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As he did in thoss other downturns, he sees many opportunities to buy. His newesgt real estate investment , is looking to acquire another $250 milliom to $500 million in officee properties this yearin Honolulu, Los Angeles, San Diego and “If we did a lower that would be fine, and if we did the top that would be great,” said Shidler, who recentlyg sat down with PBN to discuss commercia l real estate investment. “I hope we do closer to the top number.” Shidler has been investing in commerciallreal estate, mostly office buildings, since he was a businessa student at the more than 40 yeards ago.
Since then, he has acquired or managed morethan 2,00 buildings through , of whichj he is founder and managing partner, and its affiliatec companies. He has moved quietly for most of that joining with other investors and building an impressiv portfolio that includes officed buildings from Manhattanto Honolulu, wherde it owns more office property than anyone. In one of the few occasionsa when he stepped intothe spotlight, Shidledr presented a $25 million gift in 2006 to his alma which renamed the University of Hawai business school the . He has sincs given almost $5 million more to the college.
who received a business degree from the schooklin 1968, has been a hands-on personally supervising the renovation of the businesx college’s buildings and even hiring a landscapingy crew to supplement the work of the university’s overworkedd grounds crew. And he still is a hands-o investor in Pacific Office Properties, an owner-operator of the properties it and is chairman of the board ofthe California-basedc real estate investment trust. The REIT owns seven buildings in including thedowntown , headquarters of The Shidler Group, whicy Shidler founded in 1972.
This year, despitre the volatile economy, he sees opportunity for the publicly tradefd Pacific OfficeProperties (NYSE AltNext: PCE) to add to its And there will be opportunity for other investorx who know how to spot a good deal. Shidlerf has some basic strategies for realestate investing. The firsyt is to stick with what you and the second isif you’re not physically in the market where you’re then partner with someone who is. “The local knowledge and ability trumps justabougt anything,” he said.
Knowing everything about the seller and understanding why someone needs to sell is also Even if Shidler has his eye on aparticula building, he doesn’t waste his time courtingv those who don’t want to sell or coaxinhg reluctant sellers into a deal. “The key is to figur e out, does it really make senser for that sellerto sell?” he said. “And if it then you can spend a lot of time workingt out the perfect type of transactiojn forthat seller.” As for Pacific Officer Properties, it’s not selling this year because it doesn’t need to Shidler said.
“If you don’t need to sell you probablyu shouldn’t sell in this market,” he said. “If you sell in this market it’s because you need to sell or have very speciao otherinvestment alternatives.” One thing to watcb for are REITs and other investorw saddled with heavy debt payments comingg due, especially in the secons half of the year. Shidlere predicts that will place pressurd on corporationsto sell, and that therd also will be pressure on bankds to sell the properties they have taken back. “kI think you’ll see an acceleration of sale s volume the second halfof ’09 that will be more than what we’vd seen in all of he said.
Financing still is the big hurdle. Loans of 75 percentg to 80 percent that were common just two yearsx ago have all but Investors seeking traditional financing todahy need as much as 50 percent equituy up front to securdea loan.
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