Wednesday, January 2, 2008

New year, new beginnings, new deals

Welcome to 2008. From the dirt side this should be a very interesting year. Looking into my crystal ball, I see opportunity of a different nature this year on my plate in CRE.

I don't think I will see many "Wall Street Journal" deals (my term for transactions that make the national or major local media) on my plate this year, while I had a bunch of them last year. And that is all right by me. Lenders have money but are still being very skittish about how they want to lend it, a la the beginning of the decade. I think this means for me more smaller, under the radar deals, and probably ones I relish. By this I mean deals with "hair": distressed parties, crazy mezz loans or equity kickers, major due diligence problems -- nothing routine.

The one thing about those deals is that they still require a lot of work, meaning I have to bill about as much as I would on a larger deal. In other words, legal takes up a bigger chunk of the budget.

What else do I see? I'm having a hard time with it today. It may be a post-Rose Bowl haze (sorry, Illini fans -- I felt like the lone Trojan in town cheering on my school.) We can already predict that 2009 will be a tougher year for landlords as new office developments come on line, but I think that, unless tenants can hold off on space until then, 2008 will probably be a decent year for landlords. I'm noticing that retail is finally slowing down, at least in more marginal areas such as the exurbs. (The report that Wal-Mart is not building near my house, however, is wrong. That building is basically done. Now, whether that means a Sam's Club is on hold is another story....)

I think, however, that retail will still be good in the trendier neighborhoods that are more recession-proof. Tell me building is going to stop near downtown, and I'll be hard-pressed to believe you. Out here in passport country, however, may be a different story. I see so much dirt under development, together with empty new buildings to match it, that it is almost scary. The absorption could take forever. And my eyes are open; I'm also hoping market conditions are such that we'll be able to do a little more investing this year.

On the law firm front, I expect my business to grow moderately, which is just right for me. I'll tell you more about that as the year progresses. On a personal note, I want to get my golf handicap below 20 for the first time. I broke 90 late last season so there's a glimmer of hope. And of course we all want to lose weight. I saw that Jeff Brown (one of my favorite, must-read bloggers) did it last year (albeit on a smaller scale than I need to), but that was enough to inspire me. The elliptical is right next to me in the home office and I will be on it again today and every day I work from home.

All right, I have babbled enough for one morning. Enjoy the new year! Let's have some fun, do some deals and make some money!


BawldGuy said...

Thanks for the mention, David. Make sure to update us on your weight's downward progress now and then.

By the way, have you been following the county assessor's fiasco on BloodhoundBlog?

I'd love to hear your take.