Robert Pliska

The Year Ahead in Commercial Real Estate
As we look forward to a new year, I am pleased to share my thoughts on the very memorable 12
months past, and to offer my outlook for the commercial real estate market in 2012. Before I do, I
would be remiss if I did not thank the Sperry Van Ness clients, Advisors, staff, and fellow brokers
for their contributions in driving us forward in spite of the unpredictable times. I know that I speak
for all SVN Advisors and staff when I wish you a prosperous New Year.
A Year of Fits and Starts for Commercial Real Estate
During a year of extraordinary economic and political uncertainties, commercial real estate held
its position as a crucial safe haven for investors in 2011. Investment into the sector reached a
peak in the second quarter, supported by CMBS conduit originators and more active life company
and bank lenders. Even as economic and employment trends fell short, leasing activity for wellpositioned assets strengthened. During this period, investment into segments of the market that
had lagged during 2010, including commercial properties in secondary and tertiary markets and
value-add opportunities, showed signs of firming, as well.
In spite of the rising momentum, commercial real estate investors revealed they were not entirely
immune to the obstacles facing the wider recovery in business confidence. As I suggested in my
New Year’s message one year ago, this has been a period of fits and starts. Over the summer,
renewed disruptions of capital and credit that were largely unrelated to the property sector threw
the conduit into disarray and slowed the pace of transaction activity more broadly. For many
borrowers, lending sources pulled back once again, with the result that a larger share of pending
sales has struggled to reach closing.
While sales volume in the third and fourth quarters will not
match the spring’s flurry of trades, the shifts in the market must
be understood in the context of a turbulent economic and
political environment. Where investors have retrenched, it is
often under the force of external pressures. It nonetheless
remains clear from the current diversity of investors and lenders
that commercial real estate is high on the investment hierarchy.
In fact, many of the last twelve months’ most notable and most
visible deals only came to fruition as the year drew to a close.
The fundraising activities of the major REITs support this
assessment, as well. US REITs raised $37.5 billion in equity in
2011, a new record that easily surpasses the previous high of
$32.7 billion set in 1997. They raised another $13.8 billion in
unsecured debt.
A Persistent Imbalance
In the final tally, investment sales in 2011 will easily surpass the $120 billion benchmark set in
2010 and will roughly triple the record lows set in 2009. As a wider range of buyers and sellers
have reengaged, pricing in the most actively traded markets has exhibited the sharpest
improvements. In the extreme, some highly coveted trophy properties have prompted aggressive
bidding by domestic and cross-border buyers and have ultimately sold at higher prices than
during the market peak in 2006 and 2007.
While the most visible investments affirm institutional investors’ confidence in the sector, they
offer only one perspective on the market. As I pointed out at this time last year, the headline
statistics do not fully convey the unevenness of the recovery or the diversity of its investors. The
market for assets that do not dominate their respective cities’ skylines is necessarily recovering
along its own trajectory. In the current market, that has meant a balance of tailwinds and
headwinds that has weighed in favor of the latter.
Core investors whose scope may be limited to a subset of metropolitan areas have argued that
rising prices and falling cap rates will inevitably spill over into other segments of the market. In
one respect, this is correct. Yields on mid-cap investments are higher than for any trophy
property. But that assessment also overlooks the uniqueness of the market for small- and midcap commercial properties and the very different makeup of the investor and lender base.
Understanding these differences is crucial to assessments of what the next year will hold for
commercial real estate.
The Economy, Jobs, and the Political Deadlock
As in previous cycles, the recovery in small- and mid-cap
property investment is proving more sensitive to underlying
drivers of cash flow than the market for the largest properties.
This inevitably means that a strong economic recovery will be
one of the requisites for more robust investment. While
companies have seen their profits rebound, surpassing their
previous peaks from 2007, an environment of extraordinary
economic and political uncertainty has constrained decisionmaking and investment in new tools and people.
In the first days of 2012,
the employment outlook
looks brighter. For
commercial real estate – and for millions of families across
the country that have struggled with unemployment – this is
the critical missing link to a more balanced recovery.
Although the data on job creation in 2011 only shows a
modest improvement over the prior year, leading indicators
of firm hiring have turned more positive. Job openings have
been trending up consistently over the last year. More
recently, first-time applications for unemployment insurance
have fallen back to their lowest levels since early 2009.
Further, employment gains in temporary help services have
picked-up over the past 5 months, which lends well to
permanent job creation. Even though single-family housing
shows no definitive signs of an inflexion, other metrics
indicate that marginally stronger growth in 2012 will support a healthier pace of private sector job
creation.
Regrettably, an environment of political dysfunction qualifies the outlook, both at home and in
Europe. In fact, the latter presents one of the most credible threats to global growth. In the United
States, the uncertainties presented by unusually intrusive policymaking may resolve over the next
year, given the need for all parties to clarify their political positions and objectives as Election Day
approaches. Needless to say, a business environment where the rules of the game are more
predictable is more conducive to growth and job creation.

