Thanh Bui

Thanh Bui

Managing Director at Clarion Partners

Thanh Bui
By November 8, 2021 9:00 AM

What’s the one thing you wish you’d known in March 2020 that you know now? 

Keep calm and carry on. There was not a lot to be calm about in March of 2020, and there were so many unknowns about how this would affect all of us. Twenty months later, the pandemic continues to play out in unpredictable ways. But, in those early days, real estate industry professionals were prepared for another global financial crisis and worried that a similarly protracted period for real estate decline would occur with COVID. What was surprising to many of us is how resilient the industry is, and how quickly the industry has bounced back.

Pick your poison (and tell us why you’d drink it): retail or hospitality?

Hotels will have a very solid long-term recovery. On the demand side, elevated leisure demand will persist for at least a couple of years if not longer, and there is the expected return of corporate transient and group business over the next 18 months. We also anticipate that rate recovery will be much quicker than previous downturns – special corporate rates did not decrease, as demand just disappeared with COVID. As a result, 2019 corporate rates have rolled forward, now into 2022. Similarly, a lot of group business has been rolled forward and rates did not decrease. We are seeing group rates for 2022 at higher levels than 2019. 

On the capital markets side, there is a lot of hotel money chasing not enough quality deals. Anything that has merit has multiple bidders. In our discussions with brokers, especially in leisure markets, or stronger markets that were earlier in the recovery (e.g., not the big cities like New York, San Francisco and Chicago), you are seeing deals trade at sub-7 percent cap rates on 2019 EBITDA after reserves. There were some trades in Florida that set records, and other markets like San Diego with deals trading at mid-6 percent cap range on 2019 numbers. The debt markets are also getting more comfortable with all-in rates in the 4.5- to 5.5-percent range for solid assets, albeit at 60 percent-ish LTV.

Where are you seeing the most competition for deals today?

We are seeing a lot of competition, as well as opportunity, in the industrial sector. We are being really creative and flexible with the way we finance industrial deals — we are doing land loans, acquisition-to-construction loans and stabilized assets at attractive proceeds and pricing if we have conviction about the asset. Industrial had a lot of momentum pre-COVID and has been a favorite asset class during the pandemic, but Clarion’s research team called an overweight on industrial early on in 2012. It is a highly competitive market, but given Clarion’s sizable equity and debt industrial portfolio of $28 billion, we have differentiated and proprietary market information in this sector that can help us evaluate deals quickly and thoughtfully.

New York City: “I want to be a part of it”?

I [heart] New York! I moved to New York City from the Midwest about 25 years ago, and have never looked back. I’ve seen this city go through some very tough times — 9/11, the global financial crisis, the pandemic — but New York and New Yorkers have always bounced back. It will take a long time for the city to fully recover, but we are seeing positive signs: government stimulus money is helping; restaurants are more crowded; Broadway theaters and concert halls are open (and also crowded!); the multifamily rental market has effectively recovered; and tourists have begun to arrive again. In another positive sign, hotels were at about a 60 percent occupancy level at the end of August. Although weekday subway ridership is down, the subway no longer feels like a ghost town, and it is actually quite full during rush hour. For New York to continue its recovery, we need the right business structure, political leaders and visionaries to create the kind of city where small and large businesses can thrive and that addresses the social and economic needs of its citizens.

What’s the most important initiative President Biden can implement for the real estate industry? 

Democrats and Biden are inching toward an agreed-upon framework to pass an approximately $1.8 trillion social safety net plan and a separate estimated $1 trillion infrastructure measure, although anything can change. There are many key proposals in this plan that would affect the real estate industry, directly or indirectly, including an infrastructure bill that has so many profound and compounded impacts on real estate. But there is $500 billion-plus to fight climate change, which is desperately needed. The plan also includes a blueprint for health care, education, construction of affordable housing and extending tax credit for parents, all important components to lift the middle class. We don’t yet ultimately know what the final provisions and tally are going to be, or the details of the estimated $2 trillion in tax increases on corporations and high earners, but this is an important step forward if the plan gets approved.

What keeps you up at night?  

Everything! It’s hard to predict what the future holds, especially the possibility of another variant that could take us back many steps. We all worry about the political environment in the U.S., climate change, social justice and the macro-economic concerns that affect everyone, particularly the real estate industry. These include issues related to the recovery of our big cities like New York — labor, supply chain and rising construction costs. It will take a lot of hard work to address these issues, but I’m hopeful too because there seems to be focus and urgency related to these concerns.

Lightning Round 

Stabilized or transitional assets?


First work trip post-COVID?


Fast-food guilty pleasure? 

Shake Shack.

“Ted Lasso” or “The Morning Show”?  

“Ted Lasso.”

Last book you read? 

“Maybe You Should Talk to Someone,” by  Lori Gottlieb.

“If I hadn’t pursued a lending career I’d be …”

A taste-tester.

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