CBRE 2Q17 Earnings Call Notes

Bob Sulentic – President and Chief Executive Officer

Leasing market lighter than we expected

“Even though the economy is generally doing nicely, there is a couple of things going on. In general, corporations are being very careful about costs. We are doing it and so are the other big corporations around the U.S. and around the world. And secondly, in a few markets, there have been limited circumstances where leases would have otherwise gotten done, but there was inadequate big blocks of space to get them done and so that’s had a bit of an impact. But I would say it’s just a slight turn back from where we thought it was when we last reported.”

In general the market is solid

“We are – in general, the market is solid. Investors are very interested in commercial real estate around the world and there is a lot of capital. We are not expecting a material change in activity in the second half of the year. The first half of the year was okay. We expect the second half of the year to be okay and that’s kind of what our guidance suggests in our commentary on where we think the sales activity to be for the year.”

CBRE 1Q17 Earnings Call Notes

Robert Sulentic – President and Chief Executive Officer

James Groch

Market moved away from reasonable EBITDA multiple for acquisitions

“Since late 2015, we have repeatedly noted that M&A and recruiting had become pricey and less disciplined just as the industry was beginning to experience lower market transaction volumes. The market had moved away from our long stated five to six times EBITDA multiple for infill M&A.”

Starting to see hopeful signs of greater discipline

“I should note that we are now beginning to see early hopeful signs of greater discipline around M&A in the market. With regard to recruiting and retention, our disciplined approach is working. Top professionals are continuing to elect to join CBRE and remain with us because our operating platform scale brand and ability to deliver integrated solutions enabled them to do more for their clients.”

Slow but longer cycle

“capital rising has been very, very strong for us and I would say continues to be on a fairly consistent basis. We are seeing maybe as that investor just being careful and thinking about where they’re investing in aware of the fact that were we’ve been in a slow but longer economic recovery than prior cycles that this cycle feels a bit different, but the flows of capital into our investment management business you know have continued quite strong. I think we’ve mentioned we’ve raised $8.4 billion of equity in the last you know trailing 12 months which is pretty consistent with what we’ve been doing on average for the last few years.”

UK is making a nice comeback

“Well, industrial is strong Brandon, and in general the UK is making a nice comeback. I mean we are seeing good activity there. I think we had a recent survey of clients that showed that London once again was the favored destination for international capital among all major markets around the world. So I would say positive trends and nothing about what’s going on with the Brexit situation are giving us major concerns now, and if I were to spike out a property type, it would be industrial for particularly good news.”

Vornado 4Q16 Earnings Call Notes

Steven Roth

Still feel like it’s the time in the cycle that smart guys build cash

“A word about acquisitions and dispositions. While we have invested $606 million in developments and in other internal growth initiatives, interestingly, we made virtually no external acquisitions in 2016. This fact is a testament to our belief in what I have said repeatedly on recent calls, that the easy money has been made for this cycle, that asset prices are high well past the 2007 peak, that it’s a better time to sell than to buy. And most importantly, that now is the time in the cycle when the smart guys build cash.”

I know President Trump a long time

“I mean, my role at Vornado is my day job. It’s my night job, It’s my passion. I know President Trump. I know him for a very long time. We have had dealings together. We know each other. I’m honored that he has asked me together with Richard LeFrak to be an advisor to him and the administration with respect to infrastructure matters. Infrastructure matters are not political. Everybody – every citizen of America wants interest – our infrastructure to be robust to be in a good state of repair to be good. So that we can be competitive and we can have the right quality of life, et cetera.”

Retail is soft

“First of all, I have said on the – on calls for the last year or maybe even longer that retail is soft. It continues to be soft. Rents are not rising asset. And in many instances, rents are falling. And as I’ve said before, we are in the – we are in the realism business and we will meet the market and rent our space.”

David Greenbaum

Trump good for NYC

“Let me now turn to the question on everyone’s mind. What will 2017 bring? What I will say is that our confidence in the continued economic vibrancy of New York has never been greater. One of the stated economic priorities of the new Trump administration is financial services deregulation. The administration’s efforts in this regard could have a significant and positive economic impact for the city.”

