On the Road with Steve Felix

First, thanks for hanging in with me while I figure out how to best continue to publish this column. I got some good advice this week from some younger friends and now believe I have a clear picture of what to do. I'll keep you posted and again, I really appreciate your support. Thanks.

“Dig This” is the “first and only heavy equipment playground...where you can relive your sandbox days.” I heard about this from a good friend who visited this new ‘theme park’ in Las Vegas recently (see photo below). Looks like a great time....I can't wait!

1100 others and me gathered at the flagship Sheraton Hotel in New York this week for the 12th Annual IMN Opportunity & Private Fund Investing Forum. I got a chance to moderate a panel on allocations and, thanks to the knowledge conveyed by my panelists, it appeared that our audience got something good to takeaway. When moderating a panel, I feel that I am the advocate of the audience and when we prepare, I encourage the panel to make believe that they are an audience member and think about what they would like to hear discussed. This worked extremely well yesterday aided by some excellent questions from audience members.

On Tuesday, the night before the IMN conference started, about 25 of us got together for a 'Dutch-treat' drink at the legendary Russian Vodka Room (a non-descript black awning on the north side of 52nd street just east of 8th avenue). It was a quiet night and we had the place almost to ourselves. It was really fun and I personally loved it as a number of the people, all in our industry, had never met each other before. After almost everyone had left I got to play their piano which was a treat as I don't have a chance to play a 'real' piano too often these days.

The interesting thing about the make-up of the attendees at the conference is that it really was a cross-section of the real estate industry ranging from institutional real estate investment managers to people operating platforms funded by high net worth, oh, what the heck, I'm going to start calling them simply 'rich people.' I may have mentioned this to you before, but when I attend almost any conference, I go with very managed expectations and am usually pleasantly surprised and this week was no exception as I met a few folks I had never met before and had some good conversations. Every day it becomes clearer and clearer to me that life is all about people and contacts and connecting as well as making connections. 1100 people is a big show but there is so much time allocated to 'networking' that even a first time attendee will benefit from attending.

I was reading through the latest issue of I&P Real Estate yesterday. These headlines on articles suggest an industry and market that may still be a little mixed-up:

Capital raising for private equity real estate funds yet to recover.
Investors are showing greater appetite for risk.
On the road to recovery.
Business as usual?
Deflated expectations?
Varied appetites as regulations looms?
Generational shift
Institutional exodus.
Disequilibrium threatens.
Go boldly, tread carefully.

These sort of struck me as prophetic. In my simple world, things seem to be progressing, slowly, step-by-step, inch-by-inch but like a friend of mine once told me, "You don't have to be going straight, just forward." And that's a little of how it has felt for a while. There is clearly, recently, much more talk about value-add and opportunistic. Like someone on panel this week said, "Today's core is tomorrow's value-add." But it's still challenging out there and the sorting out that the institutional investor and consultant community has been going through is not yet over. Are some investors willing to take on new manager relationships? Yes. Are some investors investing with 'emerging' (i.e. first time fund) managers? Yes. But, like most things in life, this will never be a 'one size fits all' industry and that is what makes a horse race, right?

NHL: I don't watch much during the regular season but I love watching hockey at this time of year. That first game, when Vancouver scored the winning and only goal with 18 seconds left....what a game!

Congratulations;
Doug Harper joining Principal.
Michelle Wells joining RREEF

Correction (Sorry):

My friend Rob Bilse joined Brookfield. He was formerly with PREI.