The Heartland Gathering
Year
September 22, 2014
Our team, known as The Jonna Group. places a concerted framework of focus on annual industry road shows. Routine ICSC events place us in Chicago. New York. and several others. to include the ReCon show in Vegas. Our recent trip to Chicago last Friday on September 19th entailed a company-based road show, a gathering of roughly 20 M&M offices for the latest meet and greet roundup of market recap. This event is in advance of the upcoming ICSC Chicago Deal Making show in October. Following the continental breakfast, the conference took shape with opening comments from the M&M president/CEO followed by the Chief Strategy Officer and subsequent interactive senior panels on the atmospheric climate of commercial real estate. The following anecdotal abridged version of the conference can be abstracted as follows:
• The U.S. is Still the global standard for flight to safety in the investment arena
• An impressive recovery 1s progressively underway for hous1ng/commerc1al real
estate
• REITS are on the cutting edge of property operations/management capabilities:
active buyers & developers
• The sensitivity factor for interest rates next year can affect REIT thresholds for
aggressive offers/applied underwriting.
• Commercial Real Estate is realizing steady gains: Yield profiles of 5-6% or better
have attracted more investors
• Construction is limited -making way (or increased occupancies & rising
rental rates: Best time to sell assets at the top of their cycle
• The list of expanding retailers is quantifying as expansion is relatively
strong and making more inroads
• Shopping center sales are up: Creating more CAP rate compression for
power centers/stabilized strips with credit tenants
• Financing is fluid & fiercely competitive between commercial banks/
credit unions/life insurance companies/CMBS (subject to borrower
needs)
What this Means to You:
The Q4 season Is a precursor to positioning your pipeline for the start of next year in Q1. Try to assess what deals are to be sold or acquired year end or alternatively in 2015 based on market metrics. The flurry of deal making is prevalent and the upcoming ICSC shows in both Chicago this October and New York this December arc not to be missed if you plan to monetize your roadmap to this modem day real estate renaissance.
“Someone is sitting in the shade today because someone planted a tree a long time ago” -Warren Buffet
