EDG Annual Real Estate Breakfast

The Annual Economic Development Group Real Estate Breakfast is held every year in June. Please join the South Metro Economic Development Group and hundreds of other business and community leaders for an insightful and entertaining national and local overview of what is really driving real estate and where the smart money is going. We are excited about this year's panel discussion which should provide a great look at the local and national real estate scene and what we can expect in the future. 

14th Annual Real Estate Update Breakfast

"Its the End of the World as We Know It?"

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The South Metro Denver Chamber’s annual real-estate breakfast Wednesday morning seemed to have dire overtones from the start, based on title alone: ‘It’s The End Of The World As We Know It?’

Some may even argue that a question mark is unnecessary, given the current economic landscape.

A distinguished panel of experts in planning and development, capital investment and commercial real estate didn’t exactly argue that assessment, either, during the program before a crowd of about 450 business leaders from the banking, real estate, construction and development industries at Marriott Denver Tech Center.

“We’re all hanging on by our fingernails,” Byron Koste, executive director of the University of Colorado Real Estate Center, admitted.

The reality exists that a further free-fall could be imminent, with capital investment and demand already slowing to a trickle and companies struggling with cash flow issues, but so could a way to eventually claw back to solid ground within the industry. And while serious questions remain, including a potential influx of commercial debt into the system, there may be opportunity to regain equilibrium, if short-term gain is avoided as the practiced methodology.

“We believe real estate is not dead but is in a transitional siesta” said Nicole Ament, the current chair of the South Metro Denver Chamber’s Economic Development Group, which organized the 14th-annual event, which was moderated by the Denver Post editor Greg Moore.

Given the stress created by the current commercial market, the answers offered and questions asked during the breakfast -- held in conjunction with the Chamber’s Economic Development Group -- were important. So, too, may have been the cathartic nature of getting the problems further into a public forum and interfacing with others in similar positions, with common concerns.

“Even in the end if there’s no cosmic conclusions, it does help to hear the issues aired,” said John Greenman, vice president of investments for Corporex Colorado, a financial firm specializing in commercial and residential development.

“I think the community and individuals realize that they’ve got troubles but they’re shared,” he added. “And I think for Denver, which is a very collegial community  business-wise compared to many I think it helps gives people a sense that while there are problems, there are people who are thinking about it and trying their best. … But it’s always better to know.”

And there is confusion. So-called “shotgun weddings” of banking entities and steep government intervention into the national fiscal crisis have made it difficult to know the players, never mind the playing field.  Many creditors currently are extending bad loans in order to avoid having to recapture the properties and incur a write-off on their balance sheets, the so-called ‘pretend-and-extend’ model. Little refinanci ng is being done.

There’s also an aspect of properties being traded as securities, resulting in no real borrower and lender.

“There’s a little bit of suspended animation right now,” said Greenman, a recent participant in the Economic Development Group’s legislative affairs committee. “And I’m not sure what breaks that logjam.”

In the Denver area, the 12-year FasTracks transportation project and other infrastructure improvements coupled with a continued commitment to the building of ‘green’ office projects were cited as potential parts of the solution to stimulate the commercial building industry, through retrofitting into ‘smart buildings’ has proven difficult.

“The nation is looking for the next breakout city,” Koste maintained, saying a project such as FasTracks can set up Denver as a first-tier city for the next half-century if done correctly.

“But,” he added, “if we blow it, somebody will take our place and it’ll be a missed opportunity.”

The real-estate forum wasn’t all doom and gloom for the Denver market. The area has proven relatively resilient in the commercial real estate sector over the last decade compared to national averages. There’s been much less reckless addition to supply than other markets, with discipline demonstrated both by developers and creditors.

Further, the area has received positive publicity nationally from hosting last summer’s Democratic National Convention and articles in such publications as the New York Times. The transit line additions to the southeast corridor have been a boon to the commercial building industry, as well, providing a strong test case despite reservations over investing in infrastructure without abundant capital sources.

But Koste stressed that climbing into a shell and waiting out the current climate isn’t necessari ly entirely appropriate, either.  He pointed to the decision to build Denver International Airport several years back as the type of bold decision that can achieve positive future gains and lead to Denver ultimately reaching ‘first-tier’ status.

“We may take it in the shorts a little short term but it’s what we have to do if we to do,” he said. “If we protect what we have and take the long view, we’ll be fine.”

The Real Estate Breakfast is one of several signature events sponsored annually by the Chamber, designed largely to connect local business and government entities in discussing issues and trends affecting the community at large.

Other key events include:
--- an Economic Forecast Breakfast, which considers future directions in the overall financial landscape;
--- Autoventure, recognizing the car industry;
--- Business Expo, a showcase of local goods and services;
--- and Small Business of the Year Awards ceremony, spotlighting the success of entrepreneurs.

written by Lee Rasizer
Chamber Communications Consultant

Pictures from the 2008 Real Estate Breakfast:

2008 Real Estate Breakfast - The Real DNC - Drawing New Conclusions

To learn more about the South Metro Economic Development Group visit the EDG page or contact Bart Sayyah at bsayyah@bestchamber.com or call 303-795-0142.