THE SENIOR MEN'S CLUB OF NEW CANAAN
Minutes of the Regular Meeting of January 22, 2010
President George Perkins opened the meeting with 128 of 487 members present.
NEW MEMBERS: Membership Chairman Jerry Transue introduced Robert (Bob) Clay.
MINUTES: Roger Langevin, Assistant Secretary, read the minutes of January 15, 2010.
MEMBERSHIP ASSISTANCE: Chairman Bob Moylan reported that Craig Wright was recuperating at home and John Newman still recovering at Waveny.
ANNOUNCEMENTS: Navy League lunch, Wednesday, 2/3 at Riverside Yacht Club. A free one day defensive driving session for members and spouses, probably in May.
ACTIVITIES: 4F's Luncheon 1/29 at Nino's. Bridge "20 questions quiz/instruction" program, 8:30 AM, 1/29 at St. Mark's Library. Photo Club, 1:30 PM, Thursday, 2/17 at Lapham. Amateur Chef's Luncheon, 2/17 at Lapham. Other activities as usual.
COUTH: CIA Italian Restaurant, Tuesday, 2/9, $50/pp, depart St. Mark's 9:30 AM, return 3:30-4:00 PM, still a few openings. New York Philharmonic rehearsal, luncheon at Josephina's, Wednesday, 3/10, $80/pp, depart St. Mark's 8:00 AM.
HUMORIST: Bob Moylan told about St. Peter's quiz for Forest Gump's entry into Heaven: what 2 weekdays begin with T, how many seconds are there per year, and what is God's first name (Forest's unique, but passable answers at bottom of this page)?.
SPEAKER: Vice President Brian Hollstein introduced Phil Restifo, president and CEO of Haveland Estates LLC (a property investment/management concern), who spoke on the outlook for commercial real estate. Phil described the various properties classified as commercial real estate and the major functions of ownership and finance, the latter including debt options, capitalization, and securitization. More securitization (i.e. up from $55 to $279 billion in 10 years) has raised the complexity/risk level. The gap between sellers' valuations and buyers'/lenders' valuations has increased. The market is down 40 to 50%, more in some regions, which will wipe away billions of dollars. "Underwater" securitized debt was 16% in 2009, expected to rise to 36% in 2010 ($270 billion), 49% in 2011, 63% in 2012, 61% in 2013, and 57% in 2014. Why? The Federal Government has avoided an aggressive regulatory role. Now loans are frozen with multiple effects (i.e. record bank failures, some investors wiped out, some State pension funds devalued resulting in tax increases, etc.). This situation is not driven by over- building. Fresh capital is needed for an escape from deleveraging and further depressing of property values. In the end, expect: continued deleveraging, shedding of non-performing assets, clashes between levels of loan holders, higher interest rates, higher equity requirements, and higher cap rates. Also, public REIT's will do well, recovery will be varied, CD securities market will return with more restrictions, institutional money managers relationship will be getting closer to assets, and international investors will be back. Those who have cash should have some great opportunities! The Q/A covered many subjects, including residential real estate, effects of higher interest rates, cash investment options, outlook for REIT's, long term vs.momentum investing, troubles in Dubai, commercial real estate lending by insurance companies and private equity groups, risks with high Federal debt, rising rent levels, and Chinese real estate investing.
Don Hudson, Assistant Secretary
Forest's Answers: (1) Today and Tomorrow, (2) 12, that is Jan. 2, Feb. 2, Mar. 2, etc. and (3) Andy, as in the hymn "and He walks with me, and He talks with me, etc.".