2017 | volume 1 · multifamily property management business. delegates issac hera; new york, ny;...

The Official Voice of the Foreign Real Estate Industry

2017 | Volume 1

INSIDE 2

Welcome New Members

32017 New Keystone

Members

4Interview with the AFIRE Chairman

62017 Executive

Committee Bios

10Winter Conference

Recap

13Winter Conference

Keynote Address

17Winter Conference

Photos

19MIPIM Brunch Photos

212016 in Review

26AFIRE Guide Preview

30Calendar of Events

312017 European

Conference Registration

Former CIA Director to Address 2017 AFIRE Annual Meeting

FIRE is pleased to announce that John O. Brennan, Director, Central Intelligence Agency, 2013-2017, will address the 2017 AFIRE Annual

Meeting in San Francisco this September.Mr. Brennan was sworn in as director of the Central

Intelligence Agency on March 8, 2013. As director, he managed intelligence collection, analysis, covert action, counterintelligence and liaison relationships with foreign intelligence services. Before becoming director, Brennan served at the White House for four years as assistant to the President for Homeland Security and Counter-terrorism. During that time, he advised the President on counter-terrorism strategy and helped coordinate the US government’s approach to homeland security, including its policies for responding to terrorism, cyber attacks, natural disasters and pandemics.

Brennan began his service in government at the CIA, where he worked from 1980 to 2005. He spent most of his early career in the agency’s main analytic arm, the Directorate of Intelligence, specializing in the Near East and South Asia before directing counter-terrorism analysis in the early 1990s. In 1994 and 1995, he was the agency’s intelligence briefer to President Bill Clinton. After an assignment as a chief of station in the Middle East, Brennan served from 1999 to 2001 as chief of staff to George Tenet, who was then director of Central Intelligence. Brennan next worked as deputy executive director of the CIA until 2003, when he began leading a multi-agency effort to establish what would become the National Counter-terrorism Center. In 2004, he became the center’s interim director. After retiring from the CIA in 2005, Brennan worked in the private sector for three years.

Brennan graduated from Fordham University with a bachelor’s degree in political science. While enrolled at Fordham, he studied abroad at the American University in Cairo. He later attended the University of Texas at Austin, where he earned a master’s degree in government with a concentration in Middle Eastern studies. ★

AJohn O. Brennan, Director, Central Intelligence Agency, 2013-2017

2 0 1 7 E U R O P E A N C O N F E R E N C E

Claridge’sLondon, United Kingdom

June 7-8, 2017Event information on page 31

INVESTING AMIDSTPOLITICAL TURMOIL

22017 I s sue 1 AFIRE News

2017 | Issue 1Volume 35 Issue 1

Association of Foreign Investors in Real EstateRonald Reagan Building1300 Pennsylvania Avenue, NWWashington, DC 20004-3020Telephone202.312.1400E-mailafireinfo@afire.orgWebwww.afire.org©2017 AFIRE

OFFICERSChairmanCatherine L. PfeiffenbergerSenior Vice PresidentSkanska USA CommercialDevelopment Inc.

Deputy Chairman Edward M. CasalChief Executive, GlobalAviva Investors

Chief ExecutiveJames A. FetgatterAFIRE

Treasurer Donald M. WisePresident and Chief Executive Officer Metzler Real EstateCorporate SecretaryStephen TaylorVice President, Real Estate Healthcare of Ontario Pension Plan (HOOPP)

Purpose AFIRE News provides its membership with information and news on legislation, issues and events impacting institutional real estate investment.AFIRE News is published three to four times a year by the Association of Foreign Investors in Real Estate.

EditorLexie Miller

Editorial SubmissionsArticles and materials for inclusion in AFIRE News may be submitted to the AFIRE office via e-mail to [email protected].

Welcome New MembersHolland Partner GroupFounded in 2000, Holland Partner Group (HPG), based in Vancouver, Washington, is a fully integrated real estate investment

company. Current assets under management and development represent $7.5 billion in 25,000 multi-family units with over 450,000 of mixed use retail located in the Western United States’ most sought-after markets. HPG accomplishes its investment objectives in strategic alignment with its capital partners through five integrated operating companies including, development, construction, acquisition, redevelopment and management. The company’s vertically integrated focus has developed the real estate industry’s most consistent and reliable delivery mechanism. HPG’s combined business volume in 2016 exceeded $2 billion, made possible by our 750-member team. A hallmark of HPG is its narrow focus on exceptional developments in select markets and its rigorous research based investment criteria. ★Delegates:Clyde Holland; Vancouver, WA; 360-992-7442;[email protected]

Mike Grippi; Denver, CO; 303-888-3876;[email protected]

North America Sekisui/Sekisui House LimitedNorth America Sekisui House, LLC (NASH), is a wholly-owned subsidiary of SEKISUI HOUSE, LTD., one of Japan’s largest homebuilders and leading diversified developers. NASH invests in

land opportunities and develops environmentally sound projects based on long-held traditions of maintaining ecological balance and sustaining asset appreciation. NASH takes a risk mitigated strategic focus, which is to invest only in the very best projects in the very best markets in the United States. The firm’s portfolio is balanced between suburban focused master-planned communities and urban focused multifamily and mixed-use developments. NASH executes its strategies through joint venture relationships with a limited number of operating partners who are recognized leaders in the industry, long-established in their given markets, and whose core values align with NASH’s. ★Delegates: Tom McKay; Arlington, VA; 703.740.0317; [email protected] Koji Yamada; San Diego, CA; 858.384.5797; [email protected] Yoshimura; Salt Lake City, UT; 801.869.4017; [email protected]

VankeVanke US is a trusted capital partner to American real estate

developers on both commercial and residential projects. The Vanke US portfolio currently consists of seven residential and two commercial properties in New York;


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four residential and one commercial properties in San Francisco; and one residential property in Seattle. Vanke US is currently focused on strategic partnerships in gateway cities, providing smart capital, which encompasses financing, project management, design insight and other value-added services that leverage its entrepreneurial culture, diverse talent and deep corporate resources. Vanke US’ parent company, China Vanke, is one of the world’s largest real estate developers and is #356 on the Fortune Global 500. China Vanke began property development operations in 1988 and has since expanded to 66 cities across Mainland China and to overseas markets in the US, Singapore and the UK. In 2015, the company generated revenue of $28+ billion, and its stock is traded on the Shenzhen and Hong Kong stock exchanges. It is seen as a pioneer in the real estate capital markets, most recently serving as the sponsor of China’s first REIT IPO. ★

DelegatesKai-yan Lee; New York, NY; 646 650 2882; [email protected] Ridloff; New York, NY; 646 650 2880; [email protected] Wong; New York, NY; 646 650 2887; [email protected]

YellowstoneYellowstone is a foreign based holding company that owns a controlling interest in a US based company called ENP, which is an active investor and manager of multifamily properties throughout the eastern half of the United States. ENP currently owns 11,000 units in 9 states,

primarily in the Midwest and Southeast, and is actively looking to grow its portfolio to between 20,000-30,000 units within the next 3 years. The firm is heavily focused on class B assets that have upside through renovations and improved property operations. Issac Hera, formerly with Brack Capital, is the CEO of ENP and directs all new acquisitions, asset management and capital markets activities. He is assisted by Ken Bodenstein, an executive at the firm with more than 25 years of experience in the multifamily industry. Along with their CFO, Karen Katsoff, senior management has more than 75 years of combined real estate and financial reporting experience. In addition the firm’s two co-chairmen, Frank Roseen and Baruch Itzhak, both have extensive backgrounds in real estate with long tenures at firms such as GE Capital, Elad Group and Siemens. ENP has its own property management subsidiary, Element Management Company, that is highly experienced in executing value add repositioning strategies. They are based in South Florida with regional managers located in Michigan and Atlanta and employ more than 300 people. The three senior principals of the firm have worked together for more than 20 years and have extensive experience in all facets of the multifamily property management business. ★DelegatesIssac Hera; New York, NY; 917.509.6892; [email protected] Rosen; New York, NY; 954.647.2814; [email protected] Bodenstein; New York, NY; 917.416.9500; [email protected]

AFIRE welcomes 5 members into the Keystone category. The Keystone designation began in 1994 as recognition of the value that long-standing members give to the stability and success of AFIRE. Members receiving this designation have completed five full years of AFIRE membership. These members are truly the backbone of the Association. They are to be congratulated for their long-term

commitment to and support of AFIRE and its goals.

2017 Keystone Members

AFIAA Anlagestiftung, Switzerland

Iron Tree Capital LLC, USA

K & L Gates LLP,USA

National Pension Service of Republic of Korea, South Korea

Skanska USA Commercial Development Inc., Sweden


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Can you give us a brief description and history of Skanska? What is the size of Skanska´s real estate portfolio in the US? How does this compare to other parts of the world?

Skanska AB, headquartered in Stockholm and publicly traded on

the Swedish stock exchange, has been in business for more than 125 years. The company is one of the world’s leading project development and construction companies with 57,000 employees located throughout Scandinavia, the US and Europe. In the USA, which is Skanska’s largest market, the company operates multiple business units, including: Commercial Development, Infrastructure Development, Civil and Building Construction.

Skanska develops office and multi-family real estate in 20 cities around the wold. In the US, we have developed in excess of 6 million square feet of development projects with a focus on high quality and sustainable office, lab, mixed-use, and multi-family residential projects. Our global real estate portfolio is generally allocated on an equal basis between the US, Scandinavia, and Europe with some adjustments due to different market cycles.

What are some of Skanska´s notable investments in the US?

Skanska started investing in the US real estate market in 2009 when there was a lot of opportunity for investors with cash and the ability to underwrite risk. We were successful in securing great sites and developing some of the newest trophy assets in several core gateway markets, including the Seaport District of Boston, the Central

Business District in Washington, DC, the Houston Galleria, and South Lake Union in Seattle. Our current projects include 2+U, an iconic office tower in Seattle designed by Picard Chilton, and 121 Seaport, a stunning elliptical office tower in Boston designed by CBT.

How and when did Skanska take the lead in sustainable real estate?

