The metaphors were as thick as rain clouds when four veteran real estate investors gathered in a Midtown conference room last month to compare their views on trends in the US market. The Roundtable Ed Casal
With a constant drizzle besetting Manhattan, beyond the windows visibility was quite limited, as might also be said for anyone with a real estate portfolio to manage. Just down 42nd Street in Bryant Square Park, Fashion Week was in full swing, while up on the 47th floor of the Chrysler Building, our table talkers all admitted that real estate has never been less fashionable.
The fact that host Aviva Investors’ offices are located in one of the most iconic pieces of real estate in the world, but one named after a corporation felled in part by the over-application of leverage, was not lost on our participants. 
In short, it was the perfect setting for a discussion of the US real estate market, and how serious investors in it plan to find value amid crisis conditions.
All four roundtablers brought to the discussion deep, varied experience and unique insights, but they had one major thing in common – a view on many, many underlying fund managers, who in turn are exposed to a very diverse set of real estate assets across the US and indeed the world.
Once the conversation began, it became clear that the collective experiences voiced in the room were as accurate a gauge of the current US market as any more formal survey could possibly be.
As a friendly lead-in to the main topics of discussion, the four veterans shared notes on the fundraising market. All claimed to be “in the market” but cautious with regard to making commitments to qualified GPs. With regard to their own capital-raising efforts, they confirmed with each other that investors also are exceedingly cautious, focused first on making it through the recession.
These investors remain committed real estate as an asset class, although the understanding of real estate and its risks has changed, possibly permanently.
Someone made the general observation that the core strategy looks especially attractive in today’s market with pricing having fallen. PERE followed up with a question about whether the various strategy designations – core, core-plus, value-added, opportunity – had been hopelessly scrambled in the downturn.
“We’re not supposed to admit that we don’t understand those terms anymore,” said Jack Foster of Franklin Templeton Real Estate Advisors, to laughter.
“Was that on the record?” quipped Capital Dynamics’ Howard Fields.
The topic of how to accurately tag real estate strategies prompted Aviva Investors’ Edward Casal to reveal a modified approach that his firm has taken to helping match clients with the right real estate investment strategy. “We’ve moved away from using the terms core, core-plus, etc., within our group,” Casal said. “I’ve really tried to steer ourselves toward something more basic, which is, low-risk, medium-risk and high-risk tolerance.”
Casal noted that some managers who on paper were supposed to be pursuing lower-risk strategies were, in fact, not. “The amount of risk that was being taken in core strategies was kind of crazy,” he said. “Values got ahead of themselves and leverage was overly aggressive.”
Many fundamentally core managers sought to dress themselves up as value-added investors by attempting to juice up returns through debt. “Some managers said they were adding value by leveraging,” argued Casal. “That’s not value add; that’s value detractive if leverage is used to overpay. People forget that leverage creates additional volatility to the residual income stream.” 
Some managers said they were adding value by leveraging,” argued Casal. “That’s not value add; that’s value detractive if leverage is used to overpay. People forget that leverage creates additional volatility to the residual income stream.
Foster added: “I don’t think we’re going to see a disappearance of the four categories – core, core-plus, value-add and opportunistic. However, the understanding of risk is going to be very important going forward, and what risk is attributed to each of those groupings. There are a lot of discussions around all portfolio management, primarily because 12 to 18 months ago everything was correlated, and nobody was expecting that. We’re in an environment that we’ve never seen before. There has not been a book written about this environment.”
Gary Simonetti of TIAA-CREF Global Real Estate said the fundraising boom tempted too many managers to change their risk profiles. “The abundance of capital that was out there for fund managers to invest caused them to go into areas where they did not have expertise,” said Simonetti. “They were getting into sectors or geographies they had no business being in.”
Strategy creep
Fields warned that incentives remain in place for managers to stray from their original mandates. “Strategy creep is one of the most dangerous things a manager can do,” he said. “I have the utmost respect for the managers who have stuck with what they know they’re good at. They may have missed opportunities for what’s hot today over the last five or 10 years. But if they’re doing what they’re good at, they probably haven’t lost as much money as they might have. I’m much more comfortable with that manager than the one who says, ‘Oh I’m going to buy CMBS debt because I can buy triple-A paper at 40 cents’, and yet has no experience trading debt.”
