation” – Dan Rose
22) “You must always have a goal”,“Failing to plan is planning to fail” – Dan Rose
23) “Life is a marathon, but treat each day as a 100 meter race” – Rose
24) “The global economy is showing some amazing resilience” – Mark Zandi
25) “Strong community spending is critical to the economy” – Zandi
26) “On average 20% of all buyers in every market are foreign” – Janice Stanton, Cushman & Wakefield
27) “France is very political and very emotional right now” – Marie-Noelle Brisson
28) “France is reeling from the recent terrorist attacks. They have really hurt tourism” – Brisson
29) “France is in charge of securing the border with the UK and they are in charge of preventing migrants from entering” – Brisson
30) “Article 50 has not been formally triggered” – Don Benningfield, Pangaea Associates
31) “Other EU countries will be watching” – Benningfield
32) “Reasons for optimism: There are incentives for both sides to negotiate” – Benningfield
33) “People are being displaced from where they live either because of war or other reasons” – Guniz, Celen, Celen Corporate Property Valuation, Istanbul
34) “Syria is the name tag of immigration, but it is coming from other areas of the world” – Celen
35) “Human trafficking has created such a large economy, the methods of migration will change” – Celen
36) “The best solution is to stop the war so people can go back” – Celen
37) “Brexit was an unforeseen event” – Graham Parry, Grosvenor, London
38) “The UK can’t unravel 40 years of integration without a recession” – Parry
39) “Europe is still an experiment. It’s never really gotten to a stable position” – Parry
40) “China is the biggest blind spot in terms of the global economy” – Parry
41) “If you give people cheap debt, they will do stupid things with it” – Parry
42) “One of our tasks is to convince young people to be politically active” – Ralf-Peter Koschny, BulwienGesa AG, Hamburg
43) “Brexit – Most people expected article 50 to be triggered immediately. It was not” – Parry
44) “European partners are not united on what Brexit means” – Brisson
45) “Some EU countries are telling the UK – if you want a divorce, get out of the house” – Brisson
46) “There is more capital from every single source around the globe than I have even seen” – Stanton
47) “Consumer spending in Germany is rising because people see that there is no point in saving money” – Koschny
48) “People saying that they want to be in the US but they don’t want to be in a tertiary market with a building that is 70% full” – Stanton
49) “It’s very difficult to close a border” – Celen on Turkey
50) “There’s a human crisis in the middle east. We can’t just sit at home an say that’s not our business” – Koschny
51) “Disenfranchisement in the world is a key threat to stability” – Mark Zandi
52) “The absence of inflation is a bigger mystery” – Parry
53) “What has surprised me so far is how well we’ve kept everything together” – Zandi
54) “The current markets are working remarkably well” – Zandi
55) “When Time Warner went to a larger space, they had to agree to share floors while still maintaining the brand” – Lisa Gibson, Time Warner
56) “The new Boston GE development will have a GE logo you can see from Mars. Want to attract young workforce” – Karen Simons, GE
57) “There will be a lot of collaborative space- open space – you can’t have an office” – Simons
58) “There is a learning curve when you move to an open space environment” – Simons
59) “Consolidations are a difficult budget climb- need to fund basics like furniture and space” – Mary Gibert, US GSA
60) “When the CEO of GSA is saying that he does not have an office, it is hard to argue” – Gibert
61) “People, space and technology costs are the most important” – Karen Pritchard, Wellington
62) “With technology, you can work anywhere” – Pritchard
63) “If you put millennials in an office, they feel you are locking them up. They want collaboration.” – Pritchard
64) “So many people are working remotely, that working across shared spaces is a hot topic” – Simons
65) “No one walked away with their minds changed – regarding the Presidential debate” – DeBoer
66) “Trump was speaking directly to the battleground states could have had a lasting effect on those voters” – DeBoer
67) “Clinton has a better spin game” – DeBoer
68) “Less than 10% of Americans decided who the nominees are in the primaries” – DeBoer
69) “80% of business in America is conducted by pass through entities” – DeBoer
70) “Commercial real estate was a target and will continue to be a target, but Trump did not put the target there” – DeBoer
71) “1031 exchanges are in jeopardy today, but if it was not for exchanges, real estate would have completely died in 2008-2009”- DeBoer
72) “There’s too much debt in the US in general, and there’s too much debt in real estate” – DeBoer
