Real estate investor Howard Lutnick, known for rebuilding Cantor Fitzgerald after his brother’s death in the 2001 World Trade Center attack, has reportedly been doing a lot of investing in commercial real estate lately, betting that the slow economy will not prevent property deal from thriving on low-interest money.
Lutnick’s firm Cantor Fitzgerald, 5,000 employees strong, cares about investing even in Philadelphia, where office space and leases have long been frozen, and is calling on landlords, media companies and those in possession of office space to build, move or sell to make way for new investors.
One of Cantor Fitzgerald’s goals is to finance Newmark Knight clients’ deals, perhaps by reviing the market for mortgage-backed securities, which froze up in the 2008 financial crisis. The company is also looking to develop what are called property derivatives contracts, which will allow tenants in local markets like Philadelphia to purchase financial protection against rent increase. Such contracts would also help landlords protect themselves from decreasing rents.
According to Lutnick, real estate is attracting enough interest to make profits, despite the fact that economic growth has been poor for years. Continuing low interest rates are good for the real estate business, where cheap borrowed money is a good avenue for those with the means to invest.
Commercial real estate investment requires a certain skill set and approach that not everybody naturally has, and it can be greatly helpful to work with professionals who understand the business, not only from a financial perspective but from a legal perspective.
Source: Philly.com, “PhillyDeals: Cantor Fitzgerald CEO comes to Philadelphia to talk property deals,” Joseph N. DiStefano, January 9, 2012