Gary E. Mozer, Principal/Co-Founder of George Smith Partners participated as a guest on the podcast, Capital Markets Today with Louis Amaya. Gary talks about the advice he gives his best clients regarding mitigating risk and talks about his economic sentiment for 2019.
Click here to listen to the show focused on Structured Debt/Equity CRE Financing.
Louis Amaya: You had mentioned taking different types of risk. Do you see that as speculation in today’s market, as we maybe head into something that is at least a stabilization of the growth that we’ve been seeing?
Gary E. Mozer: When interest rates increased so much in the last 12 to 18 months, you had a little bit of a dislocation in the marketplace because different people perceive different risks. Some people think there’s cycle risks. Some people think there’s product risks. Different people underwrite and perceive the risks and price them differently. Some people say, “Oh, this retail deal, it’s retail so I don’t even want to do it.” Another guy says, “Oh, it’s retail and I’m concerned about it because it’s still retail.” Another guy says, “Oh, this is the right real estate with the right sponsor and the right market with the right business plan and we’ll price through the marketplace.” The inefficiencies in the marketplace is all about the perception of risks. Different people have different perceptions of risks. Some people said multifamily was the best product to be in. Some markets are being overbuilt and therefore the rent growth is slowing. The absorption is slowing. Multifamily is still a great product to be in, but you’re going to have to change your parameters of how you price and structure those risks.