Financial services expanding again

“Since the election of course there has been a marked shift in the mood around major financial institutions. While that mindset may take some time to be captured in job numbers, there certainly is reason to believe that we may once again see increases in financial services employment here in New York with important implications for the real estate market. That is just one example of how federal policy could benefit New York. Whether it is the repatriation of overseas profits, lower tax rates or increased federal investment in major infrastructure projects such as the trans-Hudson gateway project, the prospects for the local economy are bright”

Michael Franco

Foreign capital continues to be a primary driver of investment sales

“Foreign capital continues to be a primary driver of investment sales, making up almost 40% of the activity last year and remains a strong underpinning going forward. Foreign investors continue to have a strong desire to invest in the U.S. with New York City as the number one target. Most are still in the early stages of doing so, and assets like Vornado’s are their favorite investment.”

Financing markets are wide open but construction markets are a little tighter

“Turning to the financing markets. After periods of volatility in 2016, we are now open and liquid, especially for blue chip sponsors like Vornado. While the 10-year Treasury is up 60 basis points since the election, CMBS spreads have tightened and risk retention has been the Y2K of real estate finance, a non-event on large loans. Overall, we are seeing active bidding from all types of financing sources. CMBS lenders, life companies, balance sheet lenders and foreign capital all of which is good for borrowers. On the other hand, the construction loan market has gotten quite a challenge for all, but the best sponsors, which we expect will help reduce supply going forward.”

CBRE 4Q16 Earnings Call Notes

Bob Sulenic

No material impact from higher interest rates

“Yes. David, it may have had a slight impact on the appetite in the pricing, but not a material impact. We still see a lot of capital that wants to go into real estate. If you look at last year, there was various press written about lower volumes, but it’s worth keeping in mind that, that’s relative to 2015, which was the strongest year in a decade and last year was still very, very good by comparison to the previous decade other than 2015. We are going into this year with the assumption that interest rates will go up modestly and that capital flows into real estate and trading velocity will be similar to last year.”

Generally expecting a good year in 2017

“we saw choppiness earlier in the year, but the fourth quarter was strong and the year as a whole looks strong and we expect that to be a similar circumstance in 2017. We expect to see volumes similar to what we saw in ‘16. We are hoping and expecting to take a little market share as we have over the past few years. And as I commented earlier, with regard to the interest rates, they will probably tick up a bit. That may put a little pressure on sales. But also, there is a circumstance out there where in general, institutions are under-allocated to commercial real estate by about 100 basis points relative to where they want to be. So that could be a positive impact. So in general, we are expecting a good year and we are expecting to perform well and take some more market share.”

Jones Lang LaSalle 4Q16 Earnings Call Notes

Christian Ulbrich

Brexit vote has created uncertainty for real estate portfolios

“It is too soon to know just how Brexit, the new U.S. administration and other global political uncertainties might affect our own business. Still, it is fair to say that the Brexit vote, in particular, hasn’t created an environment which encourages our clients to take long-term decisions around their real estate portfolios.”

Development in UK has been exceeding our most negative expectations

“As we have outlined, we believe that going forward the transaction volumes will stabilize in the UK on that lower level what we have seen in 2016. We have already quietly not replaced people who were leaving us and have reduced a little bit on the costs. So I don’t expect any significant need to have further reductions in that space in the UK going forward. Now we are staying very close to the situation in the UK, but though the development has been clearly exceeding our most negative expectations which we got for the Brexit but at the end of the day, we are very hopeful that pragmatism will take over and that things will play out fine for the UK going forward.”

Despite all the geopolitical turmoil, pricing for M&A is still very high

“You know what, I think despite all the geopolitical turmoil and other factors which would drive a bit of caution, pricing for M&A is still at the very high end of it and there isn’t really a sign that this is easing. Frankly, we are very focused going forward on integrating our 48 acquisitions we have done in the past. So we’re not overly concerned about the current price levels”

Investor sentiment remains positive for real estate

“Investor sentiment over the course of 2016 went through a bit of the cycle. We saw during the course of the year a bit of an increase in caution. So when you usually had six or eight really strong bidders for a building, it kind of went down to maybe two or three. But at the end of the year, November-December, was very strong again with a very intense competition, and the way we see generally starting, this trend is continuing. So, I think, as I alluded to in my earlier comments, the attractiveness of real estate in that current environment is still very, very high, and we see an increase in allocations and that will at the end just drive further investor sentiment. Now we have to watch a little bit the interest rate environment, but it is incredibly hard to predict. We may see a bit of an increase in the U.S., but we believe still only to an extent which will not change that underlying positive trend for real estate. And with regards to other currencies, I can see very little reasons why these interest rates in those currencies should increase significantly. So, going forward, we are still pretty positive about investor sentiment.”