Foster agreed: “What’s less important today is the ability to adapt to what the neat opportunities are right now. Deciding that debt is a great play, we’ve seen a number of investors jump on that bandwagon without a lot of track record. There is all kinds of creativity that emerges out of an environment like this where people say, ‘Hey listen this is a hot little opportunity, let’s jump on it.’ We’d prefer to see investors stick to a consistent approach over different cycles.” What’s less important today is the ability to adapt to what the neat opportunities are right now. Deciding that debt is a great play, we’ve seen a number of investors jump on that bandwagon without a lot of track record. We’d prefer to see investors stick to a consistent approach over different cycles.
As Casal stressed, style drift pales compared to straightforward lack of risk sensitivity. He said he is not surprised to see certain managers in trouble today.
“The first sign of this was back in 2006 and 2007 when certain firms were basically doing nothing but overpaying for property, using inordinate amounts of leverage and adding no value. You had to know that this couldn’t continue, and that sooner or later this would blow up. Sure enough, the music stopped and things started to reverse and the problems surfaced.
“What’s interesting is that a lot of those problems surfaced very quickly and very noticeably. They were largely debt driven. A fund would be overypay and overlever and then – bang!”
What deal market?
As the inevitable question about the state of the US real estate deal market was being delivered, Casal was unable to suppress a wry smile. It was clear that he was not going to share evidence of robust deal activity.
Sure enough, Casal was first to answer the question. “There’s still relative gridlock, with the wide bid-ask spread,” he said. “There are transactions taking place periodically when either forced or somebody is willing to capitulate to the bid side.”
Casal drew on his experiences in the recessive early 1990s to illustrate the likely pricing dynamics of the current recession. “What we saw in the early 90s was an immediate widening of the bid-ask spread. It narrowed extremely slowly. The bid side actually kept drifting down a bit as buyers realised, gee, this is worse than we thought.”
But the reasons behind a pricing downdraft have changed. “It was amazing to hear the amount of happy talk in 1989 about how the tenants were going to take up all this space that was being built in virtually every city in America,” said Casal. “The problem surprisingly originated on the demand side rather than on the supply side. Today, the leasing rate discovery is taking time to flow through. As rent rates stabilise, eventually there will be more transactions. Those that own without near-term debt maturities; they’re waiting for a better day, still thinking about 2007 prices.”
Fields confirmed the deal drought. “I’ve seen very few new acquisitions of properties by any of our fund managers,” he said. “The couple that I can think of in the last 90-plus days have been unlevered, 100-percent equity acquisitions. There’s really no credit market. So these were very small transactions, at huge discounts to replacement cost. In each of the three cases there was a highly distressed seller, but not a distressed property.”
Limited partners may cheer the completion of deals in this market, but Fields notes that all-equity deals often lack the ingredients that made deals of the early to mid-2000s work so well. “It’s really tough to make a return that is consistent with what you’ve told your investors when you are pursuing on a 100-percent equity basis, but these three acquisitions seem to show that they are out there,” he said.
Foster noted that deals are not getting done in part because – amazingly – many key market participants lack a sense of urgency. “Banks are not incentivised to foreclose,” he said. 
“I’m hearing that the servicers have made decisions on the commercial side to foreclose a lot less where there is maturity in debt, because they’ve got cash-flowing assets. They may have lent the money at a 6-cap, and they realise now that if they sell this operating building today it’s going to trade at a 15- or 20-cap. That’s adding to the log jam out there.”
“The objectives of the buyer are important too,” said Casal. “Buyers are thinking through to the trough. Although we’re never going to pick the trough to the day, we want to consider what the right range in value might be. But currently the range in value is well below sellers’ expectations. And that’s going to take some time to work through.”
Foster worried that buyers in particular may wait too long. “This bottom may not be as deep as people expected,” he said. “One of the most important things I’m seeing today is level-headedness on the investors’ and sellers’ part. There has been a recognition of a liquidity fear right now. But given all the variables that are moving around the globe right now, there is not as much distressed product going into the market. That may help us know how long we should wait to invest. We really may be making mistakes if we don’t get out there and try to do it now.”