As a Swedish-owned company, our commitment to sustainable development is in our DNA. At the core of Skanska’s purpose, is the idea that we build to improve society. That means that whether we are working as a developer or as a builder, we promote green solutions

and building in a way that minimizes the negative impacts construction can have on the environment. Sustainability is a major part of our culture and impacts the way we think, the way we design and build, the way we act and the way we work within our communities. Our commitment is demonstrated by our continued involvement and leadership role in a number of organizations, including; the World Business Council for Sustainable Development and the UN Global Compact. All of our projects attain an ISO14001 certification and our development projects aim to achieve a minimum of LEED® Gold certification, with many

achieving Platinum status. Our in-house research and development teams are always searching for new and innovative solutions to further improve our projects.

How did you personally become involved with AFIRE?

I was introduced to AFIRE by Steve Kohn who had been a member for years. I have always been appreciative of the fact that at my first meeting he and Brad Olsen introduced me to a number of members and welcomed me to the family. As AFIRE continues to grow and add members from around the world, I think it is vital that we continue to be an open and inclusive organization.

Interview with AFIRE Chairman Cathy Pfeiffenberger

S u s t a i n a b i l i ty i s a m a j o r p a r t o f o u r c u l t u re a n d i m p a c t s t h e w ay

w e t h i n k , t h e w ay w e d es i g n a n d

b u i l d , t h e w ay w e a c t a n d t h e w ay w e w o rk w i t h i n

o u r c o m m u n i ti es .


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As part of this effort the AFIRE Board hosts a breakfast for new members at each meeting to allow new and prospective members a chance to get to know the Board members in a smaller setting. It is also a key function of the Board members to welcome the new members the group and introduce them to the group.

What do you see as AFIRE´s most important strengths?

As an organization AFIRE represents some of the largest and most dominant players in the global real estate world. One of our key missions is to host several conferences a year. Our conferences are designed to provide our members with good networking opportunities, exceptional speakers and panelists that share their insights on the market.

How do you see the role of women changing in real estate?

Hopefully improving! There are a lot of very talented young women in the real estate world but it is also a very challenging and demanding life style. It is also well documented that diverse and inclusive teams lead to innovative solutions and success so we need to work on ways to increase our diversity in the real estate world.

The good news is there are a lot more networking opportunities and mentoring programs for women as well. Even at AFIRE we try to focus on increasing the participation of women and minorities in our meetings so that we can increase the diversity of thought, which is critical to surviving in challenging times!

What worries you most about US real estate?

From a short-term perspective, I worry about geopolitical risk, a rising rate environment and increasing amounts of capital flowing into the US – all of which are somewhat typical risks at various times in the real estate cycle. Over the long term, however, I worry about our ability to adapt quickly enough to an environment that is being impacted by major technology changes. The rapid growth of artificial intelligence and robotics will impact job markets, how we live and how we work. The availability of high speed internet and the growing “internet of things” will determine the growth markets of the future. We need to assure that we are ahead of the game and identifying the locations that will become the new “gateway” markets. ★


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2017 AFIRE Executive Committee Catherine L. Pfeiffenberger,

LEED APChairmanMs. Pfeiffenberger is the Senior Vice President, Skanska USA Commercial

Development Inc. and a member of the management team and the Deal

Review Committee of the Commercial Development group within the USA. Development in the USA is focused on the design and development of high quality, sustainable office, mixed use and residential high rise projects in core urban markets. Skanska uses an innovative, sustainable and community minded approach to develop environments where people can thrive and be successful. Ms. Pfeiffenberger is responsible for developing long term investment strategies, working with external capital partners and managing the disposition of assets. Prior to joining Skanska, Ms. Pfeiffenberger had an extensive career as an investment banker at Lehman Brothers focused on public finance, project finance, and public private partnerships. She is a member of the Urban Land Institute Responsible Property Investing Council, Chairman of the Board of the Association of Foreign Investors in Real Estate and a member of the Green Building Advisory Committee for the New York Academy of Sciences. Ms. Pfeiffenberger earned a Bachelor of Arts degree in economics from the State University of New York at Albany.

Edward CasalDeputy ChairmanEd Casal, the Chief Executive, Global Real Estate, for Aviva Investors, is responsible for setting the strategic

direction and building the global real estate division. He is also a member of

the Aviva Investors Executive Committee. Mr. Casal’s real estate career began in 1977. Since then, he has been an investor, banker and advisor. He spent over 20 years undertaking real estate transactions on behalf of institutional investors, industrial corporations and REITs while working at Goldman Sachs & Co, Dillon Read & Co, and UBS. During that time he originated and executed in excess of US$20 billion of real estate transactions including both entity-level and real estate property-level transactions.

Prior to assuming the leadership of Aviva Investors global real estate, he served as global Chief Investment Officer for the Aviva Investors global indirect real estate division. Immediately prior to joining Aviva Investors, Mr. Casal served as Chief Executive Officer of Madison Harbor Capital, a real estate multi-manager firm he co-founded in 2003. Mr. Casal holds a BA from Tulane University, where he received the Wall Street Journal award for excellence in Finance. He also has an MBA from the Harvard Graduate School of Business. Mr. Casal is a member of the Urban Land Institute, the Pension Real Estate Association (PREA), and the National Association of Real Estate Investment Managers. He is Deputy Chairman of the Association of Foreign Investors in Real Estate (AFIRE). Ed is also on the Board of Cousins Properties, a NYSE-listed REIT.

James A. Fetgatter FRICS Chief ExecutiveJim Fetgatter is chief executive of the Association of Foreign Investors in Real Estate (AFIRE), a position

he assumed in 1992. Before joining AFIRE, Mr. Fetgatter spent 15 years in

the real estate industry, with the last five spent in Dutch and British property companies, both in Washington, DC. Mr. Fetgatter served as an officer in the US Navy and holds a BS from Oklahoma State University and an MBA from Harvard Business School.

Donald M. WiseTreasurerDon Wise is President and Chief Executive Officer of Metzler Real Estate and has overall responsibility

for the formulation and successful implementation of North American

real estate investment strategies for the firm’s institutional and private clients. Mr. Wise brings nearly 40 years of substantial real estate experience and leadership to the firm. Prior to joining Metzler in 2003, he directed asset management for Unico Properties and, earlier, that company’s property management and leasing group. Mr. Wise also led various real estate assignments in principal


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markets across the US on behalf of JLL. He began his career with The Austin Company, where he helped design and build a number of industrial, laboratory and office facilities. Mr. Wise is active in the Urban Land Institute and serves several non-profit and civic organizations including YouthCare, Leadership Tomorrow and Downtown Seattle Association. He holds a BS in Civil Engineering from Iowa State University and a MS in Civil Engineering from the Illinois Institute of Technology. He also completed the Executive Program at the Stanford Graduate School of Business.

Stephen TaylorCorporate SecretaryStephen Taylor is the Vice President, Real Estate for the Healthcare of Ontario Pension Plan (HOOPP)

with responsibility for overseeing HOOPP’s Canadian and international

real estate investment programs. HOOPP is one of Canada’s largest pension plans with over $70 billion in net assets. The Plan’s real estate holdings include over $11 billion in properties located in Canada, Europe and the United States. Prior to joining HOOPP in September 2014, Stephen was President and COO of Morguard Investments Limited, a major Canadian real estate company providing management and advisory services for over $15 billion in real estate assets held by institutional and corporate investors. Before joining Morguard in 1998, Stephen had over 20 years’ experience providing acquisition, disposition and asset management services to a major Canadian financial institution and two large development companies. He is a graduate of the University of Toronto and holds a Master’s Degree in Management Studies from Oxford University. Stephen is active in the real estate community – he is the Past Chair of the Board of Directors of REALpac (the Real Property Association of Canada), and has served as a Board member for NAREIM (the National Association of Real Estate Investment Managers) and AFIRE (the Association of Foreign Investors in Real Estate). He is also engaged in the Not for Profit sector, having been a long term Board Member and Past Board Chair for Covenant House Toronto (providing shelter for homeless youth) and the Catholic Children’s Aid Society of Toronto.

Adam AdamakakisMember at LargeMr. Adam Adamakakis is an Exec-utive Vice President, Investments, Office, North America at Ivanhoé

Cambridge, Inc. Mr. Adamakakis is responsible for investment manage-

ment and asset management in the United States and works in collaboration with Callahan Capital Partners. He was earlier Executive Vice President, Investments at the firm. He served as an Executive Vice President of Eastern Region at SITQ. Mr. Adamakakis is responsible for all of the investment, asset management and leasing activities for the Eastern Region portfolio, both in Cana-da and the United States. Prior to this, he was employed at RBC Capital Markets Real Estate Group for 14 years. Mr. Adamakakis joined the RBC as an Associate and then occupied the successive positions of Vice President and Director. He was appointed a Managing Director at the RBC Capital Markets Real Estate Group, Inc. in 2006 and led transaction teams in numerous high-profile of-fice deals. Mr. Adamakakis serves as the Regional Chair-man of the MIT Educational Council since 2005. He serves as a Director of Fondation St-Clement, since 2007 and Urban Development Institute (UDI), since 2008. Mr. Adamakakis served as a Director of Hellenic Board of Trade in 2009. He holds an M.Sc. in Real Estate Develop-ment from Massachusetts Institute of Technology (MIT) as well as B.Sc. Architecture and a B. Architecture from McGill University.

Martin Brühl FRICSMember at LargeAs Chief Investment Officer Martin Brühl is in charge of transactions management on

behalf of the real estate division of the Union Investment Group, which

combines the real estate activities of the cooperative banking sector in Germany. With assets under management totaling around EUR 34 billion, Union Investment’s investment focus lies on office, retail and hospitality assets in core markets in Europe, the Americas and Asia-Pacific. Prior to moving to Union Investment, Martin Brühl enjoyed a twenty year career in the real estate and business consultancy industry and has worked for groups like Arthur Andersen and Cushman &


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Wakefield. Trained as a bank officer and equipped with a degree in real estate appraisal and finance, Martin Brühl has recently served as President of the Royal Institution of Chartered Surveyors (RICS), a global professional body in land, property and construction, and continues to act as ambassador for responsible and sustainable investment in real assets across borders.

