The Yale Alumni Real Estate Association Conference 2019 attracted nearly 250 executives, investors, and academics to the Yale School of Management on Friday, October 25, 2019. The conference was organized by the Yale Alumni Real Estate Association group and chaired by Yale School of Management alum Francis Lively ‘15. The conference was hosted by the Yale School of Management International Center for Finance.
The conference’s purpose was to focus on new ideas and trends shaping a field that has a potential impact on the fabric of our communities. The day achieved that goal, focusing on over-arching trends in the sector, from the state of the market to affordable housing and climate change.
Toby Moskovits, Founder and CEO of Heritage Equity Partners opened the conference by addressing a topic on every attendee’s mind: the impact of WeWork and co-working on the sector. Her segment titled, “How the Commercial Real Estate Industry Allowed WeWork to Eats it Lunch,” was directed at the impact co-working has had on the industry and how the business has quickly shaped the future of commercial real estate. She noted that developers and investors will have to focus on investments that provide a “live-work-play” environment for tenants to stay competitive. Co-working provides tenants a flexible space to work and a more casual feel than traditional office space. With many firms moving to an open floor plan and amenities such as lounge areas, an open floor plan and a style that incorporates hotel-like amenities, co-working seems to be an opportunity for landlords to attract leasing commitments from firms looking to more effectively attract talent.
The next panel, moderated by Yale professor and industry-expert Kevin Gray ‘85, focused on the outlook of the overall market and what the next recession might look like for the sector. Panelists included Nancy Lashine, Park Madison Partners; James Rehlaender, Jaguar Listed Property; and Peter Stelian, Blue Vista Companies. The session titled, “What the Next Real Estate Bust Looks Like,” began with a review of the credit crisis of 2008 and how, unlike 2008, current fundamentals in real estate look strong and the valuations around commercial real estate seem to accurately reflect these fundamentals that CRE prices are judged upon. Each panelist provided their thoughts on where the next recession might begin, focusing on concerns in the credit markets and the 2020 election. The panel concluded with Professor Gray holding each participant’s feet to the fire for a predicted date of the next downturn. The consensus answer was: “it depends on 2020”, which seemed to suffice for the both the Professor and the audience. The panel was followed by a Q&A session with the audience.
The next session of the day was a fireside chat with Keynote Speaker Jonathan Gray, President and COO of Blackstone Group, and moderated by Cherie Santos Wuest, Celadon Venture Advisors, LLC. Gray spent time focusing on the opportunities Blackstone is currently exploring in the market and discussed challenges the firm is seeing as they continue to grow their platform. As the single largest tenant in New York City and Boston, Gray spoke to many of the challenges general partners face with the growing urban population and the need for affordable housing while still exceeding investor expectations. Gray closed the session with a lengthy Q&A from the audience that addressed questions around regulation in major markets and the future of the commercial real estate industry.
The afternoon Keynote Speaker, Jonathan Rose, President of Jonathan Rose Companies and author of, “The Well Tempered City,” discussed the crucial role of cities and developers in re-designing cities that tackle social and environmental problems in ways that help humanity thrive. His presentation referred to his company’s deep experience in tackling the issue and offered many ways in which cities, developers and investors can incorporate the needs of the community in how they think about urban planning and development. While Rose addressed the many challenges re-design in a space-constrained area presents, his company has been able to achieve success working with cities and urban planners to redevelop communities that provide a vastly improved experience for the people living in these areas.
The next topic of the day was about Augmented Reality and Virtual Reality’s ever-growing presence in commercial real estate. The panel, moderated by Santos-Wuest, consisted of Marcio DaCosta, Cushman & Wakefield; Bemjamin Gruita, Groove Jones; and Karen Whitt, Colliers International. The discussion revolved around the many advantages of utilizing augmented and virtual reality from each of the paneliets perspectives while also raising some of concerns. All three of the panelists talked about the potential opportunities for uses of augmented reality in commercial real estate. To effectively grow the adoption of AR/VR in real estate, the panelists argued that the technology must be easy to use and cost effective with a clear end-user in mind.
Murat Sagman, Economist and Founder of Sagam Strategy Consultancy, then took an international perspective focusing on the macroeconomic outlook of Europe and Turkey. Sagman spoke about the current state and challenges for Europe and Turkey in a negative interest rate environment.
The next panel of the day brought the focus back to the domestic market with a discussion on Senior Home Equity. The panel was moderated by John Nelson, Wall Street Without Walls and panelists included Andrew Caplin, New York University and Thomas Goren and Bart Johnson both from Home In Trust. The panelists provided an update on the challenges facing all Americans regarding senior care, the advantages of seniors remaining in one’s home, and identified innovative financing models being developed in the real estate industry.
The day concluded with a topic relevant to all professionals, not only those in the industry, tackling climate change. Panelists from various backgrounds each spoke about the resilience of the real estate sector through increased threat from natural disaster and regulatory requirements. Other panelists included CT State Senator Alex Bergstein who gave her perspective on the issue from a policy standpoint to discuss the current status of climate change and infrastructure legislation. Thomas Emmons, Voya Investment Management and Brian Hong ‘14, Korea Investment Corporation spoke from the investor’s perspective about the risks and opportunities that investors see in these sectors and how are they addressing these in the near and longer-term future. From a developer’s perspective, Lindsay Ross, Four Twenty Seven, looked at the data that practitioners, developers and large institutional investors in real estate and infrastructure use to plan for and accomodate the impact of changing climate in their portfolios. Ben Myers, Director of Sustainability at Boston Properties, gave a poignant speech aimed at the effects of climate change on real estate and how to combat these issues moving forward.