Foster pointed to a major market across the Atlantic for evidence that at least some market participants are seeing a bottom: “The UK has been one of the most aggressive in writing down values. Given this amount of level-headedness, we may come out of this fairly quickly. Of course, if we get to 15 percent unemployment in the US, that’s going to have some severe implications. We’ve talked about the lack of overbuilding going into this market, but there clearly now is some overcapacity as the economic slowdown has occurred.”
Simonetti and investors like him may be hastening the arrival of the market bottom by anticipating write downs in their own reports. “Particularly for our own accounts, on valuations, we’ve tried to be ahead of the curve, but you need to explain this to investors,” said Simonetti. “We wanted to be proactive and not wait for things to happen, and took the write downs that we thought were appropriate as we went along, and the good news is that our direct investments are largely performing well and we don’t have any surprises.”
Reassessing the GPs
The world has clearly changed, and so too has the real estate opportunity. There remain many skilled investors in the market but some skills are currently more valuable than others, as our roundtablers discussed. Asked what skills in particular they were looking for in new or ongoing GP relationship, a number of preferences were voiced. Gary Simonetti Ed Casal
“The skills that we often believe are missing are restructuring and finance skills,” said Casal. “There are a lot of people working in these funds who have experience on the upside of the cycle. From bottoming in the early 1990s, we had a pretty good run all the way to 2007 or 2008. But there isn’t enough experience dealing with problems – negotiating with banks, restructuring transactions. Many of the professionals at private equity real estate funds are lacking corporate finance 101 valuation skills – understanding capital structures. A lot of the problems that the funds got themselves into were financially driven.”
Simonetti elaborated on this point. “In some cases, we have found a shortfall where a fund manager may be an experienced real estate operator, but does not have the workout experience dealing with the lenders,” he said. “In some instances, you can really see that its’ just missing. We don’t want managers to come back to the investors at the first sign of trouble and say ‘hey we need more capital’. In some instances, you can really see that [workout experience is] just missing. We don’t want managers to come back to the investors at the first sign of trouble and say ‘hey we need more capital’.
Many managers are acting prudently, setting aside appropriate reserves or restructuring the debt. We want to have a fund manager that’s in there negotiating with the lenders and supporting the investors. Some managers are good operators, but in this kind of market they really need the skills of restructuring, negotiating and the ability to communicate effectively with lenders.”
Fields said he is now much more focused on finding out “whether there are senior folks that are able to say no to deals.”
“I remember, probably around 2005, a well known investor gave a talk at a luncheon,” continued Fields. “And he said the worst deal any one of us did in the last couple of years was anytime we said no. Well, in an up market from 2003 forward – he was right. Any time you said no you lost a lot of money. The people who said no then, I’m assuming they’ll be able to say no now. And it’s going to be that much tougher to find deals that make sense.”
Fields said his firm would now spend more time exploring a firm’s decision-making process with regard to give the green light. “There are some investors who like every deal that they see, and it’s just a matter of getting it at a price they like,” said Fields. “There are other investors that hate every deal they see, and eventually they get worn down by their staff who show them every good reason to do the deal, and eventually they do the deal. I’d rather invest with that latter manager at this point – the guy who takes a long time be convinced, and has explored all the reasons not to do a deal.”
Simonetti expanded on the idea that saying no can be viewed as a key skill. “It comes down to discipline of a firm,” he said. “It comes down to not only acquiring a deal but exiting a deal. Not falling in love with it. Knowing when you’ve created your value and being disciplined about exiting.” There are some investors who like every deal that they see, and it’s just a matter of getting it at a price they like. There are other investors that hate every deal they see, and eventually they get worn down by their staff who show them every good reason to do the deal, and eventually they do the deal. I’d rather invest with that latter manager at this point – the guy who takes a long time be convinced, and has explored all the reasons not to do a deal.
For Foster, what is needed in today’s market is less financial engineering and more asset management. “Asset management is one of the keys,” he said. “That’s never going to get old in our industry. Clearly there are a lot of refinancing issues – restructuring around the extension of commitment periods, etc. There definitely will be bodies in the water through this cycle. But the issues around debt and sourcing of opportunities are going to come and go. As we come out of this, asset management skills are critical.”