Glenn GrimaldiMember at LargeGlenn Grimaldi is the Executive Vice President, Head of Commercial Real Estate Finance for HSBC

Bank, USA. HSBC is one of the world’s largest and best capitalized

financial institutions with offices in over 55 countries. HSBC Commercial Real Estate US has offices in New York, Boston, Washington DC, Miami, San Francisco and Los Angeles. Mr. Grimaldi has 28 years of experience in Commercial Real Estate. He manages a portfolio of $16 billion in commercial mortgages and as head of Commercial Real Estate Finance for the US, he oversees the financing of apartment buildings, commercial office buildings, hotels, retail centers and other mixed use properties. Product offerings include but are not limited to, permanent, acquisition, bridge, repositioning, and construction financing, as well as secured and unsecured lines of credit, and letters of credit. HSBC Bank USA has been involved in the Syndication of over $40 Billion of Commercial Real Estate Financing. Mr. Grimaldi is a member of the National Multifamily Housing Council Advisory Committee, the Young Mortgage Bankers Association Board, and the Association of Foreign Investors in Real Estate organization.

Willys H. SchneiderGeneral CounselMs. Schneider is Senior Counsel at Arnold & Porter Kaye Scholer, focusing on tax law. Her practice

is broad-based, covering tax issues relating to mergers and acquisitions;

formation and operation of partnerships, limited liability companies and REITs; structured finance, including mortgage-backed (REMICs) and asset-backed securitizations, and structuring of private equity funds. Much of her practice involves cross-border issues, including, in particular, tax planning for non-US investors

in US real property. Ms. Schneider is a member of the Board of Directors of each of the International Tax Institute and Poets & Writers. She has also served as an Articles Editor of The Tax Lawyer, the quarterly journal of the Section of Taxation of the American Bar Association. Ms. Schneider is the author of numerous articles and book chapters in multiple publications dealing with a variety of income tax issues, and frequently participates as a panelist in programs on tax issues. She is proficient in French and German. Ms. Schneider received her AB, cum laude, from Princeton University and her JD from Columbia University School of Law, where she served as Articles Editor of the Columbia Law Review.

Mark GibsonDirector of ProgramsMr. Gibson is a founding partner of HFF, having joined HFF’s predecessor firm, Holliday Fenoglio,

& Company, in 1984 which was subsequently rebranded as Holliday,

Fenoglio, Dockerty and Gibson; Holliday Fenoglio Fowler; and HFF. Mr. Gibson became a Director and Vice Chairman of HFF, Inc. in November 2006, prior to the company’s IPO in 2007 and, effective April 1, 2014, became the Chief Executive Officer of HFF, Inc. Mr. Gibson is a former trustee for the Urban Land Institute (ULI) and a current member of ULI’s Executive Committee; member of the Association of Foreign Investors in Real Estate (AFIRE) Executive Committee; former chairman of the University of Texas Real Estate Finance and Investment Center and currently a member of its Executive Committee; member of the President’s Advisory Board at UT Southwestern University Hospitals and Clinics; member of the McCombs School of Business Advisory Council at The University of Texas at Austin; advisory board member of Baylor Health Care System Foundation; Trustee and member of the International Council of Shopping Centers (ICSC); and a member of the World Presidents’ Organization. Mr. Gibson graduated in 1981 from the University of Texas at Austin with a B.B.A. in Finance.

Stephen R. CollinsDirector of MembershipSteve Collins is an International Director and President of JLL’S Capital Markets Group based in

Washington, DC. He has served in his


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capacity as President since 2014. He has overall responsibility for the successful structuring and implementation for the various Capital Markets Group service lines. Mr. Collins is responsible for the approximately 440 capital Markets Team staff. He also serves as the Lead Director for JLL’s International Capital Group, a high-level team of experienced advisors located around the globe accessing cross-border capital for large scale transactions. He has continued in this role since 2009. Prior to JLL, Mr. Collins was a partner in Spaulding & Slye, a Boston based real estate services group providing real estate solutions nationally. He co-led the Capital Markets team in the Mid-Atlantic. Spaulding & Slye was bought by JLL in 2007. Prior to Spaulding & Slye, he was the lead director for EYKL’s Mid Atlantic capital markets team where he worked closely with the audit and tax divisions to provide solutions to the firms’s clients. Mr. Collins was a founding Partner in the Washington, DC based real estate services firm, Larson, Ball and Gould and was responsible for their expansion into what became GVA Worldwide. He served as President of GVA Worldwide for 2 years and helped organize the sale of Larson Ball and Gould to Goodman Seeger, Hogan Hoffler/ Virginia Power in 1998. He left to join EYKL. He has over 30 years of commercial real estate experience. He is a graduate of University of Delaware.

R. Byron CarlockDirector of Legal & Tax InformationByron Carlock leads PwC’s U.S. Real Estate Practice. With 28 years

of experience serving the industry, he brings extensive knowledge of the

full real estate life cycle including matters ranging from strategic planning and property transaction advisory to capital formation, and business plan execution. In addition, he has expertise in governance, board matters, mergers and acquisitions and corporate conflict matters. Mr. Carlock has experience advising major clients including corporate owners and users, developers, hospitality organizations, investors and REITs. Prior to assuming his current role, Mr. Carlock served as the CEO and President of CNL Lifestyle Properties, Inc for seven years and served CNL as President of two other REITs over his 11-year tenure there. His resume also includes three years as Executive Vice President and Chief Investment Officer of Post Properties and nine years as Managing Director for Crow Holdings International. Mr. Carlock is a CPA, currently a governor of the Urban Land Institute (ULI), a

member of Real Estate Roundtable, and NAREIT. He is also a board member of AFIRE, Harding University College of Business Administration, Harvard Club of Dallas and a board member emeritus of Harvard Business School. Mr. Carlock earned his BBA at Harding University and also participated in the International Asian Studies Program at The Chinese University of Hong Kong, where he was a Rotary Scholar. Byron also earned his MBA at Harvard Business School. Mr. Carlock has been extensively featured in media such as Fox Business News, and The New York Times, and writes a regular monthly column for National Real Estate Investor. Byron was also named by D Magazine as one of the D500 most influential businessmen in Dallas.

Francis P. LivelyPast ChairmanFrank Lively is Executive Vice President, responsible for determining the policies and strategic

direction of Wafra Investment Advisory Group Inc.’s Real Estate

Division. Wafra is the US investment arm of the Public Institution for Social Security, the $105 billion dollar social security trust fund for the State of Kuwait. Wafra manages over $17 billion in assets. Mr. Lively’s experience in the real estate industry spans over thirty‐five years and includes development, financing, management, consulting/ advisory, accounting, auditing, and brokerage. During his career, he has directed investments and dispositions of assets with an aggregate value in excess of $5 billion. In 1990, Mr. Lively established Lively & Associates, a full service real estate firm. He remained as president of the firm for seven years before it was acquired by Wafra in 1997. Mr. Lively holds a Master’s Degree in Real Estate Finance and Development from New York University and a Bachelor’s of Science in Accounting from Manhattan College. He is currently a full member of the Urban Land Institute, and an Executive Board Member and former Chairman of AFIRE (Association of Foreign Investors in Real Estate), an international investor association. Mr. Lively is also a licensed Real Estate Broker in the State of New York, full member of the Urban Land Institute, and a member in the International Council of Shopping Centers. He has written numerous articles regarding real estate and related subjects, and frequently participates on panels and in conferences on a wide range of real estate topics. ★


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Changes in what’s expected of the workplace, declining requirements for space-per-person, questions as to taxation, regulation, and higher interest rates, the implications of a more protectionist and isolated political stance made for interesting conversation at AFIRE’s 2017 winter meeting.

“The biggest worry, I have,” said keynote speaker Richard W. Fisher, former chief executive officer, Federal Reserve Bank of Dallas, “is the withdrawal of the US, rather than the improvement of world order. We have an obligation to be exemplary and update the postwar structure in light of the failure of Russia, the rise of China, and changes in the cyber revolutions. This will require delicate diplomacy or else it will result in protectionism and isolationism.

“It will take a clever hand to update our relationship with Mexico,” he said, calling it one of the best-performing economies in the western hemisphere. “We need to update our relationship and not destroy it …

establish the correct commitments without upsetting the applecart.”

And while Fisher raised the potential for a more robust economy under a less burdensome regulatory environment, he also raised the specter of higher interest rates. He said President Trump’s first priority would be tax cuts, but suggested they not exceed 25%. He forecast Trump’s next priorities as “going after regulations like a dog after a truck,” and finally reshaping the Supreme Court.

Throughout the conference, panelists and members, themselves, expressed a growing sense of caution. In summarizing the 2017 AFIRE survey, completed before the election, Joe Walsh reported that 85% of those responding felt a Trump election would have a negative effect on the USA, with more than 1/3 expecting a strongly negative effect. While the majority of those casting a vote at the meeting said their perception of the real estate market had not changed since the survey

2017 Winter Conference: Navigating Uncharted and Murky Waters

The Reinvented Office Panel: Lenny Beaudoin, CBRE Workplace Strategies; Andrew Garnar-Wortzel, Gensler; Julia Goldberg, RGA ; Justin Mardex, JP Morgan Chase & Co.; and Willem VanDooijeweert, PricewaterhouseCoopers

— Kathryn Hamilton, Hamilton Ink

THE FULL 2017 WINTER CONFERENCE KEYNOTE ADDRESS BY RICHARD FISHER CAN BE FOUND ON PAGE 13


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was completed, slightly more attendees (about 30%) said they felt more pessimistic while some 20% said they felt optimistic. Approximately half said they had a higher expectation of a downturn than they had at the time of the survey. Nonetheless, the survey once again underscored the ability of the US to offer the safest and most secure real estate investment and to provide the best opportunity for capital appreciation.

Flush Capital Markets Searching for Product

During panels on both capital markets and pension funds, several themes repeated. Money is available with bank liquidity at an all-time high. “Since 2010, pension funds’ allocation to real estate has doubled,” said Chris McGibbon of TIAA Global Real Estate. “In the last five-to-ten years, real estate has matured as an asset class and has been accepted institutionally,” said Eric Lang of Teacher Retirement Systems of Texas.