Time to close is longer though

“Well, frankly, that is not really the case. Because people are slightly concerned about where we are in the cycle, they are taking really their time to come to their final decision, and in contrary to maybe previous years, people are not accepting to be pushed into a decision. They rather walk away from a deal. Now, as I said, we tend to have more than one bidder. That is okay, but the cycle – the time cycle of closing a deal is continued to be slightly longer than we have seen it in 2015 or 2014, and frankly we don’t expect that to change in 2017.”

Christie Kelly

Capital markets revenues down 20% y/y

“Capital Markets revenues for the fourth quarter declined by 20% year over year. Performance reflects the slowdown in investment sales activity and softer investor sentiment, particularly in the UK where market volumes were down 39%. Excluding the UK, Capital Markets performance was comparable to the exceptional prior year in total.”

Jones Lang LaSalle 2Q16 Earnings Call Notes

Jones Lang LaSalle’s (JLL) CEO Colin Dyer on Q2 2016 Results

No Brexit impact outside of UK

“We anticipate that capital markets activity in the UK will rebound once buyers and sellers can agree on pricing that could happen relatively quickly. Leasing recovery may take longer since corporate occupiers who hesitate to make occupancy decisions until the politics of Brexit voting clarified. Such things as passporting, employee rights to work outside of their native countries and so forth. As I said that may take some time.”

” we have no indications that Brexit has impacted markets outside of the UK – not in Europe, the Americas, nor Asia Pacific.”

CRE has weathered year’s issues well despite more cautious tone from investors and occupants

“Looking globally across our markets, the world’s leading commercial real estate markets have weathered the years political and economic issues quite well even as investors and corporate occupiers strike a more cautious tone. We see no catalyst for a breakdown in fundamentals indeed we anticipate the slow economic growth environment continue to contribute to an extended cycle and a flight to quality in which gateway markets and prime properties can be expected to continue to outperform.”

Cycle seems elongated

“I’ve said in my remarks that interestingly this cycle seems to be elongated beyond where one might have expected. The interest rate – so take a few of the factors that you watch. Interest rates have not come off the floor that often helps to bring a cycle to a close. There is plenty of confidence, but quite sensible equity in the market.”

M&A markets are open

“we, first of all, are seeing M&A opportunities right across our business. As I said earlier on this is a point in a cycle where sellers are happy to sell because they believe pricing is fair, buyers such as ourselves have cash and confidence. So it’s a liquid market currently across the world. There are no regions where you can say that there is no M&A to be done.”

Christian Ulbrich

Increased caution will certainly affect full year volumes

“However, increased caution among those investors and corporate occupiers will certainly affect full-year volumes. We now see global market investment sales down by 10% to 15% compared with 2015 to about $600 billion. But even at this level, that translates to one of the most active years since we started recording global transactional activity in 2003.”

Jones Lang LaSalle 4Q15 Earnings Call Notes

Jones Lang LaSalle’s (JLL) CEO Colin Dyer on Q4 2015 Results

The noise has produced more cautious sentiment, but capital continues to be allocated to real estate

“looking at our markets, JLL research projects investment sales and leasing volumes to maintain a healthy pace throughout 2016. The noise in the news flow has produced more cautious investment sentiment at this point, but the amount of capitals that continues to be allocated to real estate indicates there’ll be no reduction in underlying investment flows.”

China is being boosted by growth in consumer and service sectors, which is good for us

“on China and given our leading market position, we have a good perspective on what’s going on there. The slow decline in manufacturing sector contrasts with continuing double-digit growth in the consumer and service sectors. The move to services is benefitting our business as it tends to drive demand for office, retail and warehouse space, particularly in tier one cities. The effect is less pronounced in our tier two city business, but overall, our revenues in China continue to grow in 2015 and we expect the same in 2016.”

We think the cycle peaks in ’17 or ’18, nothing has changed that point of view

“We’ve been thinking in terms of a cycle which will begin to peak in ‘17 or ‘18 for some time. So this puts us in the sort of third to fourth quarter of a four-quarter game. Nothing has changed that point of view.”

Given the amount of money that’s available to invest in real estate, there’s relatively safe harbor in real estate

“given the weight of money of both equity and debt that’s available to invest in real estate and given the appetite for real estate, there’s a relatively safe investment harbor given the problems of the fixed income and equity sectors.”