“The other thing that’s missing is the ability to marry macroeconomic skill to analytic capability,” said Casal. “In the short term, the industry needs to turn to people with restructuring capabilities and the ability to understand value. In the long run, you have to have some view of the macroeconomic situation that you’re in, on top of understanding the nuances of real estate.”
Simonetti observed that “a lot of private equity shops are transferring some of their acquisitions people to asset management. These are people who may have only been working for a few years. In our experience as direct investors, we’ve seen that asset management is really a skill that is acquired over cycles.”
Foster drew a distinction between returns generated through financial skills and returns generated through actual hands-on management. “What investors in our space are not really looking for is a leveraged return as opposed to a manager that can add value at the property level. Then the leverage is gravy. I think the ability to manage assets and add value is going to come under a lot of scrutiny over the next couple of years. Investors will be looking at track records up to 2007 and say, ‘How was your return generated?’”
The term “leadership” came up, and the men around the table became animated by what they described as a woeful lack of this attribute in the market now. In order to qualify for continued support, they said, GPs need to show leadership within their own struggling firms and also to their reticent LP bases.
Leadership values
When the chips are down, a GP that can keep his team motivated is more likely to win, said Foster. “Leadership in an organisation is important. We have GPs who haven’t done a transaction in a long time, and they want to,” he said. “Managing in an environment where the firm is looking at different transactions over and over again and not being able to execute is difficult. This is a very big issue. It’s a very difficult situation to move through, keeping your people motivated. We’re also looking for a sense of leadership around compensation when carry is gone. As we’re scrubbing issues, that is a big qualitative one.”
Picking up on the meaning of internal leadership, Casal said: “Now as we look at a lot of the managers who weren’t so notably out on the edge, we try to dig deeper to see where they stand with the carry, the internal leadership and how they’re managing their people. Are they holding it together? Is there an emotional sense of ownership in the business even on the part of the people who aren’t the owners? Our discovery process includes talking to mid-level managers and junior associates. Behaviours become really important to observe.” 
“The leadership issue vis a vis the LPs is also very important,” said Casal. “The LPs have become very skittish. A GP with leadership skills will have to try to bring LPs invested in their funds to a consensus as to where the fund should be going, what the vision is and how they are going to execute. It was easier before when investors clamored to be in and believed you weren’t investing fast enough. Then they all wanted out and asked, ‘Why don’t you give me my money back?’ Now there’s a big disparity. I hope to see some leadership on the part of these GPs externally to the marketplace. They need a clear message that says: This is the time to start investing again, and this is why we see value in order to get people together and take action.”
Fear of an illiquid planet
Much of the difficulty in motivating and leading LPs has to do with a newly developed aversion to illiquidity in the market. Illiquidity affects valuation as well as cash flow dynamics. “Because the hard asset space is not liquid, there’s a lot more fear around it, which is one of the factors that jammed the gears, so to speak,” said Foster. Ed Casal
“Hard assets broadly are really long term investments. Unfortunately many institutions are really short-term focused. That causes a lot of issues with the LPs needing to report information up to their boards. Hard assets are going to take some time to recover. If you look at the recovery in the equity and bond markets, it’s been one of the greatest runs we’ve seen. Real estate is not going to move as quickly. When I read the headlines about the endowments that are having trouble [with their less-liquid assets], I shake my head a bit because it’s not really fair. It’s not a long enough window of time to reflect the true value of these underlying hard assets that are priced in an illiquid marketplace.”
“Today our clients are very focused on valuations, cap rates and our expectations of those moves,” added Foster. “They’ve gotten more animated about it as equity and bond markets have come back.” Today our clients are very focused on valuations, cap rates and our expectations of those moves,” added Foster. “They’ve gotten more animated about it as equity and bond markets have come back.
The related issues of valuation and cash flow are also weighing heavy on some fund management companies, not all of which are happy to share details of their financial health with their partners. As soon as the dreaded term “blow up” was mentioned, all participants proclaimed that, while their own GPs were not actually in danger of spontaneous combustion, they were worried that changes to the market would lead to the eventual demise of many.