If there is a challenge for pension funds, especially, it is meeting allocations. “There is a different mix, but no drop-off,” added Soultana Reigle, managing director of PGIM Real Estate, “the hesitation is in being able to spend it.” However, despite modest construction rates estimated at 1.4% (compared to 3% in 2007), new construction funding remains elusive, and few panelists expressed an interest in building new.

Nor is there one philosophy of where or what to

buy. While panelists described most portfolios as being domestically weighted, everyone spoke of international forays, and several expressed an interest in currency fluctuation, while others are looking more closely at capital structures. “Diversification is the primary draw to ‘international,” said Shaw Veldhouse of the NY State Retirement Fund. “I believe in the growth of emerging markets, but outside of the US, I’m not interested in lower-return strategies,” said Eric Lang.

Property preferences were wide, with targets including: industrial (categorized as the ‘belle of the ball,” by Soultana Riegel), the “right retail,” workforce housing in secondary and tertiary markets and currency hedges. Panelists stressed the importance of long-term strategies

“that anticipate rather than predict” the market, according to John Kukral of Northwood Investors.

Perhaps in deference to this being the seventh year of the current cycle, Odyssey-type funds are out, core is being redefined as “fully-valued,” and return-on-cash is feeling even more attractive.

The Agile Office“Corporate relocation is a process improvement

strategy,” said Justin Mardex of JP Morgan, Chase & Co. “Today, the workplace is changing from task-oriented to knowledge-based work. Companies are competing for talent so they can offer their own clients the best products and services,” added Willem VanDooijeweert of

Joe Walsh, Graaskamp Center for Real Estate and Urban Land Economics, Wisconsin School of Business

Michael Casey, Senior Advisor, Digital Currency Initiative at MIT Media Lab


2017 | Issue 1

PricewaterhouseCoopers.As the nature of work is changing, so is the way

it is done. Agile development theory, modeled after software development, is the new mantra. (JP Morgan Chase expects to be 80% agile by 2020.) Agility is

supported through co-working and many companies are “rebranding themselves to deliver a better experience to millennials.” (At PwC Millennials comprise 80% of the workforce.)

There is also a bottom line effect. Julia Goldberg of RGA, a NYC digital agency, said office design for her was predicated on the “Three Rs’” – recruitment, retention, and revenue.” She described RGA’s new offices, opened a year ago, as a merging of environment and data, and called the building “a social network.” In an industry with notoriously high turnover, she said RGA’s retention rate increased by 7%.She also said she is willing to pay a premium of 10% to 20% to get a better, more efficient floor plan and a better work experience. “For the millennial workforce this is defined as the surrounding neighborhood, the sense of community you feel when you walk out the door,” she said. I would not pay a premium for a building if the

experience outside the door didn’t meet the millennial ex-pectation.” “The overall experience of a B building in the right location for employees would trump an A building in a lackluster location.In achieving her goals for space, Ms. Goldberg said the biggest “non-starter” was a landlord who would not work with her to achieve what she needed, whether that was a

raised floor, a bike rack, or a repositioning of the building to improve the overall employee experience.If those attending the conference did not find the real estate or political waters murky enough there was plenty to challenge them with the idea of Bitcoin and the ques-tions of whether or not it will do away with our financial institutions as money gets deposited and transactions recorded in cyberspace. But in a final analysis, the nerves of all participants could be soothed by one of the closing comments of the conference’s first speaker, Mr. Fisher:

“Long-term investors can remain confident that the US remains the single-best place on the planet in which to invest.” ★

When in Rome Panel: Max Swango, Invesco Real Estate; Eric Lang, Teacher Retirement System of Texas; Judy McMahan, UPS Group Trust; Shawn Veldhouse, New York State Common Retirement Fund Navigating a Sea of Capital Panel: Chris McGibbon, TIAA Global

Real Estate; Mark Gibson, HFF, Inc.; Diana Reid, PNC Real Estate; Soultana Reigle, PGIM

Kathryn B. Hamilton is a writer and marketing communications specialist

living in Raleigh, NC. She specializes in real estate and the built

environment.


2017 | Issue 1

Thank you Cathy [Pfeiffenberger]. I am honored that you and Jim [Fetgatter] asked me to open this important conference on “Strategies for Uncharted Waters.” You could not have picked a more appropriate title for the times in which we live, for we are definitely sailing in uncharted political and financial waters.

“You Look Like I Need a Drink!”

The political scene has changed enormously since October 31, when I received the invitation from Jim to speak to you today. Then, it was a given that Hillary Clinton would become the 45th president of the United States and that fiscal, regula-tory and government policy would follow conventional form. In what was a frightful shock to some (but not to this speaker), Donald Trump was elected and, were it not suddenly

inappropriate to draw the analogy, has been more active than a Mexican jumping bean in setting about to change the direction of the federal government. This has engendered enormous angst among those who had banked on business as usual and great hope among those who worried that the magnificent machine that is the US economy was in secular decline.

The former group, those accustomed to the intoxicating ambrosia of the status quo, regard President Trump with a reaction not unlike that of country singer Justin Moore’s title song “You look like I need a drink!”

The “Orange Swan” and “Half-wits”

The latter, especially sober busi-ness leaders, financiers and market operators, have turned the term

“Black Swan” on its head: they look at the President’s agenda, however frenetic it may be, of deregulation, pledges of tax cuts and reform, his cabinet appointments and Supreme Court nominee, and his general dis-position toward curbing the intrusion of government on freedom of the “animal spirits” and see an “Orange Swan”-- a welcome surprise to the upside.

I’ll put this in perspective with my favorite story told by Ronald Reagan. During the 1984 presidential campaign, President Reagan came to Dallas. My then father-in-law, the great Republican Congress-man Jim Collins, a close friend of the President, let me join him for a small gathering with the President at the Collins’ ranch. Reagan told us a story of an Irish farmer named Paddy O’Toole who is visited by an Inspector from the Welfare and Work Security Ministry.

Richard W. Fisher, President and Chief Executive Officer, Federal Reserve Bank of Dallas (2005-2015) being interviewed by Leonard O’Donnell, President and Chief Executive Officer, USAA Real Estate

“You Look Like I Need A Drink...”—Comments by Richard Fisher at the AFIRE 2017 Winter Conference


2017 | Issue 1

“Tell me, Paddy,” the official asked, “how do you compensate your workers?”

“Well,” says Paddy, “I pay the field workers 300 a month plus room and board and an annual bonus based on our profits.”

“Ah, Paddy! Good man! That’s way above minimum wage and very gen-erous. Excellent!” says the bureaucrat. “And your processors?”

“I pay them 600 monthly and also provide them room and board plus a slice of profits.”

“Brilliant! That’s way above the norm too,” says the Inspector. “Are there any others?”

“Oh yes,” says Paddy. “There is the half-wit. He works the longest hours of all, shoulders all of the farm’s liabilities and risks, clears about 30 a month, gets a fifth of whiskey a fort-night, and gets to sleep with me wife on the weekends if he is up to it.”

“Paddy, that is outrageous!” says the Inspector. “It is completely unacceptable. It violates every rule, regulation and law. I demand to see the ‘half-wit’ immediately!”

“Laddy,” Paddy replies, “You’re lookin’ at ‘im.”

One could say that the “half-wits” that the elites tend to look down upon revolted in the last election against taxes that strip them of what they earn by the sweat of their brow and the strength of their back, regulations that dictate their behav-ior where they work and live, study, worship and tend to their medical needs, and monetary policy that has crippled their savings and spending power, policy which I will turn to shortly.

Small wonder that this past election represented a political cross roads and that change agents ran the table not just in the Electoral College but in the lower and upper houses of

Congress, governors mansions and state legislatures, 27 state attorneys general offices, and a majority of counties across the land. The choice was between a candidate who advo-cated more of the same and one who offered to provide relief by changing gears entirely, however great the risk.

Risks to ConsiderTo be sure, there are indeed great

risks. I won’t reiterate them here with the exception of saying that one that ranks at the top of my worry list is that of withdrawing from, rather than improving the present world order.

I am ardent believer in American exceptionalism. I believe the US is indeed a uniquely successful exper-iment and that we have been an ex-ample to the world, which means we have an obligation to continue being exemplary. I believe there is a need to update almost all of the post-WWII structures, ranging from the Bretton Woods institutions, the UN, NATO and other strategic pacts, multilateral and bilateral, which we have led, and

trade agreements like NAFTA , which I spent four years implementing as Deputy US Trade Representative. We need to take into account of the changes that have occurred since the fall of the Soviet Union, the rise of China, the growing nuclear threat of North Korea, the information-tech-nology and cyber revolution, and other phenomena that have changed the global economy and the practice of politics and diplomacy, including ubiquitous social media and even Saturday Night Live.

But making needed changes will require delicate diplomacy, lest we unleash the destructive ghosts of isolationism and protectionism. Let us hope that the new Administra-tion and the Congress will guide us through much-overdue changes with aplomb rather than bombast.

Mexico ReduxI have special concern with the

delicate subject of Mexico, a nation of 120 million people whose govern-ment has delivered one of the best performing economies in our hemi-sphere, is our nation’s second largest trading partner, and which shares, by far, the most important trading relationship with the most prosper-ous state in the union, my home state of Texas. It will take a clever hand to update our relationship with Mexico without destroying it and giving rise to a US equivalent of Europe having Turkey on its southern border.

By the way, I assume you have all heard the quip: “Of course a Wall works. China built one and they haven’t seen a Mexican in over 2,000 years!”

All humor aside, pray that the new leadership corrects whatever imbalances exist in US global com-mitments without overturning the apple cart.

I am ardent believer in American

exceptionalism. I believe the US is

indeed a uniquely successful

experiment and that we have been an example to the

world, which means we have an obligation

to continue being exemplary.


2017 | Issue 1

Churchill’s DictumMy last comment on this front be-

fore turning to the challenge of pres-ent financial markets and monetary policy: should you be tempted to give in to all engrossing angst over the change agent that has been elected to lead the American people, remember Churchill’s insightful dictum: “Ameri-cans always do the right thing… after they have tried everything else.”

