This week, the Baker Program in Real Estate welcomed back another alumnus of Cornell, Matthew Shore (Cornell ‘00), for its Distinguished Speaker Series. Matthew is the Chief Investment Officer at DRA Advisors, an investment advisory firm specializing in real estate investment and management services for institutional and private investors with over $11 billion in assets under management. He oversees acquisitions primarily focused on retail, office and industrial opportunities across the United States and is also involved in strategic asset management, financing, and dispositions. During his time at DRA, he has sourced and closed over $5 Billion in real estate transactions including the privatization of two publicly traded REIT’s.
(Photo credit: Ali Daye)
Matthew is a strong proponent of the importance of people in every aspect of real estate. He reiterated how some of his best deals came through relationships that he had cultivated and maintained over years, many of whom came on board as investment or local partners. This people-focused mindset is a philosophy that was extended to assets under his custody as well. Building off the adage “people attract people,” he showcased how it was more beneficial to create usable space rather than an oversupply of parking, even in suburbia, and the long-term importance of a tenant that generated cross traffic, even if it necessitated short-term hiccups in eliminating tenant dark properties. He showed examples of property revitalization using the principles of placemaking to create active frontage by replacing garages with retail.
Regarding the company’s investment strategy, Matthew discussed how DRA used a value-add outlook in pursuit of contrarian investments, but most importantly ones that were cash-flow intensive. DRA concentrates on being good stewards of capital, ensuring that even in a downturn, losses would only be on paper, while the company remains cash-flow positive. This drives DRA to focus on secondary and tertiary markets instead of gateway cities. While these markets might not be quite as high-profile, they ensure a higher yield. In terms of asset management, DRA exacts an understanding of tenant requirements and re-invests in its properties to ensure higher tenant returns and consequently higher rents and longer leases.
(Photo credit: Trey Duncombe)
When asked about his outlook on the market, especially considering changing demographics and the future of suburbia, Matthew opined that suburbs won’t decline because millennials desire a lifestyle along the same lines as older generations, only they push back their milestones to later in life. However, the demand from millennials is not as much for the quintessential suburban standard, but rather for a lifestyle that includes more experiential components, whether that means being near mass transit or with last mile connectivity. He believes that this shift in preferences should direct development and investment strategies in the near future. He also reiterated that the suburbs “build it and they will come” approach to compete with the city led to overbuilding some asset classes which are now coming to a short end.
On a personal note, Matthew regaled the audience with tales from his days at Cornell, including an enviable semester-at-sea. The Baker Program in Real Estate enjoyed hearing him speak at the Distinguished Speaker Series and thanks Matthew Shore for coming back to share his knowledge and experience.
(Photo credit: Trey Duncombe)