“So many of the management firms do not issue audited financials,” noted Fields. “The funds do, but the manager does not. Getting a good handle on the financial condition of the manager is almost impossible. In most cases the manager is unwilling to share that information, other than perhaps with some of the gorilla investors. Even then, being on advisory committees and whatnot, it’s tough to get that information.”
A firm that is not thriving often heads in directions that are detrimental to the management of its fund or funds, noted Fields. “There have been numerous key-person events that have been triggered in the last year and a half, oftentimes due to the financial condition of the firm,” he said.
“Sometimes it’s a decision that there was inappropriate hiring. Or financially the manager can’t afford to keep some of these people. I think there is a real risk that some of these managers implode. It doesn’t mean that the manager is going to go away. Virtually every manager will survive, but will they be able to effectively manage their investments?”
Describing the troubled landscape for real estate fund management firms, Casal said: “There are various degrees of blowing up. You’ve got some notable investment banking led funds that were recent vintages that in effect blew up and wasted all the capital. The buildings are still there but the people are gone. You’ve got situations where relatively small managers have encountered very serious trouble with their funds and have lost a lot of people and are in a real crisis mode.” There are various degrees of blowing up. You’ve got some notable investment banking led funds that were recent vintages that in effect blew up and wasted all the capital. The buildings are still there but the people are gone. You’ve got situations where relatively small managers have encountered very serious trouble with their funds and have lost a lot of people and are in a real crisis mode.
Fields shared notes from the field: “I’ve seen with a couple of managers that had teams that went from 30, 40 people down to five to 10 at most. You know that they’re not doing what they used to do. If they’ve let their acquisitions folks go, that probably tells you they’re out of the investment business.
“When you go back into your own diligence files, you find that people that were responsible for asset management and had significant roles aren’t there anymore,” continued Fields. “It is also very telling if they don’t redeploy an acquisitions person into an asset management role or some other role. You wonder if that manager has given up on its future.”
Unlike hedge funds, managers of real estate assets do not often “blow up”, but they do find it hard to raise the next fund. “Perhaps blow-up is the wrong term,” said Foster. “It can seem like a blow-up because as soon as we see a problem, we have to allocate a lot of resources to understanding it and working through it. But it’s not going to pop like a firecracker. These are going to be slow deaths. This is going to be something that doesn’t happen overnight. There are going to be varying degrees of issues that investors are going to have to work through with certain GPs.”
LPs themselves may push for greater risk control by insisting on certain terms and conditions in new partnerships or in amended partnerships. “This is a great opportunity for investors to be more active, to get better terms,” said Simonetti. “There’ll be further probing. Things that may not have been considered at the height of the market. Investors are demanding more transparency especially in regards to how debt is being utilised. The debt issues are what may sink some funds – it’s not just the LTV, its how they used that debt. If there were recourse obligations, cross-collateralisation, guarantees, it’s going to be tough to get out of some of these deals.”
LPs get assertive
Indeed, as investors focus first on assessing the true state of their underlying portfolios, and then of sorting out which managers they want to take them into the future of the real estate market, they are becoming more insistent on GP transparency. Fields put is as, “just requiring us to continue digging and making sure we understand what we’re dealing with. That’s what some of the more active LPs are doing. They’re not causing trouble – they’re digging. I make calls and I get calls with regularity from some of my LP peers, saying, ‘Did you know this’ or ‘I’ve got a real problem with this, would you support me in demanding this information that the manager doesn’t want to share?’”
In extreme cases, LPs are weighing “firing” certain GPs, but as anyone involved in a private fund can attest, this process is highly fraught. However, said Fields, “there is going to be more and more limited partner activism. Up to this point I haven’t seen limited partners have the guts to replace a manager. But recently I have seen LPs be much more active in pushing their managers to do certain things. I think we’re going to see more and more of activist management by the existing LP base.”
