DLA Piper's Global Real Estate group hosted a forum, Investing in a Time of Global Political Turmoil, on Tuesday featuring Lord George Robertson, former Secretary General of NATO and UK Minister of Defense.
John Sullivan, DLA Piper's US Real Estate practice chair, introduced the program at the firm's New York office, which included discussions among leading government and industry panelists on challenges and opportunities for cross-border investment in this economic and political climate and the year ahead.
In his keynote, Lord Robertson, who currently serves as a senior counselor with The Cohen Group, shared his perspective on recent historical events that led to the current global landscape of conflict and contradictions, emphasizing the role of institutions as the "liquidizers of history." He outlined some predictions for the future of Europe, concluding with: "The EU won't fall apart, Brexit negotiations will yield an agreement, London will remain a financial center, and surprises are yet to come."
The first session, Brexit and Similar Trends in Continental Europe - What Do They Mean for Real Estate Investments in Europe, was moderated by Olaf Schmidt, DLA Piper's Global Real Estate sector co-chair. Participants included Chaim Katzman, CEO, Gazit-Globe; Michael Graziano, Global co-head of Real Estate, Goldman Sachs & Co.; Blake Hutcheson, president & CEO, Oxford Properties Group; and Tony Smedley, head of Continental Europe, Schroder REIM.
Asked whether Brexit changes their view of investment in the EU, panelists agreed they are fortunate to be operating in the "physical asset class" of real estate, which despite challenges of cyclical behavior and different laws, is still a stable long term investment in the UK and most major European cities. As for Brexit's effect on real estate values, most agreed that after getting over initial shock and a brief period of disruption, it's a "zero sum game" with capital still flowing to the UK, and London proving to be "particularly resilient." It was stated that the urbanization of Europe is moving ahead at full force and can lead to more opportunities and lower borrowing rates.
The second session, Populism, Isolationism and the Search for Global Investment Opportunities, was moderated by Eugene Pinover, DLA Piper's NY Real Estate practice chair. Participants included Frank Cohen, senior managing director, Blackstone Group; Glenn Rufrano, CEO, Vereit, Inc.; Richard Saltzman, president, Colony Northstar Inc.; and Cia Buckley Marakovits, chief investment officer, Dune Real Estate Partners.
This panel discussed the state of the US retail sector, debating the actual long term impact of e-commerce on brick-and-mortar retailers and aging malls. They noted how industry insiders often miss trends going on around them, with slow reaction and adaption creating a tendency to become "over retailed." On the impact of prospective US tax changes, there was consensus that a border tax could have negative repercussions but, at the same time, there was agreement that there is bipartisan consensus around the need to reduce corporate taxes.
In his concluding remarks, Jay Epstien, DLA Piper's Global Real Estate practice co-chair, reiterated the overriding theme that even in these uncertain times when little is predictable, real estate is one of the few global assets that will stand the test of time.