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CEO of Jones Lang LaSalle on CNBC

January 28, 2010

Colin Dyer, CEO of Jones Lang LaSalle was on CNBC discussing the CRE market. Unless there are additional monetary shocks, he sees a sharp V-shaped recovery when confidence returns.

Interesting. The other guy in the interview, Ken Rogoff, a professor of economics at Harvard, didn’t seem like he was buying it and called Dyer on his statement regarding the V-shaped recovery and continued to ask questions during the rest of the interview.

Dyer also indicated that JLL shed about 8% of its workforce during the recession, but is now in the process of adding back to its workforce.

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Categories: Commercial Real Estate Investing
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joshua January 30, 2010

ill say this, i thought he was pretty honest. for being a ceo of a CRE firm. except he tried to timeline the different ideals at different paces. thats not clear, so ill point this out – dyer says the market is pricing in fundamentals 12-18 months out, but then when it comes to the issues that will affect those anticipated prices, he writes off the issue (of debt, of rent rates, of occupancy – all of which he said would remain negative for a period of years). especially interest rates – "when will they rise" – well, im going to venture a guess that if inflation holds (5.5% q4 gdp) itll happen a lot sooner than any of us want. then about the banks holding assets – he basically says that things are ok cause prices are coming back and they tend to bounce back from lows quickly. now, hes not WRONG, but hes not right either. the issue isnt if prices have bounced back a little and if thats a positive thing. its about the amount of stuff that has to be dealt with over a period of 1 month to 3 years and if itll be a loss. this isnt going away quickly. things will be better, but the problems wont be solved for a number of years. and thats the thing id needle the guy on. you admit that these issues are there, but then you dont correlate the problem to the timeframe. oh, interests COULD rise, but when would that HAPPEN? well, over 1-3 years, im saying its a safe bet. and its more likely that these issues interfere with each other than give each other a helping hand upward.

squarefeet January 30, 2010

The GDP numbers in Q4 won’t hold so I wouldn’t worry about that too much, but that doesn’t mean we won’t have stagflation. This could stem from a falling dollar. We’ve seen strength in the dollar recently, but whether that will hold up or not as we get towards 100% debt to GDP remains to be seen. There are a lot of risks in the economy, and as you mentioned you need to reduce reward by risk to get to a risk-adjusted rate of return (regardless of whether you’re an IRR or yield investor).

The fact that these levels of risk remain in the market should be a signal that prices won’t be returning as you indicate. As far as banks figuring out what to do with assets, we’re still very, very early in the game. I put an offer in on a commercial property this week and the listing agent called me back and said “I’ve never done a commercial deal”. That alone tells me we have a ways to go.

joshua January 31, 2010

oh, i realize the number is bs. but the number is half the battle. theres perception and what business will do versus what consumers can do. but yeah, agreed. and that deal sounds like fun. ive had success on a couple occasions with convincing the other broker to give up control of the client and he still makes the same fee and ill do the entire deal. but those were rare/lucky instances.

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