GPs attitudes revealed
The true test of an investment partnership comes not when the sun is shining but when the rain is falling. GPs who effusively communicate with their investment partners and act as true fiduciaries of the fund are now standing in stark contrast to those deal guys who just don’t get it, said the roundtablers. Ed Casal
“Some GP don’t really think of investors as partners, but as assets,” said Foster. “And so they begin to take actions that are not necessarily in the LPs’ best interest, but in the GPs’ best interest. We’re starting to see
a bifurcation between those GPs that treat their investors like partners, and those that are taking action with blinders on. The mindset of organisations like these is, these LPs are lucky to be with us. They take action without communicating. That is very, very frustrating. That’s not the majority of cases. Some GP don’t really think of investors as partners, but as assets.
“In most cases the GPs are really working hard to communicate. But as you know, it’s the problems that take 90 percent of your time,” Foster said.
Casal also noted a stark difference between GPs who seem to shrug about the state of the market and others that want to work through the troubles in close partnership with their LPs. “You see a range of reactions from the GPs,” he said. “One manager might say, ‘Gee who could have known that the world was going to implode? Life is tough and we’re doing the best we can’. Then we have other managers where they call us and it’s clear they are looking for feedback from the LPs. They say: ‘You know, we have some debt coming due in 2010 and we’re starting to think about this. And man what were we thinking? Here’s how we’re thinking about dealing with this.’ They are looking for the best ideas they can get. You feel better about those situations. You feel like you’re being included. You feel like they’re at least being proactive and owning up to the mistake.”
“Fortunately we don’t have too many in the former camp, but we have one that stands out, and it’s very frustrating,” added Casal.
He draws a comparison between the last big real estate recession and the current one, and what these downturns revealed about managers of real estate assets. “Back in the early 1990s when REITs emerged from all the troubles in commercial real estate, one of the key things that we focused on was the manager’s ability to act as a fiduciary for the shareholders,” said Casal. We’re looking for guys that embrace their role as fiduciaries, deal with LPs as partners and want us to be in Fund II, III and IV with them.
“Before that the real estate development model was for developers to keep every relationship at arm’s length model. They’d have architects, engineers, site planners, debt and equity professionals – all people brought together to create value for the developer. Once you moved to perpetual entities in the REIT world, you had to think of your equity as your partner in a fiduciary relationship.”
Casal continued: “Similarly, we deal with closed-ended funds that, while not fully perpetual entities, need to be thought of as long-term relationships. We’re looking for guys that embrace their role as fiduciaries, deal with LPs as partners and want us to be in Fund II, III and IV with them. That guy behaves very differently than the guy who says, ‘Well here are some deals … I’m going to make some money and then I’m going to retire.’ You see the negative result of that attitude in troubled times.”
Chrystal ball time
It would not have been sporting to gather four veterans of multiple real estate cycles into a room and fail to ask them about the future. Where do they see the best opportunities going forward? What kinds of managers would they be most enthusiastic about once the haze of uncertainty begins to list a bit? Ed Casal
Simonetti was the first, but not the last, to note the importance of having a strong niche: “We’ll look for a manager with a targeted focus – one that is focused on a particular sector or geography. Because we have such a large focus on the US and Western Europe through our direct investments, we’re particularly interested in finding strong emerging markets managers to help us further diversify our portfolio in those geographies.”
Casal mentioned a specific strategy his firm is currently pursuing, based more on the financial state of the fund than on specific strategies. “In the short term we are focusing on recapitalisations of funds, because it’s a place where capitulation is having to take place,” said Casal.
“There are deadlines, things have to happen, new capital has to be brought in. While some loans are being extended at maturity, over time that won’t compensate for the fact that there is $1.4 trillion in debt that has to be dealt with. There is very little prospect getting back to a pace of $500 billion in new financings a year. That’s a big gap that needs to be filled by equity from somewhere. We think that’s a very interesting place to play from a strategic standpoint.” In the short term we are focusing on recapitalisations of funds, because it’s a place where capitulation is having to take place.
At this point, Fields was the first to bring up the RTC, a reference to the foundation of the opportunity funds industry, as well as a reminder that a small minority of GPs in the market today have the skills to navigate an RTC-type opportunity.