Investment Sales and Financing
As much as it depends on a stronger economic trajectory, the outlook for small- and mid-cap
investment also relies on buyers’ access to financing. In financing their investments, large REITs
may offer shares or issue unsecured bonds; trophy investments have also been supported by
favorable lending terms from life companies and large international banks. These scenarios are
not reflective of the market for smaller assets where the sources of risk and its mitigating factors
can be very different. Given the historically dominant role of regional banks and CMBS lenders in
facilitating this segment of the market, these lenders figure prominently in the assessment of what
the next year will hold.
Although the CMBS market has struggled to reassert itself since last summer’s interruption, plans
for new issuance in the first quarter of 2012 indicate a gradual increase in conduit origination
activity. Surprising as it may seem, stability in global bond markets is an important condition for
well-functioning CMBS markets, since the spreads on the latter’s bond yields are influenced by
corporate bond market trends, as well. In the first half of 2011, more than half the CMBS loans
securitized had origination balances of less the $10 million. It remains the case that a more active
CMBS market is required for the small and mid-cap segments to flourish, in particular, as a large
number of seasoned CMBS loans mature over the coming year.
Outside of the apartment sector, where
generally improving fundamentals and the
contributions of Fannie Mae and Freddie Mac
are facilitating both sales and new
development, commercial property investors
are dependent on bank financing given an
absence of other debt sources. For the last
several years, that has presented a problem.
Banks have been preoccupied with the
management of their distress portfolios and
have hesitated to extend new credit, even in
the best of cases. The most recent data
show those priorities changing. Banks’ default rates on their commercial and apartment loans
have fallen consistently over the last year. Coinciding with the stronger performance of the legacy
balance sheets, many banks are accelerating the liquidation of bad loans and real estate-owned.
A growing minority are lending again, increasing their exposure in segments of the market where
an absence of competition and low interest rates are affording opportunities to extend credit.
Improvements in bank lending and CMBS issuance will have a disproportionately positive impact
on the mid-cap market. Access to historically low-cost credit in 2012 and the likelihood of higher
interest rates in 2013 signal an unmatched window of opportunity for acquisitions over the next 12
months.
Conclusions
The economic and jobs outlook is improving. With so many of the underpinnings of a stronger
recovery in place, we can afford a degree of optimism. Politics and the possibility of external
shocks, primarily from Europe, still qualify that optimism.
While prices in the largest markets have recaptured a significant share of their lost value, other
assets have lagged the headline measures. Combined with historically low borrowing costs, there
is tremendous upside potential for borrowers with access to financing who can identify wellpositioned assets.
While the process has been frustratingly slow, more banks are moving distress off their balance
sheets. This process has the potential to accelerate in 2012, given banks’ stronger positions
generally, an evolving regulatory environment, and the potential for distress from maturing CMBS.
That will create some pressures on the market, but it should also deepen the pool of distressed
assets and notes for sale.
Attention will necessarily turn to the small and mid-cap market as the economy improves and
financing options broaden. Given our experience in this arena, we are anticipating a high volume
of advisory work to identify and market investment opportunities before consensus firms. Timing
will be the crucial differentiator in this market – the intersection of low-cost financing and firstmover advantage demands that we act deliberately

Using Quotes to Achieve Success in Business, Investment, Residential and Commercial Real Estate – Part V

By: Robert J. Pliska, CRE, CPA

Investment, residential and commercial real estate and business in general has been trying in the last few years. An area that may help you as a real estate owner, investor and/or broker/advisor is to improve your attitude and your mental psych as we progress to the road to recovery. A way to do this is to latch on to a few quotes that you feel appropriate to keep your enthusiasm up, provide momentum to get through a crisis, add a little humor to a difficult situation, use to close the next deal, provide impetus for a good return on your investment and any other way you see appropriate. This has helped many as investment and commercial real estate advisors and owners. After all, history has shown that many have gone through worse battles than we have experienced and they found a way to be positive and have the will and perseverance to continue forward and eventually achieve success.

