Impact of the Commercial Real Estate Crisis
The commercial office market faces considerable uncertainty due to hybrid work. Soaring vacancy rates are causing significant losses in asset value. With rising interest rates, outstanding debt may exceed the value of these properties, forcing building owners to default on loans and walk away from these assets. This session will examine the impact of the commercial real estate crisis on state real estate strategy. We will examine the risks facing state governments who rely upon commercial office space to support their portfolio requirements. The discussion will also consider opportunities for States to take advantage market conditions that favor government tenants.
PRESENTERS:
Bruce Nelson is the Executive Director for Tennessee Real Estate Strategy. Bruce Nelson began his career with the Real Estate Strategy team in 2014 as Director of Special Projects. In 2019 he took the position of Executive Director of Real Estate Strategy and is a member of the Executive Leadership Team that provides guidance for 100+ real estate professionals within the division. Real Estate Strategy was established to create and maintain a sustainable real estate model through guidance and oversight of key strategic initiatives inclusive of developing annual strategic real estate plans for the general government portfolio. Working in tandem with all business units, the team optimizes the State's real estate portfolio. This includes location strategies for site selection, increased space/land utilization as well as marketing of surplus properties, finance/budget reporting, capital project prioritizations, data collection, metrics, lease prioritizations and GIS. Bruce has over 37 years of commercial real estate experience. He spent the first ten years of his career in construction financing followed by eight years in investment banking, private equity placements for real estate acquisitions and development. Prior to entering State government, he spent twelve years working for an owner operator that developed and managed commercial real estate. The experience gained over his entire career has linked him to all aspects of the real estate cycle – commercial debt, equity investments and development and management. By using his broad, yet fundamental core skills and industry best practices he brings a unique perspective to State Government Real Estate. bruce.nelson@tn.gov
Frank Smith was appointed Deputy Executive Director of the State Properties Commission in October 2009. Prior to that, he served as the assistant director for three years. As deputy executive director, Frank oversees the state’s real estate assets and develops the long-term strategies for a healthy real estate portfolio. Frank works with all agencies as well as the General Assembly in determining state acquisitions and dispositions. The deputy executive director also provides real estate guidance to the Georgia Land Conservation Council and the Sapelo Island Authority and serves as the SPC liaison to the Commission for Condemnation of Public Property, the Capital Asset Management Advisory Council, the Multi-Year Leasing Task Force and the Space Management Capital Asset Task Force. He began his career with the state in 2000 as a Legislative Budget Analyst for the Georgia General Assembly and was responsible for developing spending policies and priorities for the State’s annual multi-billion dollar supplemental and general appropriations act. In 2004, Frank accepted a position at the Georgia Building Authority (GBA) as Tenant and Lease Director. In that capacity he was responsible for the allocation of over 4 million square feet on Capitol Hill. Frank holds a bachelor’s degree in finance from the University of Georgia and a Master of Business Administration in real estate from Georgia State University. frank.smith@spc.ga.gov
Joe Delogu, is Principal and Founding Partner of FD Stonewater. Joe is a founding partner and an established leader in the real estate industry, with over 35 years of leasing, development, and investment management experience. Joe is a key part of the firm’s leadership team and brings a tremendous level of knowledge and technical expertise to the firm’s brokerage, investment, and development platforms where he focuses on providing strategic solutions and advising clients on transacting business with Governmental entities. He is also instrumental in the firm’s continuing education efforts and mentorship programs. Joe began his career with the General Services Administration (GSA), eventually moving to Spaulding & Slye where he founded the firm’s government division and was soon elevated to a Partner in the firm. When Spaulding & Slye was acquired by Jones Lang LaSalle (JLL), he was named International Director and Managing Director of JLL’s Government Investor Services group. He earned his B.A. in Political Science at Tufts University and later his MBA in Finance and Urban Development at George Washington University. jdelogu@fdstonewater.com