“There’s potential for a return to the early 1990s,” said Fields. “We’re in a period where there could be something equivalent to the RTC. Some of the large lenders eventually are going to have to do something with their portfolio of loans that are way above their standards for loan to current value. Thus far, there’s been almost no commercial foreclosure activity. I suspect we’ll see movement of a lot of that debt at some point in the next couple of years. I think there will be enormous opportunities for a player who understands it from the early 1990s to do it again. That would be a primary focus that I have.”
Foster, like Simonetti, revealed a fondness for Asia. But this being a US discussion, he noted the benefits of investing in major urban areas, which be liquid earlier and longer.
Fields agreed: “Historically I’ve preferred to focus on gateway cities around the globe. That’s still where I want to put capital because eventually that’s where liquidity will be.”
Casal, too, noted that major urban areas would always have been attractive, if not for the sky-high prices. “Our portfolios are very light in places like New York City and San Francisco, where up until now values were so high that we couldn’t justify getting in,” he said. “We went other places. We think now is a great opportunity to buy at very reasonable prices in gateway cities around the world. Six years from now, I’d like to look back and say I planted flags in all the big gateway cities at great prices.”
At this, our veteran roundtable participants grabbed their umbrellas and headed for the door. It was messy out there, but they had to get back to work.
Jack Foster Foster
Managing Director, Head of Global Real Estate
Franklin Templeton Real Estate Advisors
Foster joined Franklin Templeton in 1987. His responsibilities include advising institutional real estate
investors on global property investments and management of global real estate portfolios, which include both property securities and unlisted property securities for the firm. 
His real estate career started more than 20 years ago in Maryland and Virginia, where he worked in residential housing development.
Foster’s group has $5 billion in assets under management and teams in New York, Frankfurt, Melbourne, Singapore and Hong Kong.
Franklin Templeton Real Estate Advisors is a division of Franklin Templeton Institutional, a publicly traded asset manager with approximately $500 billion in assets under management.
Edward Casal Casal
Chief Investment Officer,
Global Real Estate Multi-Manager Group, Aviva Investors
Casal has overall responsibility for ensuring consistency of approach across his team and for ensuring that macro-economic issues that affect sourcing and portfolio construction are reflected.
Casal’s group has teams in New York, London and Singapore. 
He has over 26 years of experience in real estate capital markets and international corporate finance. He joined Aviva in 2008, when the operating team of Madison Harbor Capital was integrated into Aviva Capital Management. Casal co-founded Madison Harbor Capital, LLC, a real estate multi-manager firm, in 2004.
Madison Harbor was an industry pioneer, creating the first SEC registered real estate fund of funds, and implementing a highly-respected investment process. Previously, Casal spent 18 years at UBS Investment Bank, beginning with one of its predecessor companies, Dillon, Read & Co. Inc. Casal served as manager of the real estate business in the 1990s and director of North American real estate advisory business.
Simonetti
Gary Simonetti
Director, Real Estate Acquisitions
TIAA-CREF Global Real Estate
As a member of TIAA-CREF’s Global Real Estate team, Simonetti is responsible for the acquisition and
management of private real estate funds. 
Previously, he held several other positions at TIAA-CREF where he was responsible for commercial real estate lending, mortgage closings, and new investments in mortgage and real estate.
He joined TIAA-CREF in 1991. TIAA-CREF Global Real Estate is one of the largest institutional real estate investors in America, managing a global portfolio of direct and indirect investments totaling approximately $58 billion. TIAA-CREF is a provider of retirement services in the academic, research, medical and cultural fields with $374 billion in combined assets under management.
Fields
Howard Fields
Managing Director, Head of Real Estate
Capital Dynamics
Fields previously oversaw HRJ Capital's global real estate funds. Prior to joining HRJ Capital, Fields spent 21
years at Allstate Insurance Company. 
He helped transform Allstate from a direct real estate investor to a multi-strategy real estate investor with a rapidly growing portfolio. Prior to joining the real estate investment department of Allstate, Fields was a tax attorney with KPMG, Deloitte &Touche and then at Allstate, specialising in the taxation of financial institutions and their investments.
Until its acquisition of HRJ Capital this year, Capital Dynamics, in business since 1988, was devoted exclusively to private equity asset management. The Zug, Switzerland-based firm provides investment solutions to institutional investors around the world and has $20 billion in capital under management.
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