As many others do, I "tweet" on Twitter. My handle is http://twitter.com/rpliska. I am also on LinkedIn http://www.linkedin.com/in/rpliska and Facebook. I use these quotes often to help my followers maintain a positive attitude and give them the will to proceed in difficult situations. Feel free to follow. This is Part V of four similar blogs primarily taken from tweets and LinkedIn posts recently posted (feel free to google “Robert Pliska quotes” for the other four blogs). They may assist you in maintaining a positive attitude and provide the will to continue forward for investment and sales success in investment, residential and commercial real estate. They all seem to have some relevance to real estate or success in some way. I am sure all of us can and will come up with many, many more.

“The longer you hang in there, the greater the chance that something will happen in your favor. No matter how hard it seems, the longer you persist the more likely your success,” ~ Jack Canfield

"You cannot swim for new horizons until you have courage to lose sight of the shore" ~ William Faulkner

"You don't have to swing at every pitch. When you are ready, it looks like a fat slow moving ball." ~ Warren Buffett

“I've always made a total effort...I never quit trying" ~ Arnold Palmer

"When you confront a problem you begin to solve it" ~ Rudy Giuliani

"If we wait for the robins, spring will be over" ~ Warren Buffett

"If you expect greatness, greatness shouldn't surprise you" ~ Justin Verlander

“A leader must have integrity, be a ‘servant leader’ (have the best interests of their followers at heart), is willing to make tough decisions and leads by example” ~ Dan Akerson, CEO, GM

"I learned that if you want to make it bad enough, no matter how bad it is, you can make it." ~ Gale Sayers

“Promise yourself that you will talk health, happiness and prosperity as often as possible; promise yourself to make all your friends know there is something in them that is special that you value; promise to think only of the best, to work only for the best and to expect only the best in yourself and others; promise to be just as enthusiastic about the success of others as you are about your own; promise yourself to be so strong that nothing can disturb your peace of mind; promise to forget the mistakes of the past and press on to greater achievements in the future; promise to wear a cheerful appearance at all times and give every person you meet a smile; promise to give so much time improving yourself that you have no time to criticize others; promise to be too large for worry, too noble for anger, too strong for fear and too happy to permit trouble to press on you.” ~ John Wooden

“I definitely need to use my chances when they come because definitely there won't be many.” ~ Roger Federer

“You’d better be picking up snow as you go along, because you’re not going to be getting back up to the top of the hill again. That’s the way life works.” ~ Warren Buffett

“You must come from love—of yourself, others, justice and the planet. I teach people to come up with a purpose statement, to live life in love and joy and not be abusing people or destroying the planet.” ~ Jack Canfield

“As a leader, it is our job to take measured and appropriate risks” ~ Patrick Doyle, CEO

“Be true to yourself, make each day your masterpiece, help others, drink deeply from good books, make friendship a fine art, build shelter against a rainy day , pray for guidance and give thanks for your blessings every day” ~ John Wooden

“And for the team, I always try to do the right thing" ~ Steve Yzerman

“Nothing you wear is more important than your smile" ~ Connie Stevens

“Baseball is simple. If you have good players, keep them in the right frame of mind, then the manager is a success." ~ Sparky Anderson

The person that said winning isn't everything, never won anything.” ~ Mia Hamm

"Politics and war are remarkably similar situations" ~ Newt Gingrich

"Don't let yourself be beat by superman" ~ Sparky Anderson

"Without labor nothing prospers" ~Sophocles

"I will never relent in defending America - whatever it takes" ~ George W. Bush

“I don't care about 3 yrs ago... 2 yrs ago....last year. The only thing I care about is this week.” ~ Tom Brady

"I am building a fire, & everyday I train, I add more fuel. At just the right moment, I light the match.” ~ Mia Hamm

"Some days you're the dog, some days you're the hydrant" ~ Unknown

"You know your talent. You know if you work hard, your hard work is going to pay off one day." ~Albert Pujols

“Mentally, the only players who survive in the pros are the ones able to manage all their responsibilities.” ~ Tom Brady

“If a team wants to intimidate you physically and you let them, they've won" ~ Mia Hamm

Hope some of these quotes help you in your role in business, investment, residential and commercial real estate!