Monetary Policy: The Good and the Bad

Now to the economy and markets. As president and CEO of the Federal Reserve Bank of Dallas, I participated in Federal Open Market Committee (FOMC) deliberations from 2005 to 2015. Recall that despite my con-cerns and dissents, the FOMC cut overnight rates to zero and through Quantitative Easing, expanded the holdings of the Fed’s balance sheet from less than $900 billion when I joined to almost $4.5 trillion pres-ently, increasing the duration of the holdings in the portfolio to six years from what was typically the shortest of tenors.

The reason for doing so was to create what Ben Bernanke summa-rized as a “wealth effect” that would lift financial markets to the benefit of the economy. When you cut rates to the “zero bound”, then flatten the yield curve by purchasing trillions of dollars of mortgage backed and US Treasury securities, you are signaling to investors that they can literally discount future cash flows of the assets they invest in to infinity. And sure enough, with the FOMC hav-ing bought in $1.75 trillion worth by the end of February 2009, the equity market turned the first week of March and cap rates for properties began to plummet.

That was all to the good for inves-tors in bonds, stocks, and property, including housing as mortgage rates declined. But the wealth effect the FOMC hoped for did not spread as planned to the broader economy. Savers were penalized as bank deposit and money market fund returns were decimated, and confidence in vehicles that ordinary Americans depend upon-- pension funds, insurance companies and other vehicles used to protect their financial wherewithal in the long term-- was undermined. Thus it took longer to restore confi-dence among consumers than mon-etary policy makers thought. Espe-cially as fiscal policy and regulatory reform was dead in the water. With no encouragement from the fiscal and regulatory side, companies used cheaper and more plentiful money to restructure their balance sheets, buy in shares and increase dividend pay-outs, rather than commit to job cre-ating capital expenditures (CAPEX). Employment, and the consumption that having a job allows, took longer to ramp up than we had hoped.

Accommodative policy is neces-sary but not sufficient to get the en-gine of the economy to full function. Money is the fuel for that engine but fiscal and regulatory policy is needed to incent the economy’s drivers--pri-vate sector operators-- to use that money and step on the accelerator of CAPEX and job creation to get that engine roaring.

The Fed’s policy was followed and intensified in spades by the Bank of Japan and by the European Central Bank.

The Fed curtailed its QE program at the end of October of 2014, then waited seven years to the day to raise overnight rates by a mere 25 basis points. When all was said and done, as I stand here today, the FOMC had acquired and now holds $1.74 trillion

in mortgage-backed securities and $2.46 trillion in Treasuries, roughly 35% of all US Treasuries outstanding with greater than five years’ maturity, in its System Open Market Account (SOMA).

The Bank of Japan, the ECB, and the Bank of England, however, carried on with their programs of radical monetary policy, with the result that after the Brexit vote took place, interest rates hit lows the likes of which have never been seen. The only reliable long- term records we have on sovereign bonds are main-tained by the Dutch, the founders of this very Association. (Holland preceded England and the US as the globe’s financial epicenter). In the immediate aftermath of Brexit, 10-year Dutch sovereigns reached their lowest yield level in 500 years. The Bank of England’s benchmark rate hit its lowest level in 322 years. And the benchmark 10 year US Treasury traded at 1.366%, the lowest rate since Hamilton-- not the musical but the real guy, the iconic first Secretary of the Treasury.

And as we all know, there was a plethora of long term issuance in the UK and in Europe and in Japan at negative or barely positive interest rates.

Then, as autumn approached, the markets seemed to gag on the low-to-negative interest rate diet pre-scribed by central banks. Here in the US rates began to rise. By the time of the presidential election, the 10-year Treasury had risen to 1.8%; in Europe negative yields at longer tenors began to evaporate.

The Tug of War Between Rising Rates and the “Orange Swan”

Since the election, rates have risen further. Today the 10-year Treasury is


2017 | Issue 1

trading at roughly 2.4% and has been bumping its head on the 2.5% level. One would have thought that under-lying cash flows that support equities and cap rates would have been redis-counted to reflect this move. But that has not yet happened.

I attribute this to the “Orange Swan.” The hope President Trump has engendered of tax reform, de-regulation and a more pro-business government has over-ridden what

might ordinarily have been a reversal of force in markets outside the fixed income space.

We have seen this before. Between when Ronald Reagan was elected and then inaugurated, the S&P 500 soared 8.5%. But in his first year in office, equities declined 20% as reality set in on the timetable for implementing the changes he promised. It wasn’t until mid-way through his second term in office, for example, that he was able to get tax reform in place.

To be sure, the political dynamics are different today. In his first term, Reagan had to deal with a Demo-cratic majority in the House, where tax reform must be executed. Today, Trump has a sizable Republican

majority in the House and a marginal majority in the Senate-- but still one where the Vice-President can cast a deciding vote as he did yesterday in confirming Ms. DeVos as Edu-cation Secretary. That said, despite the power of the Executive to issue unilateral orders, tax and regulatory reform requires the Congress. How-ever, pro-business President Trump’s intentions, and even with a Republi-can Congress has long been prepared to effect change, major initiatives take time. We will see how long the “Orange Swan” effect holds under the circumstances and can counter the reality that a more robust economy, should it materialize as hoped, will result in higher interest rates and a Federal Reserve that will have to tighten monetary policy both at the short end and possibly along the yield curve as it deals with the rollover of maturing MBS and Treasuries in its portfolio where $195 billion mature this year, $423 billion mature in 2018, and $430 billion mature in 2019.

How markets will re-discount fu-ture cash flows under those circum-stances remains uncertain.

Remembering Marcus Nadler

We are indeed in “Uncharted Waters.” But I don’t want you to leave today thinking I am just one more former central banking sourpuss. I do see the potential for market and political storms. Members of AFIRE will have to be alert and stay on the balls of their feet as the landscape in the United States shifts and is tested. But I remind you that Churchill was right: we Americans eventually do the right thing. The US has the capac-ity to overcome even the greatest of reversals and mishaps and obstacles. We always have and we always will.

I doubt any of you have ever heard of Marcus Nadler. He was a leading

thinker at the Federal Reserve during one of our toughest “stress tests”, the Great Depression. With gloom all around and the most thoughtful of people questioning the very surviv-ability of our form of democracy, Nadler put forth four simple propo-sitions:

First, he said, “You are right if you bet that the US economy will contin-ue to expand.”

Second: “You are wrong if you bet that it is going to stand still or collapse.”

Third: “You are wrong if you bet that one element in our society is going to ruin or wreck the country.”

And fourth: “You are right if you bet that (leaders) in business, labor and government are sane, reasonably informed and decent people who can be counted on to find common ground among all their conflicting interests and work out a compromise solution to the big issues that con-front them.”

I know Nadler’s third and fourth propositions may seem pie-eyed at present. They were equally outland-ish in the 1930’s. And yet we went on from there to become the most prosperous and powerful country in the world.

We might be experiencing polit-ical volatility. We may be poised for a financial markets correction. But Americans are a unique people. We screw things up pretty badly, pretty often. But we eventually do the right thing. We have no choice now but to do it again.

Long-term investors in the United States, like the members of AFIRE, can be confident in our ability to re-main the best place on earth to invest your hard earned money.

Thank you. Now, I will hew to central bank tradition and do my best to avoid answering your questions. ★

Churchill was right: we Americans

eventually do the right thing. The US has the capacity to overcome even the

greatest of reversals and mishaps and

obstacles. We always have and we

always will.


2017 | Issue 1

AFIRE 2017 Winter Conference

Ali Alghannam, Oqyana Real Estate Company; Jim Fetgatter, AFIRE; and Abdulaziz Al-Marzooq, KFH Capital Investment Company

Eberhard Maier, Bayerische Landesbank; Michael Chen, Madison International Realty; Shawn Veldhouse, New York State Common Retirement Fund; Elaine Wong, CIM Group; and Cord Ernst, Wafra Investment Advisory Group, Inc.

Luigi Lippi, Morguard Investment Limited; Steve Taylor, Healthcare of Ontario Pension Plan (HOOPP); Angela Sahi, Morguard Investment Limited; and John Bottomley, Berkshire Group

Catherine Pfeiffenberger, Skanska USA Commercial Development Inc., and Richard W. Fisher, President and Chief Executive Officer, Federal Reserve Bank of Dallas (2005-2015)

Martin Lamb, Credit Suisse; Driss Oualkadi, Deka Immobilien GmbH; Markus Zoppa, Deka Immobilien GmbH; and Rafael Metternich, Credit Suisse


2017 | Issue 1

Rob Hielscher, JLL; Tal Peri, Union Investment Real Estate GmbH; Martin Lamb, Credit Suisse; and Matthew Scholl, Union Investment Real Estate GmbH

Michael Phillips, Jamestown LP; Shawn Hurley, Skanska USA Commercial Development Inc.; Catherine Pfeiffenberger, Skanska USA Commercial Development Inc.; and Chris Kahl, Jamestown US-Immobilien GmbH

Don Wise, Metzler Real Estate; Steve Franceschina, Metzler Real Estate; and Matt Bronfman, Jamestown

Stephen Tross, Bouwinvest REIM; Nils Kok, GeoPlay; and Will McIntosh, USAA Real Estate Company

AFIRE 2017 Winter Conference

MORE PHOTOS OF THE WINTER CONFERENCE ARE AVAILABLE ON THE WEBSITE AT WWW.AFIRE.ORG/EVENTPHOTOS


2017 | Issue 1

Asaf Rosenheim, Profimex Ltd.; Tal Peri, Union Investment Real Estate GmbH; and Janice Stanton, Cushman & Wakefield Inc.

