Speaker Series — Glenn Rufrano
Glenn Rufrano, President & CEO of Cushman Wakefield (CW), took time from his busy schedule this past Valentine’s day to speak about his outlook of the RE industry. In stately Oak Roam of Newman Hall on East 22nd street, Mr. Rufrano started by saying that 2010 much better than 2009, but far behind 2007. As bad as the RE environment may be, there was no overbuilding. Furthermore, lots of capital and assets were not dumped. Investment is still risk-averse in both geographic (prime markets) & property types (Class A).
Looking forward 2011 will require asset managers to have more capital so that they can address deferred maintenance. As for the employment picture, Mr. Rufrano held out good news for the audience — more jobs, especially in CW. He expected the same in the overall industry and in the general economy in the next 24 months.
The CMBS market is starting to churn a little bit, but a question hangs out there: Will there be another disaster with CMBS? Are these pundits being bearish?
Mr. Rufrano thinks that outlook is dated and that there is more equity capital coming in. Previous LTV was up to 130% now it’s 90%, it’s still too high, but it’s better. To the owner CW will supply equity and some working capital to form a JV. There are options now that didn’t exist previously.
Those are the near- and mid-term views. As a longer-term trend CW sees leases taking much less space per person. Typically leases used to be around 250, now its 175 or less. The efficiency of the space and type of space are driving a lot of demand. This trend will alter the commercial RE landscape.
Many thanks to Mr. Rufrano for stopping by from the students here at Zicklin.