Wishing you continued success!

ROBERT J. PLISKA, CRE, CPA RECEIVES THE PUBLIC SERVICE AWARD FROM THE MICHIGAN ASSOCIATION OF CERTIFIED PUBLIC ACCOUNTANTS

BIRMINGHAM, MI, October 3, 2011– Robert J. Pliska, CRE, CPA, Managing Director, Sperry Van Ness, Birmingham, Michigan was honored with the Public Service Award from the Michigan Association of Certified Public Accountants at the Townsend Hotel in Birmingham. Mr. Pliska received the award for his activities, accomplishments, impact on the community, commitment and innovation while providing outstanding service as a valued member of the profession. He has shown his continual substantial involvement with civic and community activities throughout metropolitan Detroit, the state of Michigan, and the United States. The award is given once a year. Mr. Pliska was nominated from 18,000 members of the Michigan Association of CPA’s.

Pliska has over 35 years of commercial and investment real estate experience. He specializes in the sale, leasing, financing, managing, consulting, accelerated marketing and auctioning of apartments, office, industrial, retail and hotel properties and has secured more than $1.5 billion in real estate transactions. Pliska served as president and/or officer of several commercial real estate firms. He also holds the prestigious CRE, the designation of an international group of very high profile professionals that includes members of prominent real estate firms. Only 1,100 practitioners throughout the world carry the CRE designation, denoting the highest recognition in the real estate industry.

His activities include, among others, being on the board for such organizations as the International Institute of Detroit, Childhelp USA, the Birmingham Bloomfield Symphony Orchestra, Holy Cross Children’s Services, Madonna University and Legatus. He has been supportive of many other organizations including Michigan Bach Festival (past president), Cranbrook Academy, Angel’s Place, Capuchins Soup Kitchen, Child Abuse and Neglect Council, Karamanos Cancer, the Parade Company, the Smithsonian Academy of Arts, the Detroit Symphony Orchestra, the Detroit Institute of Arts, Leukemia and Lymphoma Society, the Great Lakes Music Festival, Birmingham Community House, Variety, Hospice of Michigan, St Vincent de Paul Society, the Lennon Center, Cornerstone Schools, and many others. For further information see Robert Pliska

Additionally, he is active in many business related groups to improve his profession including serving as president of the Commercial Board of Realtors, the Communications Committee of the Counselors of Real Estate of the National Association of Realtors, the Communications Committee of the Michigan Association of Certified Public Accountants, International Board Member and Membership Chairman of an International CEO group, Life Member of the Economic Club of Detroit, Chairman and Treasurer of the Real Estate Answer Forum, Detroit Chairman of the Real Estate Cyberspace Society, Board of Directors of the Real Estate Roundtable, member of the Birmingham Bloomfield Chamber of Commerce, member of the International Council of Shopping Centers, member of the Association for Corporate Growth, member of the alumni association of Michigan State University and many other groups.

Founded in 1987, Sperry Van Ness is one of the largest commercial real estate brokerage firms in the United States with over 900 advisors in 150 locations. Sperry Van Ness provides advisory, brokerage consultation, asset management, property management, leasing, financial, accelerated marketing and auction services. To provide the highest value to its clients, Sperry Van Ness is the only national firm that in addition to marketing to investors and existing clients, implements an immediate proactive strategy to market all listings to the brokerage community sharing its fees 50/50. Guided by this principal of proactive compensated cooperation, Sperry Van Ness, based in Irvine, Calif., has advised clients on billions of dollars in office, multifamily, retail, industrial, hospitality and land transactions. For more information, please visit www.svn.com.

