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NewsSan Diego Daily Transcript- 11/17/09November 17, 2009 Land use panelists predict rough 2010
By JEN LEBRON KUHNEY, The Daily Transcript A recession is a terrible thing to waste, according to the Urban Land Institute, and speakers at ULI San Diego/Tijuana District Council's annual Real Estate Trends Conference said those looking to invest in commercial real estate will have another couple years of being able to take advantage of it. Fifteen real estate industry observers and professionals spoke to a group of about 300 people at
While many of the panelists and guest speakers tried to remain optimistic about things to come, one theme carried through the morning: It is likely 2010 and 2011 will be rough years for real estate. ULI's annual Emerging Trends in Real Estate report said next year will bring about the survival of the fittest, as investors can expect property values to decline 40 percent to 50 percent off their market highs. Discussion of local and national market trends dominated the first half of the conference with experts discussing how "There are no markets anyone is really excited about. There's not a whole lot of optimism," said Rick Kalvoda, a principal of PricewaterhouseCoopers Real Estate Advisory Practice who helped advise and research ULI as it put together its latest report. However, he said there are some markets that are performing well, relative to the current economic climate. Locations that are considered global gateways, 24-hour cities, brainpower centers and have a barrier to entry were considered most likely to perform better than most cities, as the real estate industry weathers the current storm. The city's lack of an international airport and its shallow port kept it from ranking higher. A panel comprising local representatives from Brookfield Homes, Jones Lang LaSalle and Epsteen & Associates, agreed " "We've had a shortage of retail (in the past) and that's going to help us in the retail sector in the next 18 months." Similarly, shrinking inventory pools in the housing market are helping drive up home activity, said Brookfield Homes' Vice President of Sales and Marketing Lora Heramb. A panel comprising San Diego City Council President Ben Hueso, the League of California Cities' Executive Director Chris McKenzie, and the Center for a Sustainable California at UC Berkeley's Co-Director Gary Binger agreed one of the key factors in the future of real estate is how governments at the local, state and national levels handle policy. The topics of their discussion focused on environmental legislation like the California Environmental Quality Act (CEQA) and concepts of "smart growth." While some like Heramb said there is still a demand for low-density detached housing, Hueso said it is the job of local governments to be objective and plan for the future. " He said the city created budgetary plans that include improving mass transit and denser affordable housing in order to keep up with The final panel consisted of three presidents and CEOs of real estate companies doing their best to survive the current downturn. Developer Doug Wilson walked away from $250 million-worth of development projects, but is thriving on his "core" business: Douglas Wilson Cos., which performs receivership services. He said the key to his "overnight" success was "30 years of hard work" and understanding the real estate world works in cycles. "At the end of the day we're all touched (by the downturn)," he said. "It's painful, but it's reinforced the importance in my life about having underlying cash flow." "Really what I've learned is never think things are constant, try to be counter-cyclical and be opportunistic as you can be." -------------------------------------------------------------------------------- Send your comments to Jennifer.Lebron@sddt.com |
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