Stress in China is in the tier two and three cities

“No. As I said, I mean, we’re concentrated in the tier one cities and tier two cities. And what we’ve seen is that the, I mean, the switch that’s going on away from the traditional industrial base and towards services and technology companies. And the services and technology companies are intending to focus in the largest cities as I made the comments about the demand for retail, logistics and office space in those major cities actually being quite robust. Where there’s stress in China is in the peripheral tier two cities and in the tier three cities where the industrial base was focused and where you see a clear decline in activity. But it’s working so far in our favor and of course we’re the market leaders there. We are strongly profitable in the region and we’re continuing to grow and expand our teams.”

Investors were slightly more hesitant in Q4, but we also see underlying interest in real estate from all sources

“we’ve made the comment about Q4 last year being – investors being slightly a little more hesitant than they had in prior quarters. We’ve also underpinned our thinking for markets that will basically be at or slightly above 2015 levels in 2016. So I won’t repeat that. I think we’ll just watch this during the first quarter and a half of the year. We see underlying interest in real estate from all sources. We talk to institutional investors, any specific pension funds, for example, who are still raising the percentage allocation to real estate.”

At this point the fundamentals remain robust

“And for the amount of money that’s available to invest in real estate is undiminished. We’ll see how sentiment behaves in the first quarter and whether the point you make about the CMBS markets or other factors begin to weigh on investors’ confidence. But at this point, the fundamental point to continued robust market, it’s similar levels to 2015.”

There’s been a clear reduction in demand for leasing space in energy centers

“we’ve noticed across the energy centers like Houston and Calgary, for example, within the North American continent, clear reduction in demand for leasing space and with that, a reduction in appetite for investment sales in those markets simply because the level of demand has come off so rapidly.”

Debt is still freely available. Saw a cooling of demand at the high end in particular

“Yes, you can take the debt piece out of the equation. Debt is freely available and it’s still fairly conservatively underwritten my lending institutions. So no issue there. What we did see is something of a cooling in demand at the high-end, in particular, our investment sales markets, a bit more selective purchasing, buyers not chasing risk as much as they might have done earlier in the cycle. We saw transactions indeed tending to slow and that’s one of the reasons why Q4 was a little weaker because we believe that a lot of transactions went through the year end and we’ll continue to complete in Q1 of this year.”

Sellers’ expectations of price have continued to push upwards whilst buyers’ have become more hesitant

“And your point about the bid-ask spread is an interesting one as well because sellers’ expectations of price have continued to kind of push upwards whilst buyers’ willingness to pay those continuing increased prices have become slightly more hesitant. So when you put all that together and that’s sort of the demand mix that’s swirling around out there.”

The amount of money trying to find its way to real estate is still robust

“Come back to our other statement, the amount of money, equity in particular, seeking to find its way into real estate is still robust. If you take our own LaSalle business, the 56 billion of assets under management and over $10 billion of funds available to invest in real estate. So they won’t invest that foolishly but it’s going to get invested over the next two, three years selectively in markets around the world”

Vornado 3Q15 Earnings Call Notes

Business in NY continues to be really terrific

“Business in New York continues to be terrific, really terrific. We are enjoying robust demand from all matter of tenants, led by financial services and creatives in all of our submarkets and at record rents which are now 25% higher than expiring rents.”

We have said before that the easy money has been made

“We have said before multiple times over the course of recent history that we think that the easy money has been made we think that pricing assets in the marketplace are high. We’re not calling it top we’re not saying that they’re not going to go high, but clearly and the interesting inflection point in terms of value.”

Starting to see green shoots in Washington DC

“We’re still seeing the kind of vacancies and competition for spaces but we’re starting to see green chutes and as you said, you see some activity from the government, we’ve got a two year budget deal in place that kind of budget deal ends up giving us a certainty in the marketplace for people to move and I think that we’re cycling through some of the contractions that we’ve seen both from the government and the contractor side as a matter of fact we’re starting to see some contractor growth in different segments not just in defense but in other areas as well.”

The construction market in NY is inflating aggressively and costs are rising

“the construction market in New York is inflating aggressively and cost are rising. And even more important than that is there is there are enormous number of cranes in the sky. There is which are exceeding the capacity of the construction industry to deliver services. So there are handful of contractors who are expert in each traits and they those guys are running out of capacity. So there is a bidding premium to get timely delivery of products and services.”