73) “We need to drive people away from using debt, and drive them toward using equity” – DeBoer
74) “Banks are clearly in great shape – but underwriting is more strict and loans are harder to get” – DeBoer
75) “CMBS is where Main Street is financed” – DeBoer
76) “We are coming into choppy waters – tax reform, environmental issues, and the future sources of capital” – DeBoer
77) “I want real estate to be taxed on an economic basis” – DeBoer
78) “We definitely need a long term infrastructure build, but where does the dollars come from?” – DeBoer
79) “I am highly skeptical that tax reform will get through Congress” – DeBoer
80) “I’m not sounding the bells on 1031, but I think we should get our arguments in line and prepare to make a case” – DeBoer
81) “If there is unprecedented wage growth, the Fed should feel comfortable bumping rates up” – DeBoer
82) “Industrial people may be the closest to popping champagne due to technology and shipping” – DeBoer
83) “LEED is approaching 5 billion square feet globally” – Winters
84) “Three issues always at play – transparency, opportunity and risk” – Winters
85) “I would like to say that the green battle has been fought and won” – Pogue
86) “What really matters is whether or not these buildings make occupants perform better” – Pogue
87) “People will gravitate to the best performing buildings” – Cliff Majersik, IMT
88) “Higher performing green buildings are leasing for more, have higher occupancy rates and are selling for more” – Majersik
89) “Climate change is a variable we are thinking about at Fannie Mae” – Chrissa Pagitsas, FNMA
90) “I have yet to see a building that cannot hit a 20% reduction in nrg and H20 usage, but does the owner want to do it”- Pagitsas
91) “Federal cybersecurity spending to increase to $19 billion by 2017” – Scott Homa, JLL
92) “Tech growth in Mid-Atlantic region driven by cost of west coast operation” – Homa
93) “88% of new DC households are car free; 77% of millennials report wanting to live in an urban core” – Homa
94) “Include leadership, communications, legal in preparing response plan for potential cyber attack” – Petrella, CyberVista
95) “Best practice if cyberattacked – don’t try to fix internally, get informed security professionals” – Bruce DeGrazia
96) “Prearrange contracts for cyber repair to get faster response in case of attack, fire disaster” – Noah Shlaes, NGKF
97) “The issue with Brexit is about immigration” – KC Conway, CRE, Sun Trust Bank
98) “1/3 of the national GDP lies in the Plains and the Great Lakes” – Conway
99) “What do we do about the 20 or 30% of the workforce that doesn’t have the training or experience to work” – Conway
100) “US is the only country in the world that has a demographic group that its youth is bigger than the demographic that needs to retire” – Conway
101) “We no longer need to chase cheap manufacturing around the world. We don’t need labor” – Conway
102) “65% of the US population lives east of the Mississippi. Why did we build our major ports in California?” – Conway
103) “Retailers are leaving the West Coast ports for the East Coast” –Conway
104) “Adapting in changing times is like reinventing the wheel” – Conway
Robert J. Pliska, CRE, CPA is Owner/Managing Director of SVN (Sperry Van Ness) Property Investment Associates, LLC in Birmingham, Michigan (Detroit) and is a Board Member of the Counselors of Real Estate. Mr. Pliska specializes in the sale, leasing, consulting, managing, financing and accelerated marketing of all types of investment and commercial properties. Mr. Pliska is a local speaker, author, radio guest, panelist and social media expert for many local and national organizations. SVN (Sperry Van Ness) is a commercial real estate organization with over 200 offices and 1500 associates and staff. All SVN offices are independently owned and operated. For more information visit http://www.svn.com; http://www.propinvadv.com or Robert J Pliska, SVN Property Investment Associates, LLC 248-433-1400; Email: robert.pliska@svn.com
About the Counselors of Real Estate:
The Counselors of Real Estate, established in 1953, is an international group of high profile professionals including members of prominent real estate, financial, legal and accounting firms as well as leaders of government and academia who provide expert, objective advice on complex real property situations. Membership is selective, extended by invitation only. The organization’s CRE (Counselor of Real Estate) credential is granted to all members in recognition of superior problem solving ability in various areas of real estate counseling. Only 1,100 people in the world hold the CRE designation. For more information, contact The Counselors of Real Estate, 430 N. Michigan Avenue, Chicago, IL 60611; info@cre.org; Website: http://www.cre.org Phone: 312-329-8430