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Panel: Opportunistic Situations Drive Smart Money

WOODBRIDGE—The program title for NAIOP New Jersey’s chapter meeting asked the question, “Office, Industrial, Mixed-use: Where is the Smart Money Going?” The event was held at the Renaissance Woodbridge Hotel.

“The recovery is underway, and transactions are occurring – people are buying and selling commercial real estate assets. "What are you buying and selling, or not?” moderator Alex Klatskin of Forsgate Industrial Partners asked panelists. For Bill Hankowsky, the answer was “industrial. We bought 4.2 million sq. ft., mostly industrial, in the past year. We continue to try to buy value-add situations,” Hankowsky said. “Most of the institutions are looking for stabilized real estate. We’re targeting value-add.”

Hartz Mountain Industries is similarly being “opportunistic,” said the company’s Emanuel Stern. In the process, his company has expanded beyond its office and industrial roots into the multi-family category, including a property acquisition in the Chicago market, and is also buying development sites.

Joseph Taylor of Matrix Development Group agreed with Hankowsky on the industrial category. “We are buying anything we can in that sector,” both in New Jersey and out-of-state. “We are also focusing on redevelopment, and are trying to be opportunistic on the portfolio we already have.”

Mitchell Hersh of Mack-Cali Realty Corp. termed his company’s approach “facile.” One interesting recent transaction by Mack-Cali was the acquisition of debt in Stamford, Conn.: “We were able to do it because of the liquidity on our balance sheet. We are now the debt holder in a senior debt position.

“We’ve all lived through four or five years of economic headwind, and debt provides an opportunistic situation,” said Hersh. He also noted that his company is looking into “company-type acquisitions in our core market,” but conceded that “the integration process can be difficult.”

What do the panelists regret, if anything, about their activities over the past year? “Our biggest regret is not being more proactive in capital recycling on the ‘sell’ side,” Hersh said. “Our only regret is the deals that we didn’t get,” said Stern, who did concede, however, that “we were lucky we didn’t get some of those deals.”

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