Just to give a glimpse of one off our real estate experts comments ...made more recently and given its NOT the whole sector that he's talking about but there maybe some positive things happening. Please make up your own minds...as we all know its a very serious situation...
WHEN Bill Grounds, an Australian real estate veteran, was invited to join the heavyweight Dubai property group Infinity World Development Corp (IWDC) he was ready to sign up.
But he did not want to work in a desert: "I meant Dubai. But I ended up working for them in Vegas," says Grounds, who was formerly at MFS, the Australian property investment group that was crunched in the credit squeeze in January.
Grounds is now the executive vice president of development for IWDC, a subsidiary of Dubai World, one of the Dubai Government's major entities.
His job as its point person on the ground in the US is to look for buying opportunities in troubled property markets and his targets include Nevada, Florida, Arizona and New Mexico.
"We are definitely seeing opportunities in the southwest, which has been one of the worst hit regions in terms of housing," he says.
"Potentially there are great opportunities there long term because it is a fundamentally sound market. It is a question now, of when do you get in."
Before working at MFS, Grounds was head of funds management business at Investa.
And earlier, he was at Lend Lease, during which time he was project director for the Olympic Games 2000 project and a director of Civil & Civic.
"There are many things I learned at Lend Lease that I still use today," he says.
"Such as, always ask the 'why' questions. I do, and I hear people say, that Aussie guy is always asking why!"
At Lend Lease he met Chris O'Donnell, who is now chief executive of real estate developer Nakheel, which operates under the umbrella of Dubai World.
Grounds says he is looking strategically in areas where developers may have overextended themselves and fallen victim to declining values and tight bank-lending policies.
Although the strong euro has made US real estate attractive to European buyers, Grounds says he believes foreign buyers can no longer be relied on because world markets have changed.
"It's not pretty," he says.
"We do not know if we will continue to see European buyers in markets such as New York."
He believes the US property market is "in a holding pattern".
Banks are in the position where construction loans cannot be repaid and property values are less than the loan amount.
"There are still many issues to move through the system as we saw last week with Lehman, Merrill and AIG," Grounds says.
"The consensus seems to be that it is going to be at least a year, maybe more."
He says in talking to banks, he is not hearing much positive news but the one thing that is clear is that there is more pain to come.
There is not a lot of lending around for buyers or developers.
But project funding is interesting as Chinese banks step into the breach US banks can't fill.
"There has almost been a changing of the guard with US banks," Grounds says.
"To some degree, Australia had tapped into that market because it had been in Asia a long time. US developers are learning they have to look outside their home debt market."
Grounds has been in talks with some companies that are not struggling and which have good projects in place.
"There are many strong real estate companies that are in a position to take advantage of the market and we would look to partner with companies such as these," he says.
Grounds is spending most of his time on two major projects that Dubai World subsidiaries have invested in over the past six months: a $US9 billion ($10.8 billion) CityCentre project in Las Vegas and $US1 billion project in Los Angeles.
A joint venture between IWDC and MGM Mirage, the CityCentre project is a massive hotel, condominium, dining, shopping and entertainment complex that is expected to open next year.
It contains four residential types and penthouses range from $US3.7 million to $US9.1 million.
"It is the largest private-sector development ever undertaken in the US and hopefully, it will be seen as the next evolutionary step on the Las Vegas strip," he says.
Dubai World is a major shareholder in MGM Mirage and the partners are looking at lots of other opportunities together in the US and elsewhere.
Grounds says although CityCentre's residential sales have slowed in the tough economy, he is hoping to supplement them with sales out of Dubai.
"CityCentre is an integrated mixed-use development designed by some of the world's greatest architects such a Pelli, Foster and Jahn," he says. "The quality of the residential offering far surpasses anything else in Vegas and this will work in our favour in the current market."
He says many projects in Las Vegas have been shelved, but that is working in his favour.
"It takes the pressure off in terms of construction pricing," he says.
"And we are about the only ones selling apartments so competition is coming off."
The mixed-use development Grand Avenue project in Los Angeles, near the Frank Gehry-designed Disney Centre, is a joint venture with the Related Group and Gehry is to design it.
"It has Gehry, who has stars status in LA so we are hopefully that this will help attract buyers," Grounds says.
"The project, in which IWDC has a 45 per cent stake, will include a Mandarin Oriental hotel."
But at present, Grounds is adjusting to living in Las Vegas. ...."
I was expecting some new news on 4 corners not a rehash.