We’re still seeing very good vibrancy in SF

“Listen there has been a lot of chatter in the marketplace that with some VC capital potentially drawing up and the IPO marketplace not being as open as it was that we’re seeing some pull back in terms of the tech tenancy and the San Francisco market. Our own experience has been that while there has been a lot of chatter and discussion about this we’re still seeing very good vibrancy in the marketplace.”

Trees don’t grow to the sky

“Trees don’t grow it in the sky and pricing has – the easy money clearly been made, pricing is very aggressive, I don’t know which way interest rates are going but people think that they are going up. I don’t know which way cap rates are going but 50% they can’t go much lower. So it seems that this is the time to begin to think about prepared for the next cycle. If you are in a position like we are running company like ours and you don’t stop thinking like that you are not being responsible.”

Jones Lang LaSalle 3Q15 Earnings Call Notes

High investor demand continued to compress yields

“High investor demand for real estate continued to compress yields or cap rates for core office assets in primary markets. Brussels, Paris, Stockholm and Sydney, all saw yields reduce by 25 basis points in the quarter”

Corporate occupiers are generally optimistic about near term prospects

“Worldwide, corporate occupiers are generally optimistic about near term prospects and many are actively planning for growth.”

Forecasting investment volumes at $750B for 2015

” For 2015, we are maintaining our full year forecast for overall investment market volumes at $750 billion and the market could surpass that to set new records.”

Leasing demand is increasingly being driven by growth plans

“Demand is increasingly being driven by growth plans rather than cost containment consolidation and just lease renewals. The deal pipeline is full, particularly in the U.S. And what had previously been a technology-led story, 2016 will see demand across a much broader spectrum of industry sectors, finance, professional services and insurance, just a few examples.’

CRE activity has remained steady in China’s tier one cities

“Let me make a few comments about China since it’s captured a lot of headlines recently. Despite currency and stock market volatility, commercial real estate activity has remained steady in the country’s tier one cities.”

The shift from a manufacturing to consumer economy plays to our strengths

“In addition, the shift from a manufacturing to a consumer and services-based economy plays to our strength in the service sector and our strength in tier one cities.”

The shift is producing challenges in tier 2 and 3 cities

“The shift in growth to services is producing some challenges in tier 2 and more so tier 3 cities. ”

Our view on China is that the government overshot slowing, and is now restimulating

“Our view on China is that the government overshot as it worked to slow the country’s economy in 2013-14 and then responded by re-stimulating it this year. We see the effects of those moves kicking in next year and finally with 2016 GDP growth projected to be near 6%”

In Europe the business environment is much more intense than overall GDP would suggest

“both Europe as a whole and France have been performing particularly well, even in an environment where economic growth is 1%, tops. And so it didn’t ought to be but it is. And I think what’s going on in Europe is that actually within the business environment and in particular within the real estate environment, activity is actually much more intense than the overall GDP numbers would suggest.”

The capital markets picture in Europe has been anomalous relative to GDP because it’s viewed as a safe haven for international capital

“The capital markets picture which was I think the focus of your question, again has been anomalous to what you might expect from the market, the overall economic growth picture, again, since 2010. And the reason is that the European environment as a whole and in particular the major gateway cities, are seen as being safe havens for international capital and offering solid returns and generally deep liquid markets should investors wish to sell their assets at sometime in the future. And against that background of attractive investment markets we’ve seen then this global upwelling of investment of equity capital trying to find its way into quality real estate. So you’ve got a huge volume of equity, adequate debt availability at sensible levels of underwriting against a relatively limited supply of quality space in the major European cities. And the two together have just driven these year-after-year record levels of activity.”

There’s so much capital that is keen to invest and it’s not skittish. There’s no signs that this is slowing up

“It’s just that there is so much capital that still is keen to invest and it’s not skittish. Let’s call the international geopolitical issues and security issues, some of the noise around what was in the Chinese domestic markets, do not seem to have impacted this tremendous, people call it a wall of equity, this tremendous level of demand for capital. And if you look at the inflows into private equity this year, by quarter in Q2 they rose from $80 billion last year to something like $130 billion this year. And that money hasn’t yet been put to work. So that will be going into the markets in 2016 and beyond. Then again, nothing that suggests that this is about to — I mean we are watching it very carefully, obviously. We’re watching the velocity of transactions, we’re watching the speed of transactions and the number of bidders. But nothing yet suggests that any of this is slowing up.”