Using Quotes to Achieve Success in Investment, Residential and Commercial Real Estate – Part IV
By: Robert J. Pliska, CRE, CPA

Investment, residential and commercial real estate has been very trying in the last few years. An area that may help you as a real estate owner, investor and/or broker/advisor is to improve your attitude and your mental psych as we begin the road to recovery. A way to do this is to latch on to a few quotes that you feel appropriate to keep your enthusiasm up, provide momentum to get through a crisis, add a little humor to a difficult situation, use to close the next deal, provide impetus for a good return on your investment and any other way you see appropriate.. This has helped many as investment and commercial real estate advisors and owners. After all, history has shown that many have gone through worse battles than we have experienced and they found a way to be positive and have the will and perseverance to continue forward and eventually achieve success.

As many others do, I "tweet" on Twitter. My handle is http://twitter.com/rpliska. I am also on LinkedIn http://www.linkedin.com/in/rpliska and Facebook. I use these quotes often to help my followers maintain a positive attitude and give them the will to proceed in difficult situations. Feel free to follow. This is Part IV of three similar blogs. Attached are a few recent additional quotes noted on Twitter and LinkedIn that may assist you in maintaining a positive attitude and provide the will to continue forward for investment and sales success in investment, residential and commercial real estate. They all seem to have some relevance to real estate or success in some way. I am sure all of us can and will come up with many, many more.

"Don't wish it were easier. Wish you were better." - Jim Rohn
“It’s not the size of the dog in the fight, but the size of the fight in the dog" ~ Archie Griffin
"I always tried to turn every disaster into an opportunity." ~ John D. Rockefeller
“You don't earn loyalty in a day. You earn loyalty day-by-day." ~ Jeffrey Gitomer
"Someone's sitting in the shade today because someone planted a tree a long time ago" ~ Warren Buffett
“Faith is taking the first step even when you don't see the whole staircase."
"Show class, have pride, & display character. If you do, winning takes care of itself" ~ Paul "Bear" Bryant
"I learned that if you want to make it bad enough, no matter how bad it is, you can make it." ~ Gale Sayers
"Opportunities come from knocking on doors until they open" ~ Unknown
"If opportunity doesn't knock, build a door." ~ Milton Berle
"Adversity causes some men to break; others to break records." ~ William A. Ward
"The key is in not spending time, but in investing it." ~Stephen Covey
"Many an optimist has become rich by buying out a pessimist." ~ Robert G. Allen
“You don’t drown by falling in the water. You drown by staying there." ~Robert G. Allen
"If you've got the guts to stick it out...you're going to make it." ~ Brian Hays
"You can't go to bed on Tuesday as a lender & wake up on Wednesday as an asset manager" ~ Hugh Hilton, Alvarez & Marsal
"Don't confuse activity with productivity." ~ Benjamin Franklin
"If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem." - J. Paul Getty
"Everybody has to be somebody to somebody to be anybody" ~ Malcolm S. Forbes
"I start where the last man left off" ~ Thomas A. Edison
"Every situation, properly perceived, becomes an opportunity..." ~ Schucman & Thetford
“Victory belongs to the most persevering” ~ Napoleon
"Progress always involves risks. You can't steal second & keep your foot on first." ~ F. Wilcox
"I didn't have evil intentions, but I guess I did have power." ~ Harmon Killebrew
“Sometimes this game comes down to makes & misses." ~ Jeff Van Gundy, pro basketball coach
“No, you grunted. When you grunt you made an effort, and it counts." ~ Sam Snead, pro golfer on effort
“Opportunities multiply as they are seized...." ~ John Wicker
“Eighty percent of success is showing up.....early" ~ Michael Bloomberg
“I've always made a total effort...I never quit trying" ~ Arnold Palmer
"One person with passion is better than forty people merely interested." ~ E.M. Forster
"Nobody's irreplaceable including me" ~ Bill Ford
"Do right. Do your best. Treat others as you want to be treated." ~ Lou Holtz
"Horse racing features the highest of the highs and the lowest of the lows" ~ Al Michaels
“I've failed over and over and over again in my life. And that is why I succeed." ~ Michael Jordan
“When you confront a problem you begin to solve it" ~ Rudy Giuliani

Hope some of these quotes help you in your role in investment, residential and commercial real estate!
Wishing you continued success!

