Robert Knakal - State of the Distressed Nation
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ROBERT A. KNAKAL Chairman & Founding Partner Massey Knakal Realty Services BACKGROUND: • Wharton School of Business - 1984 • Began Career 1984 – CB Richard Ellis • Massey Knakal Established 1988 BROKERAGE: • Over 1,125 Properties Sold • $7.0 Billion Aggregate Market Value • Two-Time Winner – Most Ingenious Deal of the Year • REBNY Lifetime Achievement Award
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Opening Address: State of the Distressed Union: Where We are and Where We are Headed * Robert Knakal, Chairman, Massey Knakal Realty Services
Transcript of Robert Knakal - State of the Distressed Nation
ROBERT A. KNAKALChairman & Founding PartnerMassey Knakal Realty Services
BACKGROUND:
• Wharton School of Business - 1984• Began Career 1984 – CB Richard Ellis• Massey Knakal Established 1988
BROKERAGE:
• Over 1,125 Properties Sold• $7.0 Billion Aggregate Market Value• Two-Time Winner – Most Ingenious Deal of the Year• REBNY Lifetime Achievement Award
INVESTMENT SALES MARKET OVERVIEWROBERT A. KNAKAL
2. COMMERCIAL REAL ESTATE METRICS
TABLE OF CONTENTS
• Volume• Value• Distressed Assets
1. NEW YORK CITY OVERVIEW
• Banks
• Government
4. MACRO CONSIDERATIONS• Economic• Political
4. OPTIMISM VS. PESSIMISM
• Special Services
NEW YORK CITY COMMERCIAL PROPERTY SALES
Top Brokerage Firms 2001-2009Based on # of Transactions (All Sales)
CITYWIDE DOLLAR VOLUME(AGGREGATE SALES PRICE)
2005 –2010, ALL SALES (IN BILLIONS)
$32.6
$44.2
$62.2
$25.3
$6.3
$14.5
$0
$10
$20
$30
$40
$50
$60
$70
2005 2006 2007 2008 2009 2010Source: Massey Knakal Realty Services
NYC TOTAL SALE DOLLAR VOLUME2010
Source: Massey Knakal Realty Services
NYC TOTAL BUILDINGS SOLD
Source: Massey Knakal Realty Services
4,443
4,875 5,018
3,144
1,4361,667
0
1,000
2,000
3,000
4,000
5,000
6,000
2005 2006 2007 2008 2009 2010
% OF TOTAL STOCK SOLD
2.69%
2.96% 3.04%
1.91%
0.87%1.01%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
2005 2006 2007 2008 2009 2010
Source: Massey Knakal Realty Services
AVG. PRICE PER PROPERTY SOLD(IN MILLIONS)
Source: Massey Knakal Realty Services
$7.3
$9.1
$12.4
$8.0
$4.4
$7.2
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
2005 2006 2007 2008 2009 2010
AVERAGE PPSFMANHATTAN – FROM PEAK TO 2009
-32%
AVERAGE PPSFMANHATTAN – FROM PEAK TO 2010
-38%
A. VOLUME
CURRENT ISSUESFOR THE
INVESTMENT SALES MARKET
• Dollar Volume• Number of Sales• Externalities• Distressed Asset Flow
B. VALUE
CURRENT ISSUESFOR THE
INVESTMENT SALES MARKET
• Fundamentals• Supply / Demand• Interest Rates• Financing• Alternate Investments
C. DISTRESSED ASSETS
CURRENT ISSUESFOR THE
INVESTMENT SALES MARKET
1. Banks
2. Special Servicers
3. Government
1. Banks
CURRENT ISSUESFOR THE
INVESTMENT SALES MARKET
• Work It Out• Short Sale• Note Sales• REO
2. SPECIAL SERVICERS
CURRENT ISSUESFOR THE
INVESTMENT SALES MARKET
• Overwhelmed• Transaction Flow Increasing• Sold or Recapitalized• “Insiders” Able to Compete
3. GOVERNMENT
CURRENT ISSUESFOR THE
INVESTMENT SALES MARKET
• TARP• TALF• FDIC• The Fed
As we progress into 2011,there are many reasons for:
• Optimism
• Pessimism
Half Full or Half Empty?
10 THINGS TO KEEP AN EYE ON:1. Unemployment
3. Banking
4. Global Implications
5. Supply vs. Demand
2011 and BEYOND
2. Corporate Profits
6. Housing Market
7. Inflation
8. Fed Monetary Policy
9. Deleveraging
10. Deficits, Debt, Pensions
ROBERT A. KNAKALChairman & Founding PartnerMassey Knakal Realty Services
Massey Knakal Realty Services275 Madison AvenueNew York, NY 10016