The large sums of money are looking for major assets in major cities

“the real equity, the real large sums have been looking for major assets in major cities. And that’s our sweet spot… So it’s about concentration of large assets and quality buildings”

There’s a low level of supply compared to demand

“So the level of development work, speculative or built for purpose, is very low by historical and indeed global standards. So against that relatively low level of supply, you’ve got increasing levels of demand as companies clearly are ramping up their expansion plans. And so that suggests that there will be sustained rental increases across large swaths of the U.S. office market”

Vornado 2Q15 Earnings Call Notes

Business is terrific

“Business is actually terrific. As David will tell you in a minute, in New York we are enjoying robust demand from all manner of tenants, led by financial services and creatives in all of our submarkets and at record rents. Ditto for our largest and best-in-class Manhattan street retail business.”

We’re basically full in NY, Washington has bottomed

“In New York, we are basically full. In Washington, as Mitchell will tell you in a minute, green chutes are beginning to sprout. Washington has clearly bottomed. It’s beginning to come back. It’s just a matter of time.”

Rookies need not apply

“Let me leave you with a final thought, which bears repeating over and over again. Vornado and its management team are one of only a handful of firms who have the track record, have talent, relationships and trust in the marketplace to lease, acquire, develop, finance and manage million-foot towers and billion-dollars Fifth Avenue retail assets. It’s a complicated business. Rookies need not apply.”

NYC employment at all time high

“Total employment in New York City reached an all-time high of 4.2 million jobs. The unemployment rate now stands at 5.9%, down from 7.3% just one year ago. Importantly, office using employment also reached a new high of 1.3 million jobs, up 32,000 in the last 12 months.”

Not out of the woods in DC but things are turning positive

“With regard to the real estate market in the D.C. Metro area, while we’re not out of the woods, the news is turning positive. For example, JLL’s second quarter report on Northern Virginia reads, market posts strongest net absorption since 2010. As Steve mentioned, we can now see the green chutes.”

The easy money has been made this cycle. Smart guys are starting to build cash

“we have said over the last few quarters that we think asset prices are high. I have said that I think the easy money has been made in this cycle. I have said that this is a time when the smart guys are starting to build cash. I’ve had a handful of very, very smart guys jump on top of that comment and say they agree with me.”

We do acquisitions very carefully in this point of the cycle

“And I have said repeatedly that we do acquisitions very carefully at this point in the cycle. In each quarter we announce one or two acquisitions. If you look at the nature of what we’re doing, they are generally what I would call bolt-on acquisitions. They are right in the neighborhoods that we are targeting.”

We are always looking but elephant hunting is difficult in this market

“we are always hunting. We are always looking. We are always tasting. But elephant hunting in this market is really difficult, because prices are really high.”

80% of 55m annual tourists to New York are Americans

“We don’t have yet the tourism statistics recently, but I believe that there is a slight, I’m talking about really slight diminution in tourism. Now, you have to remember that there’s 55, I think million tourists that come into New York last year at the running rate 80% of which are domestic tourists. So those are not affected by the change in, by the strength or weakness of the dollar. So it’s 20% of that tourism cohort, which would be, let’s say, 11 million or 10 million individuals. And so at the margin, it’s not going to be that significant. We do know that tourism is still continuing to be on the rise, because the wonders of New York continue to attract people from all over the world.”

Retail rents have gotten very high, number of tenants looking for space is starting to decline

“I think retail rents have gotten to be very high and I think that landlords will — and the number of tenants cruising, looking for spaces at these very highest in cycle rents are starting to decline.”

I sense in my belly that rents have gotten to the top of the market

“that’s a long-winded answer to say basically that I sense in my belly that rents have gotten to the top of the market and we are in the business of realism, not hoping, and we are in the business of making deals. The deals that we’re making have extraordinary mark-to-markets so they’re pretty darn good.”

Major oversupply of hotels in NY

“yes, the hotel business in New York is soft. I think the folks tell me that New York is the only hotel market in the United States which has negative comps. I mean which is pretty startling, because it is the principal tourist attraction in the United States. But what’s going on in New York is just oversupply, oversupply, oversupply. ”

Our shares sell at a pretty significant discount to private market values

“With respect to the fact that our shares, together with almost everybody’s shares, sell at a pretty significant discount to the private market values, and what we’re going to do about that, the answer is, is we together with every management team in our industry is trying to figure that out right now.”