Using Quotes to Achieve Success in Investment, Residential and Commercial Real Estate - Part III

By: Robert J. Pliska, CRE, CPA

Investment, residential and commercial real estate has been very trying in the last few years. An area that may help you as a real estate owner, investor and/or broker/advisor is to improve your attitude and your mental psych as we begin the road to recovery. A way to do this is to latch on to a few quotes that you feel appropriate to keep your enthusiasm up, provide momentum to get through a crisis, add a little humor to a difficult situation, use to close the next deal, provide impetus for a good return on your investment and any other way you see appropriate.. This has helped many as investment and commercial real estate advisors and owners. After all, history has shown that many have gone through worse battles than we have experienced and they found a way to be positive and have the will and perseverance to continue forward and eventually achieve success.

As many others do, I "tweet" on Twitter. My handle is http://twitter.com/rpliska. I am also on LinkedIn http://www.linkedin.com/in/rpliska and Facebook. I use these quotes often to help my followers maintain a positive attitude and give them the will to proceed in difficult situations. Feel free to follow. A few months ago I wrote a similar blog. This is Part III. Attached are a few recent additional quotes noted on Twitter that may assist you in maintaining a positive attitude and provide the will to continue forward for investment and sales success in investment, residential and commercial real estate. They all seem to have some relevance to real estate or success in some way. I am sure all of us can and will come up with many, many more.

"I swing big with everything I got. I hit big or I miss big. I like to live as big as I can." ~ Babe Ruth

"In the darkest skies, stars are best seen" ~ Unknown

"Winning is like shaving. You do it every day or your end up looking like a bum." ~ Jack Kemp

"If I do something, it must be 100 percent. There can be no 99.9" ~ Dominik Hasek

"Success is not the result of spontaneous combustion. You must set yourself on fire." ~ Fred Shero, Hockey Coach

"I found out that if you are going to win games, you had better be ready to adapt" ~ Scotty Bowman

"It's not how many races you win that counts, but that you win the good ones" ~ C. Whittingham

"If Jack Nicklaus can win the Masters at 46, I can win the Kentucky Derby at 54." ~ Willie Shoemaker

"When you cease to dream you cease to live" ~ Malcolm S. Forbes

"A good player plays where the puck is. A great player plays where the puck is going to be." ~ Wayne Gretzky

"And that's the way it is...." ~ Walter Cronkite

"We make a living by what we get, but we make a life by what we give" ~ Winston Churchill

"You never miss the water until the well runs dry" - Irish Saying

"The best way to get, is to give" ~ Jeffrey Gitomer

"A good golfer has the determination to win & the patience to wait for the breaks" ~ Gary Player

"Golf is deceptively simple and endlessly complicated." ~ Arnold Palmer

"Golf is a game that is played on a five-inch course - the distance between your ears." ~ Bobby Jones

Today you may be drinking the wine, tomorrow you could be picking the grapes - Katie Couric

"Only those who constantly retool themselves stand a chance of staying employed in the years ahead." ~ Tom Peters

"The ones who want to achieve and win championships motivate themselves." ~ Mike Ditka

"Daily movements in the market do not reflect the true value of companies, rather the emotional temperature of investors." Warren Buffett

"Real buying opportunities are at the time of maximum pessimism - when the blood is in the streets" ~ Sir John Templeton

"Experience is the name everyone gives to their mistakes." ~ Oscar Wilde

"Show class, have pride, & display character. If you do, winning takes care of itself." ~ "Bear" Bryant

"Most people give up just when they're about to achieve success...one foot from a winning touchdown" ~ H. Ross Perot

"The time to repair the roof is when the sun is shining" ~ John F. Kennedy

As we express our gratitude, we must never forget - the highest appreciation is not to utter words, but to live by them ~ John Kennedy

"Time flies. It's up to you to be the navigator." ~ Robert Orben

"If you do the best you can...what can worry do for you? You are already doing the best you can" ~ Joe Namath

"A leader is one who knows the way, goes the way, and shows the way." ~ John C. Maxwell

Experience is a hard teacher because she gives the test first, the lesson afterwards." ~ Vernon Law

"Great moments are born from great opportunities" ~ Herb Brooks

Hope some of these quotes help you in your role in investment, residential and commercial real estate!

Wishing you continued success!