2024 Winter Issue of Urban Land - 11

MENTS
posium. " You get this very ...
blunt, candid conversation. "
The candid conversations
help participants understand
each other's perspectives. " The
best way to smooth out business
problems is to work hard
at developing long-term relationships
of trust, " says McCoy.
Participants were already
planning conversations before
the symposium in December
2023 to help answer questions
or confirm theories about the
coming year.
For one very specific example:
many opportunity-minded
investors hope to buy over-leveraged
properties in 2024 at a
discount as owners are forced
to sell. Others believe that if
such properties as apartment
assets have income, and borrowers
are willing and able to
maintain their buildings, banks
may allow them to " extend
and pretend, " says Sheridan
" Schecky " Schechner, managing
director and U.S. head of
real estate investment banking
at Barclays Capital, based in
New York.
Conversations at the symposium
may give Schechner a
chance to test that theory. " In
the room, I'll definitely have a
couple of conversations about
... their appetite to take back
loans in multifamily, " says
Schechner.
Featured presentations
In recent years, the symposium
has featured presentations
on the state of capital
markets and the outlook for
the coming year by Roy
March, chief executive at real
estate investment bank Eastdil
Secured; and Ken Rosen,
chairman of real estate market
research firm Rosen Consulting
Group, chairman of the Fisher
Center for Real Estate and
Urban Economics, and professor
emeritus and California
state chair of real estate and
urban economics at the Haas
School of Business at the University
of California, Berkeley.
Rosen has a long history
of skepticism around what
he calls artificially low interest
rates. " The initial response to
the Great Financial Crisis, pouring
money into the system in
2008, 2009, and 2010, and
during the coronavirus in 2020
and 2021, was right-but then
they kept going, " says Rosen.
" That led to this huge overvaluation. "
March,
working from the
same set of data, has a more
optimistic view. " If we look
at what a normalized cost of
capital is, Ken and I will agree
on that, " March says. However,
even as real estate values
adjust to " normalized " interest
rates, closer to their levels
before the Great Financial
Crisis, he believes commercial
real estate will continue to
attract investment because of
its underlying characteristics:
resiliency in terms of inflation
and current income.
" Every time there's been any
downturn as a result of interest
rate rises, there's been an
upturn that outsizes where the
levels were before, " says March.
He tends to point " up and to
the right, " sketching an upward
slope in his future forecast.
" You always get the two
perspectives, one right after
another, " says Schechner. " It's
very interesting to hear that. "
The idea for the McCoy
Symposium began with a
meeting in 1991, in the aftermath
of the savings and loan
crisis. The original attendees
included McCoy and Rosen,
along with other capital
markets leaders, such as
economist Anthony Downs.
They met at the U.S. Federal
Reserve with then chairman
Alan Greenspan and other Fed
board members and staff. The
group of real estate experts
gathered again thereafter for
the first official McCoy Symposium
and has met every year
since then.
" If there's any period that
looks similar to that time, it is
this one, " says Rosen. " There
was no money, and there were
a lot of delinquencies and foreclosures. "
The
capital markets disruption
eventually resolved with
a government intervention to
resolve vast portfolios of troubled
loans. Other disruptions
were resolved as new sources
of capital emerged.
WINTER 202 4
URBAN LAND
11
Cycles are nasty
things. We set
out to solve one
set of problems,
but before we
are halfway
through, the next
set of problems
appears.
-BUZZ MCCOY
DEVELOPMENTS
2024 Winter Issue of Urban Land

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