Transcript Dennis Yeskey Presentation

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Did You Believe Us Over The Last Five Years
What we think for 2015 & 2016
January 20, 2015
Dennis P. Yeskey
Managing Partner/Founder
[email protected]
“Keeping Clients & Investors Ahead of the Market”
Outline
•
Summary 2015
•
Predictions - 2014, 2015 & 2016
•
Product Life Cycle
•
Top Five Issues – 2015 & 2016
•
Some Interesting Misc. Exhibits
www.yeskeyrealestate.com
Predictions 2014
Topic
2014 Prediction
2014 Actual
2014 Grades
GDP
+2.5-2.7%
2.5% +
A+
Interest Rates
Flat, slightly up
Flat, slightly down
B
Stock Markets
Modest rise; 8-10%; USA
Remains the place to invest
8-13%, USA #1
A
REITs
Up Year – Double digits
Up > 30%
A+
Cap-X – Business
Investment
USA, Needs to be up!
USA; Mixed
B-
Dollar
Dribbling Down
Flat, slightly up at YE
B
CRE
Great year so far in 2014
Great year
A+
Residential
Watch out – Res boom is a
head fake driven by
investment not
fundamentals.
No Boom- Correct!!!
A
Source: Yeskey Real Estate
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Predictions 2015
Topic
2014 Actual
2015 Prediction
GDP
2.5% +
2.7% - 3.0%
Interest Rates
Flat, slightly down
Flat
Stock Markets
8-13%, USA #1
5% - 8%
REITs
Up < 30%
10%
Cap-X – Business Investment
USA; Mixed
Flat
Dollar
Flat, slightly up at YE
Flat
CRE
Great year
Another good year
Residential
No Boom- Correct!!!
Slightly up
Source: Yeskey Real Estate
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We are in the sixth year of recovery… Will we make it to seven?
2007-2008
2014
2009
Product
Extension
2010
2013
2012
2011
Recovery
www.yeskeyrealestate.com
Expansion
Boom
TIME
5
Decline
A Seven Year of Expansion is Very Rare!
“Tipping Point”
2015-2016
2014
2017
2007-2008
Extended
Expansion
2009
2013
2010
2012
2011
Recovery
www.yeskeyrealestate.com
Expansion
Boom
TIME
6
Decline
Summary - Top Ten Issues 2012-2014
2012
1. Government
Intervention
2. Rules &
Regulations
3. Economy
www.yeskeyrealestate.com
2014
1. Real
Business
Investment
2. Residential
3. Government
Intervention
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Top Ten CRE Issues 2014
1. Business Investment
2. Residential
3. Government Intervention
4. Capital Markets & Alternative Investments
5. Costs – replacement & operations
6. Global – foreign in to US.
7. Traditional CRE Fundamentals
8. Development
9. CRE Equity including REITs
10.CRE Debt Including CMBS
www.yeskeyrealestate.com
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Summary - Top Five Issues 2015-2016