Len Crann, Landesbank Baden-Wuerttemberg (LBBW); and Juergen Gerber, Jamestown

John Duffy, JLL; Chris Hughes, Hines; and Wilfried Witthuhn, King & Spalding LLP

Martin Bruehl, Union Investment Real Estate GmbH, and Matthew Scholl, Union Investment Real Estate GmbH

AFIRE 2017 Brunch at MIPIM

Christoph Donner, Allianz Real Estate of America LLC; Alexander Joerg, Landesbank Baden-Wuerttemberg (LBBW); and Jeroen Verheijden, Clarion Partners


2017 | Issue 1

AFIRE 2017 Brunch at MIPIM

Martina Malone, Prologis Private Capital UK Limited; and Philippe Pronost, CDC International Capital

Mohammed Ali, Kuwait Investment Authority; and Manjul Ramchandani, Greenhill & Co Int LLP

Julian Josephs, Georgetown University; and David Jackson, M & G Real Estate Limited

Jaime Fink, HFF; Markus Zoppa, Claus Becher, Deka

MORE PHOTOS OF THE MIPIM BRUNCH ARE AVAILABLE ON THE WEBSITE AT WWW.AFIRE.ORG/EVENTPHOTOS


2017 | Issue 1

2016 Year in Review: Activity Dips, Prices Climb—Real Capital Analytics’ US Capital Trends, January 27th | By Jim Costello

©2017 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed or warranted; subject to future revision.

In This Issue: We look at acquisition patterns among buyer types in 2016 and detail cross-border buying trends in the U.S. We comment on the prospects for pricing and analyze volume and pricing trends in January.

US CAPITAL TRENDS | THE BIG PICTURECommercial property deal volume fell 47% YOY in January. This movement is the sharpest monthly decline since the depths of the downturn in 2009. It would be a grave mistake to assume that 2017 is like 2009, however. Unlike that year, pricing now is generally holding steady.

9.0%

Off Ret Ind Apt Htl

Monthly Transaction Volume

$26.3b-47%

Deal volume can fall as the expectations of buyers and sellers diverge. These volume swings can be the mechanism to adjust to higher interest rates rather than a rise in cap rates and declining prices. In some respects, this sort of divergence in expectations, which we noted in RCA Insights at the end of Q1’16, may have been at play in the market in January.

The apartment sector illustrates the resilience of pricing. This sector had seen growing deal volume throughout 2016, even with a pullback in investment for other property sectors. Into January though, apartment volume fell 63% YOY, with overall investment volume for the month significantly lower than that for the office sector. Despite this pullback in activity, apartment cap rates fell 10 bps from the levels set in December.

Unless and until current owners of assets are forced to sell, prices need not bear the pain of adjustment to higher interest rates. Deal volume may continue to be challenged until the expectations of buyers and sellers converge once more. Later in this report, we explore the issues of growing economic uncertainty which may be hindering this convergence.

Deal volume for single asset sales was down 31% YOY in January on volume of $21.0b. For portfolio and entity-level transactions the drop was sharper: down 72% YOY on sales of $5.3b. These actual sale levels are not that bad, and reminiscent of the activity seen in Jan’13 and Jan’14; remember, Jan’16 was the strongest on record. The sharp decline in overall volume may not be just a price reaction but also simply a sign of deal volume returning to “normal” levels.

Year-Over-Year Change

Jan’17 transaction volume

Jan’17 YOY volume change

Cap Rates

3-mth trailing cap rates, except hotel and industrial 12-mth trailing

0

10

20

30

40

50

60

70

80$b

-50%

0%

50%

100%

5.0%

6.0%

7.0%

8.0%

9.0%

'12 '13 '14 '15 '16 '17

Off Ret Ind Apt Htl


2017 | Issue 1

Buyer Composition 2016

The composition of buyers in 2016 looks much like that seen in 2014 in some respects. The surge of portfolio and entity-level transactions seen in 2015 was fueled by cross-border investors, which in turn drove their share of the market up to 18%. In 2016, this share fell to 14%.

Still, at 14% of the market, cross-border investors are now more of a presence in property acquisitions than are REITs. This difference between these two classes of investors is one area where there is an interesting divergence from 2014. REITs captured only 8% of the market in 2016, down from a 15% share in 2014.

Private investors remain the largest source of capital in the market, capturing a 47% share of all activity. These investors completed the majority of the deals in the retail, apartment, and development site markets in 2016. On average, this class of investor did complete smaller deals, with an average $11.3m per transaction.

Institutional/fund managers, by contrast, completed deals with an average size of $37.1m. This class of investors captured a smaller share of the market than did the private buyers: only 27% of the market. Despite higher sticker prices for the institutional-quality deals, the market for big ticket deals can be a smaller one than that for the assets with lower sticker prices.

While REITs have lost ground relative to other classes of investors, they are like the institutional/fund managers in the sense of their net acquisitions. These were the two groups which tended to provide assets to the market in 2016. The REITs sold quite a lot more, with their dispositions 70% higher than their acquisitions. The institutional/fund managers, by contrast, only sold 8% more than they bought in the year.

User/Other Private Listed/REITs Institutional/Fund Cross-Border

2016 Buyer Composition: All Property Types

2016 Buyer Composition

By Property Type

By Market Tier

Individual vs Portfolio

Past Five Years

2016 By Property Type

2016 By Market Size

2016 Individual vs Portfolio

12%

9%

47%

41%

44%

40%

40%

31%

45%

51%

61%

40%

53%

40%

50%

60%

55%

24%

8%

10%

15%

18%

13%

10%

10%

15%

27%

27%

26%

25%

31%

32%

27%

27%

25%

15%

16%

29%

28%

16%

23%

38%

14%

18%

10%

12%

10%

22%

8%

36%

15%

19%

12%

20%

2016

2015

2014

2013

2012

Office

Industrial

Retail

Apartment

Hotel

Dev Site

Major Metro

Secondary

Tertiary

Individual

Portfolio

2016 By Property Type

2016 By Market Tier

2016 Individual

Total Acq ($m) YOY Chg Avg Size ($m)Cross-Border 65,885 -34% 44.4Institutional/Fund 128,499 -12% 37.1Listed/REIT 39,819 -28% 28.1Private 225,685 3% 11.3User/Other 21,804 8% 11.3Grand Total 491,740 -10% 16.7



2017 | Issue 1

Cross-border investment activity into the U.S. fell in 2016, with deals involving overseas investors dropping 34% YOY on volume of $65.9b.

It was not a story that cross-border investors pulled away from the U.S. market overall, it was the case that activity for the market overall was declining as investors grappled with high prices and an uncertain macroeconomic environment. The U.S. commercial property investment market fell 10% YOY in 2016.

Clearly cross-border investors pulled back more than did domestic investors; though, in part, this disparity is a function of deal structures. Portfolio and entity-level transactions were down 30% in the U.S. in 2016 and these megadeals accounted for nearly 40% of the deals in which cross-border investors were involved.

Deal activity did pull back more from some regions of the world than in others. Among major sources of capital coming to the U.S., transactions involving Canadian investors dropped 44% YOY on volume of $11.6b and deal activity from Europe was down 42% YOY on volume of $15.1b. Despite these pullbacks, the levels of activity by both groups of investors are more than 20% above their pace set over the previous decade.

Investors out of the Middle East drew back in 2016, with volume down 28% YOY. Still, activity from some countries was up sharply. Israeli investors posted 40% YOY growth in volume bringing their investment activity back in line with the pace they had set over the last decade. Investors out of Saudi Arabia and Kuwait came back to U.S. investments with nearly exponential growth. Still, growth rates for these two countries were a story of a small number growing quickly, with involvement in deals totaling only $3.2b in 2016.

The biggest jump over the last decade by region came from Asia, with deal activity 183% above the trend. Chinese investors, while often in the spotlight, are one of many sets of investors coming to the U.S. from Asia. South Korean investors were active with 26% YOY growth, Hong Kong investors posted 31% YOY growth, and the Japanese are back with 58% YOY growth.

The Asian country that pulled back significantly in the year was Singapore, with activity down 78% YOY. Deal activity is down in part because of the massive GIC/GLP acquisitions in the industrial sector of the U.S. in 2015.

Sources of Cross-Border Capital

*In deals with JV buyers from different countries, full credit for the deal is given to each country.

Trailing 4-qtr volume

Direct Acquisitions by Cross-Border Investors

Rank Region Vol ($b) Chg vs '15 Chg vs 10yr Avg

1 Asia 28.72 Europe 15.13 Canada 11.64 Mid-East 9.35 Rest of World 1.2

>100%

23%

24%

50%

-65%

-13%

-42%

-44%

-28%

-82%

Rank Country Vol ($b)* Chg vs '15 Chg vs 10yr Avg

1 China 15.42 Canada 13.13 Germany 6.24 South Korea 4.25 Singapore 3.36 Switzerland 3.37 Qatar 3.28 U.K. 3.29 Hong Kong 3.110 Japan 2.611 Israel 2.512 Saudi Arabia 1.913 France 1.414 Kuwait 1.215 Spain 1.1

>100%

25%

>100%

>100%

34%

97%

>100%

-10%

>100%

92%

0%

>100%

>100%

27%

>100%

3%

-54%

-14%

26%

-78%

2%

-31%

23%

31%

58%

40%

>100%

>100%

>100%

-6%

Rank Region Vol ($b) Chg vs '15 Chg vs 10yr Avg

1 Asia 28.72 Europe 15.13 Canada 11.64 Mid-East 9.35 Rest of World 1.2

>100%

23%

24%

50%

-65%

-13%

-42%

-44%

-28%

-82%

Rank Country Vol ($b)* Chg vs '15 Chg vs 10yr Avg

1 China 15.42 Canada 13.13 Germany 6.24 South Korea 4.25 Singapore 3.36 Switzerland 3.37 Qatar 3.28 U.K. 3.29 Hong Kong 3.110 Japan 2.611 Israel 2.512 Saudi Arabia 1.913 France 1.414 Kuwait 1.215 Spain 1.1

>100%

25%

>100%

>100%

34%

97%

>100%

-10%

>100%

92%

0%

>100%

>100%

27%

>100%

3%

-54%

-14%

26%

-78%

2%

-31%

23%

31%

58%

40%

>100%

>100%

>100%

-6%

Sources of Foreign Investment in the US - 2016


2017 | Issue 1

Looking at property sectors, the industrial sector experienced the sharpest pullback in deal volume involving cross-border investors in 2016. This pullback for industrial was not just a story of the GIC/GLP deals in 2015 and the market not replicating that activity, but also the activity from Norway and the acquisition of KTR Capital by Norges Bank (NBIM) in 2015. Again, without those megadeals in 2016, deal activity fell.

