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Building Our Industry, Our Profession, Our Future Whither the Capital Markets? Up, Down & All Around.

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Presentation on theme: "Building Our Industry, Our Profession, Our Future Whither the Capital Markets? Up, Down & All Around."— Presentation transcript:

1 Building Our Industry, Our Profession, Our Future Whither the Capital Markets? Up, Down & All Around

2 Where Commercial Real Estate Comes Together Over several years debt issuance rose & spreads narrowed Q1 / 02Q1 / 03Q1 / 04Q1 / 05Q1 / 06Q1 / 07 Volumes Peak Record Low Spreads

3 Where Commercial Real Estate Comes Together REITs were on tear and able to do accretive acquisitions 33.7% total return S&P/TSX REIT Index Peaks Feb ’ % 12 mo. return

4 Where Commercial Real Estate Comes Together Capital drove investment sales up and cap rates down

5 Where Commercial Real Estate Comes Together Mega institutions & private equity joined the party and did some mega deals! EQUITY OFFICE PROPERTIES 580 Office Properties Location:Across U.S. Size:108.6 Million SF Price:US$39 Billion Purchaser:Blackstone & Others DUNDEE REIT Mixed-Use Portfolio Location:Eastern Canada Size:16.5 Million SF Price:C$2.3 Billion Purchaser:GE Capital Realty

6 Where Commercial Real Estate Comes Together In commercial real estate cracks first appeared......in the REIT markets, which turned negative S&P/TSX Capped REIT Index - (24.2%) 12 mo. return Feb ’07 Peak

7 Where Commercial Real Estate Comes Together Debt markets threw in the towel......with record low volume & high spreads Q2 / 07Q3 / 07Q4 / 07Q1 / 08 Volumes Plummet! Record High Spreads

8 Where Commercial Real Estate Comes Together While the Fed & BoC issue liquidity to “prime the pump” or start more fires? 4.0% US CPI – Negative Real Interest Rates

9 Where Commercial Real Estate Comes Together In a changing market how do you... Access equity capital? Determine your cost-of-capital? Generate the best risk-adjusted returns?... not just survive, but thrive?!


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