"Reviving the Economy: Real Estate"-Jeffrey Deboer, CEO Real Estate Roundtable
Monday, April 20, 2009SUSIE GHARIB: Real estate CEO's are looking at a damaged market, but they see glimmers of hope. That's the bottom line for the Real Estate Roundtable which released its quarterly sentiment survey today. As we continue our series "Reviving the Economy: Real Estate," Stephanie Dhue spoke with Jeffrey Deboer, the group's president and began by asking about the outlook for commercial real estate.
JEFFREY DEBOER, PRESIDENT & CEO, REAL ESTATE ROUNDTABLE: The outlook on a relative basis is better than it was three months ago and it's better than it was six months ago, but it still continues to be a fairly cautiously optimistic situation. The credit markets continue to create great stress for people who have to finance their properties or are looking to sell or to buy properties. And at the same time, the fundamentals in commercial real estate in terms of vacancy rates and office market, vacancy rates in the retail sector and hotel occupancy are all going the wrong way. And so and it's an uncomfortable and very challenging market, but has improved slightly over the last couple of months.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Some people say the bankruptcy of General Growth Properties, the second largest mall operator was a canary in a coal mine. What do you think?
DEBOER: Well, I think it in some respects. They had a large amount of debt that needed to be refinanced. And the fact of the matter is that anyone who is trying to refinance debt today is facing a very difficult situation. And so to the extent that their problems were caused simply by the inability of the system to accommodate their debt that is rolling forward, they are a canary in a coal mine unfortunately and we're concerned that there is going to be a lot more until we get these credit markets straightened out.
DHUE: Now the Federal Reserve has its TALF program. When do you see that being executed and what does it need to have in it to restart these markets?
DEBOER: Well, the TALF -- we think that the outline that has been put forward by Secretary Geithner and Chairman Bernanke and Bill Dudley from the New York Fed, the outline is a good outline with the Term Asset Lending Facility, the TALF and the public/private investment partnership, the PPIP. It is a mouthful but the seeds are there if they operationally, the details make sense. We're concerned that it's taken quite some time for these programs which were announced now sometime ago. But they're very complicated. Staff of those agencies are working on them. And if they can be put in place we think they will help provide a road map out of this problem.
DHUE: We've been speaking with Jeffrey Deboer of the Real Estate Roundtable. Thanks for joining us.
DEBOER: Thank you.
GHARIB: You can watch more of our interview with the Real Estate Roundtable's Jeffrey Deboer on our website, NBR on pbs.org.