The two property sectors which did see growing cross-border investment in 2016 were the office and hotel sectors. The office sector was up 4% YOY on volume of $31.5b while hotels were up 49% YOY on volume of 12.9b. Activity for both sectors was above the ten-year trend for this activity.

Cross-border investors were particularly active in the hotel sector in 2016, capturing 36% of the hotel market. Chinese buyers were in the lead for cross-border hotel acquisitions thanks mostly to megadeals by Anbang Insurance and China Life Insurance. Canadian buyers came in at a distant second place but had a more diverse pool of buyers.

The largest market destinations for cross-border capital in 2016 were generally the 6 Major Metros (6MM). This said, Boston, one of the 6MM, ranked only at #11 for cross-border deal volume and 2016 volume was down 52% YOY. Despite falling activity, most markets saw cross-border activity well above the long-run trend but in Boston volume was only 6% above the ten-year average.

San Francisco and Phoenix were notable markets among the top ten markets for cross-border capital in that each posted growth in this sort of investment in 2016. Growth in San Francisco was aided by the exposure to the Blackstone Strategic Resorts portfolio, with three of the 15 assets located in this market.

Overall, there were 16 markets where cross-border capital came in at deal volumes above $1b in 2016. So, even though cross-border activity was down for the year, activity was still high across a number of markets.

Targets of Cross-Border Capital

Rank Prop Type Vol ($b) Chg vs '15 Chg vs 10yr Avg

1 Office 31.52 Hotel 12.93 Apartment 9.44 Retail 6.15 Industrial 3.56 Dev Site 2.6

4%

49%

-52%

-36%

-87%

-41%

94%

>100%

18%

12%

-22%

25%

Rank Market Vol ($m) Chg vs '15 Chg vs 10yr Avg1 Manhattan 16,0982 Los Angeles 4,6193 San Francisco 4,4584 Chicago 2,7185 DC 2,5196 Dallas 2,2957 Seattle 2,0588 Atlanta 2,0019 Phoenix 1,848

10 Miami/Dade 1,82811 Boston 1,79712 Orange Co 1,26013 Honolulu 1,22714 Philadelphia 1,12715 San Jose 1,04216 No NJ 1,00317 Austin 93118 All Others SE 83619 Tampa 78520 Denver 76021 San Diego 75022 DC VA burbs 69123 Charlotte 65324 Minneapolis 60525 Westchester 58726 East Bay 53127 All Others SW 50328 All Others W 50329 DC MD burbs 45630 Orlando 402

-42%

-4%

28%

-39%

-32%

-33%

-27%

-45%

3%

-22%

-52%

15%

-30%

>100%

8%

-42%

-30%

>100%

59%

-23%

-53%

-50%

13%

>100%

>100%

-58%

-1%

>100%

-45%

-48%

62%

69%

>100%

56%

45%

>100%

>100%

80%

>100%

92%

6%

>100%

>100%

>100%

59%

81%

68%

>100%

>100%

58%

41%

-26%

>100%

>100%

>100%

8%

90%

>100%

42%

15%

Rank Prop Type Vol ($b) Chg vs '15 Chg vs 10yr Avg

1 Office 31.5 2 Hotel 12.9 3 Apartment 9.4 4 Retail 6.1 5 Industrial 3.5 6 Dev Site 2.6

4%

49%

-52%

-36%

-87%

-41%

94%

>100%

18%

12%

-22%

25%

Rank Market Vol ($m) Chg vs '15 Chg vs 10yr Avg1 Manhattan 16,0982 Los Angeles 4,6193 San Francisco 4,4584 Chicago 2,7185 DC 2,5196 Dallas 2,2957 Seattle 2,0588 Atlanta 2,0019 Phoenix 1,848

10 Miami/Dade 1,82811 Boston 1,79712 Orange Co 1,26013 Honolulu 1,22714 Philadelphia 1,12715 San Jose 1,04216 No NJ 1,00317 Austin 93118 All Others SE 83619 Tampa 78520 Denver 76021 San Diego 75022 DC VA burbs 69123 Charlotte 65324 Minneapolis 60525 Westchester 58726 East Bay 53127 All Others SW 50328 All Others W 50329 DC MD burbs 45630 Orlando 402

-42%

-4%

28%

-39%

-32%

-33%

-27%

-45%

3%

-22%

-52%

15%

-30%

>100%

8%

-42%

-30%

>100%

59%

-23%

-53%

-50%

13%

>100%

>100%

-58%

-1%

>100%

-45%

-48%

62%

69%

>100%

56%

45%

>100%

>100%

80%

>100%

92%

6%

>100%

>100%

>100%

59%

81%

68%

>100%

>100%

58%

41%

-26%

>100%

>100%

>100%

8%

90%

>100%

42%

15%



2017 | Issue 1

Commercial real estate investors like to understand the rules of the game before jumping into a transaction. Given the policy uncertainty following the U.S. election, the falling deal volume in January should not be a surprise. These investments are long-lived, after all, and changes in rules around taxation or depreciation, for instance, can have many unexpected impacts on investment performance – both good and bad.

An index published by the Federal Reserve tries to measure the uncertainty around discussions on the future of monetary, regulatory and fiscal policies. Except for recessions and their aftermath, deal volume tends to grow the fastest when uncertainty is low.

Despite this uncertainty, prices are still growing and cap rates trended down in January. Few expect, however, that cap rates will push much lower given the way the 10yr UST has increased since November. Can prices continue to grow at double-digit rates in the year ahead?

Decomposing our CPPI to growth in income from NCREIF versus growth in capital market forces, we see that changes are primarily driven by capital market forces. Shown here is the CPPI for CBD offices in the 6MM and most growth over time, and the recovery in prices into H2’16, was driven by capital market forces.

It would take significant growth in jobs and GDP to drive NOI up to a double-digit growth range – a range that has not been seen in the last 15 years. If cap rates face headwinds of higher interest rates, there is only one capital market force left which might drive pricing at the pace set in 2016 – aggressive lending.

In her testimony to Congress on Feb. 14 Fed Chair Janet Yellen noted that it is too early to determine the economic impacts of policy changes from the Trump administration. In the 55-page report accompanying her testimony, the one mention of commercial real estate expressed that regulators are watching lenders in the face of high prices.

Regulatory vigilance with respect to HVCRE loans has provided a dose of discipline for construction lending just as supply began to impact property income in key submarkets. If there is an end to regulatory vigilance from a repeal of Dodd-Frank, lending discipline might erode, which could boost capital market forces on pricing. To date, however, lenders have been disciplined.

Commentary: Prices Hold, but for How Long?

A key capital market force which should continue to support pricing into the year is the overall investor demand for real estate assets. The PREA Investment Intentions Survey for 2017 shows that real estate allocations for professional investors has increased for the year from 10% of AUM to 11.5%.

The market has been challenged with uncertainty following the election, yet pricing has held. Uncertainty has not yet been a sign to run to the exits. Rather, it has generated some investor caution, and volume – not prices – is likely to be somewhat volatile ahead as the rules of the game become clearer.

Sales Volume Declines With Growing Uncertainty

Capital Market Forces Drive Most of Price Growth

Source: Economic Policy Uncertainty, RCA

-100%

-50%

0%

50%

100%

150%

200%

0

50

100

150

200

250

300

'02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17

-40

-30

-20

-10

0

10

20

30

40

'02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

YOY % growth Income growth Capital change Price growth

-100%

-50%

0%

50%

100%

150%

200%

0

50

100

150

200

250

300

'02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17

Series3 Economic Uncertainty Index Volume growth

200%300

Recessions Economic Uncertainty Index Volume growth

200%300

Recessions Economic Policy Uncertainty Index Volume growth

Price growth is CPPI growth for CBD office in 6MM



2017 | Issue 1

The 3rd edition of the AFIRE Guide to US Real Estate Investing will be available soon in two formats:

A PAPERBACK BOOK AND A DIGITAL FLIPBOOK!

The AFIRE Guide is a primer on investing in real estate in the United States. It is an invaluable resource not only to those new to the US real estate market, but also to experienced investors for whom it serves as a ready resource, encompassing the spectrum of topics relevant to institutional investors with US commercial real estate portfolios. Written by some of the leading practitioners in the field, it acquaints the reader with the major issues and ensures the savvy foreign investor asks the right questions. We hope that the Guide proves to be an efficient and useful tool in your US real estate investment endeavors.

To order the AFIRE Guide go to www.afire.org, and click on the

Publications option.

Price for AFIRE Members- Paperback ...... $25- Flipbook ......... $15 (with access for 3 devices)

Price for Non-AFIRE Members- Paperback ...... $100- Flipbook ......... $50 (with access for 3 devices)


2017 | Issue 1iTABLE OF CONTENTS

INTRODUCTION ............................................................................................................................. vWillys H. Schneider, Arnold & Porter Kaye Scholer LLP

CHAPTER 1 ..................................................................................................................................... 1FORMULATING AN INVESTMENT STRATEGY — SOUND DECISION-MAKING, CONVICTION AND CREATIVITY Glenn Lowenstein and Bryan Sanchez, Lionstone Investments

CHAPTER 2 ..................................................................................................................................... 7RULES APPLYING TO REAL ESTATE INVESTMENT AND OPERATIONS: THE BASICS OF US REAL ESTATE LAW Tim Tucker, King & Spalding, LLP

CHAPTER 3 ................................................................................................................................... 17THE ACQUISITION PROCESSMatt Bronfman, Shak Presswala and Joshua Wechter, JAMESTOWN

CHAPTER 4 ................................................................................................................................... 23STAGES OF AN ACQUISITION: LETTER OF INTENT, CONTRACT OF SALE AND CLOSING Matthew J. Norton and Dennis D. Kiely, K&L Gates LLP

CHAPTER 5 ................................................................................................................................... 37PROPERTY DUE DILIGENCEBrian L. Halberg, Squire Patton Boggs (US) LLP

CHAPTER 6 ................................................................................................................................... 43LEASING AND MANAGING US REAL ESTATE Tishman Speyer

