Yesterday, we documented the play-by-play of the Greek debt crisis. The prevailing thought was a country in turmoil is bad for the people, sure, but great for foreign investors, looking to swoop in and pick up assets at basement prices. Turns out, the prevailing notion could be wrong.
For the color, we turn to The Real Deal, which writes that the crisis could have little impact on Greece's real estate market. "The reality is that not much capital has gone into Greek real estate," said Borja Sierra, head of U.S. capital markets at Savills, adding that while international investors, such as Blackstone Group and Wilson Kennedy, might see some properties in other troubled countries like Italy and Spain lose value, "It's not evident that they’ve triggered sells."
Escapism Investment: Yay or Nay?
Meanwhile, from the sound of it, there isn't a long line of Greek investors looking to get there money out of the country post haste for seemingly safer placement, like in the U.S., for example.
Greece is top of mind for many hotel investors and will be a focal topic during the 2015 Mediterranean Resort & Hotel Real Estate Forum (MR&H), Nov. 9-11 at the NH Collection Madrid Eurobuilding. More than 40 industry leaders have already been confirmed as speakers, including: Taleb Rifai, Secretary-General of the World Tourism Organization; Hervé Louis, CFO of AccorHotels, Africa, Middle East, Indian Ocean and Caribbean Islands; Keith Evans, VP of hotel acquisitions for Starwood Capital Europe Advisers; and Federico J. González Tejera, CEO of NH Hotel Group. For a full listing of speakers, panel sessions, registration and further information on the conference, visit www.mrandh.com.
Here's what Corcoran broker Marie Shmon, a Greece native, who, according to TRD, regularly visits Athens and works with Greek clients, said, "Nobody has called to say, 'Masha, we need to get our money out of here.'"
Meanwhile, John Catsimatidis, the former New York mayoral candidate, owner of grocery chain Gristedes Foods, and also Greek by birth, likened the Greek crisis to a "pimple on an elephant." Which is to say, not a big deal, but rather a small blemish. Catsimatidis, nonetheless, is a New Yorker, through and through. "The United States is a stable environment. If anyone was going to invest money, what better place to invest it than the capital of the world, New York City," he proclaimed.
The opinion of some is that there won't be any new surge into the New York market, beyond what's already happened, from the likes of Asian investors.
"Are we going to see a surge into New York market? No," Sam Chandan, president of Chandan Economics and former chief economist at Real Capital Analytics, told TRD. "The forces that are pushing it have been in play for some time. This won’t be the thing that convinced new investors to diversify into U.S. real estate."
Contagion Part Deux
The real worry is that the Greek crisis is not contained and the world is subject to another contagion-style scenario, the likes of which we last saw when Lehman Bros. collapsed, sending global markets into turmoil. However, some believe this scenario won't play out this time around. Germany, for instance, hasn't wavered, argues Patrick Chovanec, chief strategist at investment advisor Silvercrest Asset Management. "It hasn't buckled, because they have a reasonable confidence that they can contain any impact from Greece," he said.
Conversely, if Greece does get what it wants—debt relief and less austerity—that could be a negative, notes Adam Kamins of Moody. "If the deal is much more favorable to Greece than we expect, that could have a contagion effect," he told TRD.
For the latest news on the Greece predicament, The New York Times has you covered.