1. Domestic Economy; “Can we make history?”
2. Global Economy; “Gloom grows”
3. Capital Markets; “Reactions”
4. Flows into CRE; “The yield chase”
5. CRE Fundamentals; “Continue to improve”
www.yeskeyrealestate.com
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Some Interesting Misc. Exhibits
www.yeskeyrealestate.com
Equity REITs– Outpacing Stocks in 2014
Comparative Returns, Year End 2012, 2013 & 2014
Nikkei 225 (JP)
12/31/12
22.94%
12/31/13
56.72%
12/31/14
7.1%
NASDAQ Composite
15.91%
38.32%
13.4%
Russell 2000
14.63%
37.00%
3.5%
S&P 500
13.41%
29.60%
11.4%
DJIA (US)
7.26%
26.50%
7.5%
DAX (DE)
29.06%
25.48%
2.7%
NYSE Composite (US)
12.93%
23.18%
13.2%
CAC40 (FR)
15.23%
17.99%
-.5%
FTSE100 (UK)
5.84%
14.43%
-2.7%
Hang Seng (HK)
22.91%
2.87%
1.3%
DJ All Equity REITs (US)
14.29%
-0.47%
30.14%
DJ All REITs (US)
13.00%
-1.82%
27.20%
Barclays Aggregate Bond
2.70%
-4.19%
6.0%
Gold 1oz Spot
8.26%
-27.33%
-1.5%
Source: Yahoo! Finance, gold.org
www.yeskeyrealestate.com
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Predictions – Economy
Topic
Early 2011 What People
Were Saying
Our Prediction,
Early 2011
Actual 2011
GDP
3% to 4% Growth,
or Double-Dip Recession
1% to 2% Growth
1.7% Growth
Top Issue
Jobs
Jobs
European Debt
Unemployment
Expected to Remain Above 9%
Stays High,
But Dips Below 9%
Yr End 8.9%
Housing
Turning the Corner
Continued Decline
Declined
Source: Yeskey Real Estate
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Predictions – Economy
Topic
Our Early 2012 Prediction
Actual
2013 Prediction
GDP
2%+ Growth
2.0, 1.3, 3.1
2.3 – 2.5%
Top Issue
Government Intervention
Govt. Intervention
Economy &
Business
Investment
Unemployment
Heading down, toward 8%
7.8%
7.5%
Housing
Flat, But Bottoming
Bottomed
Continued
Slow Up
Source: Yeskey Real Estate
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Predictions – Commercial Real Estate
Topic
Early 2012 Prediction
Actual
2013 Prediction
CRE
Up Modestly
Up Significantly
Continues Up
CRE Fundamentals
Up More, Including NYC
Up
Continues Up
Equity
Greater Availability for
Money and Deals
Greater Availability for
Money and Deals
Greater Availability
for Money and Deals
REITs
Up Year – Will Top Stock
Market Again
Topped Stock Market
Again (14-20%)
Top of Market,
beating gets tough
Debt
Continuing to Open Up
It has
Slight improvement in
non-core markets
Did until 4th Q 2012
Significant up year
CMBS
Troubles Continue,
Inevitable
But
Source: Yeskey Real Estate
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Y
www.yeskeyrealestate.com
Yeskey Real Estate Consulting and Investments
www.YeskeyRealEstate.com
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Dennis P. Yeskey
Yeskey Consulting (Yc) and Investments (Yi)
Mr. Yeskey is the Founder and Managing Partner for two firms: Yeskey Consulting (Yc) and Yeskey
Investments (Yi). Yc is a unique company formed 5 years ago after Dennis’s retirement from Deloitte as the
Senior National Partner in charge of Real Estate Capital Markets, and after over 40 years in the business
world. Yc accepts a limited number of consulting and research assignments which are mostly focused on
developing new business strategies, debt restructurings, and operational improvements across the Real
Estate arena. Mr. Yeskey is also the Managing Partner of Yi which involves managing a family office and a
series of private investments, along with developing new research boutique operation.
While at Deloitte, Mr. Yeskey was recognized as the senior leader of Deloitte’s Real Estate, Financial
Services and Capital Markets Practices both domestically and globally. Initially, recruited by Deloitte’s
Chairman to head the NYC office’s real estate services practice, he successfully restructured the practice
and achieved and annual growth exceeding 25% with a staff of over 250 professionals. Promoted to the
Group Managing Partner at Deloitte, he led a practice of over 1000 professionals focused on the real
estate, investment management, private equity, hedge fund and insurance industries. He served on the
New York Executive Committee, the firm’s National and Global Financial Services Practices and directed
the financial services marketing and eminence building activities.
Before joining Deloitte, he was a partner and practice leader at Kenneth Leventhal and Co. from 1987-1995
where he initiated a new practice focused on institutional real estate, specifically, insurance based real
estate. He is a long time member and Governor of ULI, as well as being very active on the Real Estate
Round Table. He is a frequent speaker at numerous real estate industry events and author of industry
publications. He received his MBA from Columbia University Business School along with an MS and BS
from the Swanson School of Engineering at the University of Pittsburgh.
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