CHAPTER 7 ................................................................................................................................... 51REAL ESTATE FINANCE, PART I: THE LENDER’S PERSPECTIVE Sebastian Kaufmann and Sheryl Kass, King & Spalding LLP

CHAPTER 8 ................................................................................................................................... 65REAL ESTATE FINANCE, PART II: THE BORROWER’S PERSPECTIVE Phillip G. Levy, Barry D. Green and Bjorn A. Andersen, Goulston & Storrs PC

CHAPTER 9 ................................................................................................................................... 73REAL ESTATE FINANCE, PART III: MEZZANINE LOANS Gary A. Goodman and Richard I. Stempler, Dentons US LLP

TABLE OF CONTENTS


2017 | Issue 1ii AFIRE Guide to US Real Estate Investing

CHAPTER 10 ................................................................................................................................. 81JOINT VENTURES, PART I: CONSIDERATIONS ENTERING INTO A JOINT VENTUREAlbert P. Behler, Paramount Group, Inc., and Eugene A. Pinover, DLA Piper, LLP, with assistance from Daniel Backer, Willkie Farr & Gallagher LLP

CHAPTER 11 ................................................................................................................................. 91JOINT VENTURES, PART II: STRUCTURES AND TERMSStephen G. Tomlinson and Kamran Bajwa, Kirkland & Ellis LLP, with contribution from Thomas P. O'Connor and Nolan Stanton

CHAPTER 12 ............................................................................................................................... 101COMMINGLED FUNDS, PART I: OVERVIEW OF FUND TYPES AND STRATEGIES Frank Schmitz and Alex Yekelchik, Park Hill Real Estate

CHAPTER 13 ............................................................................................................................... 109COMMINGLED FUNDS, PART II: STRUCTURE AND LEGAL TERMS John Wilson and Kathryn Furman, King & Spalding LLP

CHAPTER 14 ............................................................................................................................... 121RAISING CAPITAL FOR US REAL ESTATE: SECURITIES LAW REGULATIONS AND RECENT DEVELOPMENTS, AND A FINANCIAL PRIMERStephen B. Huttler, Derek L. Skinner and Leeor S. Baskin, Pillsbury

CHAPTER 15 ............................................................................................................................... 135OBLIGATIONS UNDER THE BANK SECRECY ACT, PATRIOT ACT AND OFFICE OF FOREIGN ASSETS CONTROL (OFAC): POTENTIAL IMPACTS FOR REAL ESTATE INVESTMENTS IN THE US Ronald K. Henry, Arnold & Porter Kaye Scholer LLP

CHAPTER 16 ............................................................................................................................... 141GENERAL US INCOME TAX RULES AFFECTING NON-US EQUITY AND DEBT INVESTMENT IN US REAL ESTATEPatrick Williams and Jenna Walker, World Tax Partners LLP and Bennett Thrasher LLP

CHAPTER 17 ............................................................................................................................... 151TAXATION OF NON-US INVESTORS IN US REAL ESTATE UNDER FIRPTA Willys H. Schneider, Arnold & Porter Kaye Scholer LLP

CHAPTER 18 ............................................................................................................................... 157PARTNERSHIP WITHHOLDING OBLIGATIONS ON EFFECTIVELY CONNECTED INCOME Patrick Williams and Jenna Walker, World Tax Partners LLP and Bennett Thrasher LLP

CHAPTER 19 ............................................................................................................................... 163NON-US INVESTMENT IN REITsWillys H. Schneider, Arnold & Porter Kaye Scholer LLP

CHAPTER 20 ............................................................................................................................... 167IMPACT OF STATE AND LOCAL TAXES ON NON-US INVESTMENT IN US REAL ESTATE Bruce E. Hood, Withers Bergman LLP


2017 | Issue 1

iiiTABLE OF CONTENTS

CHAPTER 21 ............................................................................................................................... 173CONSIDERATIONS REGARDING US ESTATE AND GIFT TAXES FOR NON-RESIDENT ALIENS INVESTING IN US REAL PROPERTYJeffrey S. Levin, Squire Patton Boggs LLP

CHAPTER 22 ............................................................................................................................... 181ISLAMIC FINANCE: BASIC PRINCIPLES AND STRUCTURES Andrew Metcalf, King & Spalding LLP

CHAPTER 23 ............................................................................................................................... 189ENFORCING REAL ESTATE AGREEMENTS IN THE COURT SYSTEM Frederick L. Klein, DLA Piper LLP (US), and Lisa C. Goodheart, Sugarman, Rogers, Barshak & Cohen, P.C.

CHAPTER 24 ............................................................................................................................... 203NON-US INVESTMENT IN US REAL ESTATE: BANKRUPTCY ASPECTSSolomon J. Noh and John L. Opar, Shearman & Sterling LLP, with substantial contribution from Ronni N. Arnold

CHAPTER 25 ............................................................................................................................... 219RESTRUCTURING AND WORKOUTS OF REAL ESTATE LOANS Sheri P. Chromow, K&L Gates LLP (New York)

CHAPTER 26 ............................................................................................................................... 233THE BROKER/INVESTMENT ADVISOR: A WIDE RANGE OF OPTIONS FOR INTERNATIONAL CAPITALJacques Gordon, LaSalle Investment Management, and Noble Carpenter, Cushman &Wakefield

CHAPTER 27 ............................................................................................................................... 243THE ATTORNEY/TAX ADVISORJ. Greer Cummings, Jr., and John R. Haynes, Bradley Arant Boult Cummings LLP

CHAPTER 28 ............................................................................................................................... 247“CORE” REAL ESTATE IN THE 21ST CENTURY MUST BE SUSTAINABLE AND RESILIENT Catherine Pfeiffenberger, Skanska Commercial Development, and Molly McCabe, HaydenTanner, LLC

CHAPTER 29 ............................................................................................................................... 255US DEPARTMENT OF COMMERCE REPORTING REQUIREMENTS IMPACTING FOREIGN-OWNED US REAL PROPERTYRonald Henry and David Hibey, Arnold & Porter Kaye Scholer LLP


2017 | Issue 1

2017

EUROPEAN CONFERENCELondon, England

Claridge’sJune 7-8, 2017

ANNUAL MEMBERSHIP

MEETINGSan Francisco, CA

The Ritz-Carlton, San Francisco

September 11-13, 2017

AFIRE BOOTH AT EXP O REAL

Munich, GermanyOctober 4-6, 2017

AFIRE BRUNCH AT EXP O REAL

Munich, GermanyRestaurant Am SeeOctober 5, 2017

2018

WINTER CONFERENCE

New York, NYMandarin Oriental, NY

February 7-8, 2018

EUROPEAN CONFERENCEBarcelona, Spain

June 6-7, 2018

ANNUAL MEMBERSHIP

MEETINGWashington, DC

September 5-7, 2018

2019

WINTER CONFERENCE

New York, NYMandarin Oriental, NY

February 6- 7, 2019

EUROPEAN CONFERENCE

Frankfurt, GermanyJune 2019

ANNUAL MEMBERSHIP

MEETINGSeattle, WA

September 2019

AFIRE Calendar of Events

For more details of previous and upcoming AFIRE events visit www.afire.org/events

If you are an AFIRE Delegate, please go to www.afire.org to register or print clearly the information below and e-mail this form to AFIRE at [email protected].

Mr./Ms./Mrs. Name:

Badge Name:

Title:

Company:

Mailing Address:

City, State, ZIP, Country:

Phone: Fax:

E-mail:

Special Meals or Needs:

Brief Agenda:Wednesday, June 7th, 1:00pm–5:00pmProperty Tour, Hosted by Aviva(Advanced Registration Required)Wednesday, June 7th, 6:00pm–8:00pmWelcome Dinner ReceptionThursday, June 8th, 8:00am–4:30pmAFIRE ConferenceThursday, June 8th, 4:30pm–6:00pm Cocktail Reception

Hotel Information:Claridge’sLondon, United KingdomBrook St, Mayfair,London W1K 4HR, UKTo make hotel reservations at Claridge’s, please call Holly Saunders at +44 20 7409 6310 or email at [email protected]. The sleeping room rates start at £589.00.Just down the block from Claridge’s there is a block of rooms at the Millennium Hotel. When making reservations at the Millennium, please call +44 20 7659 9400. Sleeping room rates start at £245.00.

To Register: If you are an AFIRE Delegate, please go to www.afire.org to register. To be included on the participant list, you must register online by May 26, 2017.

Cancellation Policy: Refunds will be given for cancellations received in writing to [email protected] by June 2, 2017. Substitutions may be made anytime. Please note that if you do not cancel by June 2, 2017 and you do not attend, you are still responsible for payment.

Questions: Please contact the AFIRE office at 202.312.1400 if you have any questions or log into your AFIRE account at www.afire.org.

Registration Fee & Regulationso First & Second Institutional Member Delegates .....................Complimentary

o Third Institutional Member Delegate ......................................... $1,000

o Associate & Supporting Member Delegates ........................... $1,000

o Institutional Young AFIRE Delegate ............................................$500

o Non-Member Registration .............................................................$1,500

Attendance Policy: Institutional Members may send two delegates on a complimentary basis. A third delegate may attend for the member meeting registration fee. Institutional Young AFIRE delegates may attend for half the member meeting registration fee. Associate and Supporting Members may send up to two delegates who will each pay the member meeting registration fee. Academic Circle Members may send one attendee complimentary. Speakers attend complimentary and are not counted in the maximum number of delegates allowed to attend. Attendance at a meeting may not be split between delegates.

Special Event Registration (you must register to attend, space is limited)Please indicate if you will attend the Property Tour, hosted by Aviva on June 7th.

o I will be attending the Property Tour

o I will not be attending the Property Tour

Payment Information

(All fees and payments are in US dollars.) Please print clearly.o Check (payable to AFIRE) o Visa o MasterCard o American Express

Name on Credit Card:

Account Number: Expiration Date:

Credit Card Billing Address:

Signature:

2 0 1 7 E U R O P E A N C O N F E R E N C EJune 7 - 8, 2017 • Claridge’s • London, United Kingdom

2017 | volume 1 · multifamily property management business. delegates issac hera; new york, ny;...

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