Each year, the highlights of the annual Cornell Real Estate Conference are the featured speaker panels. At the 2015 conference, held on October 15-16 in New York City, panel topics included Capital Flows, Trends in Multi-Family, and Energy Efficient Commercial Development. The morning portion of the schedule was kicked off by an introductory discussion from Robert M. White, Jr. of Real Capital Analytics and Michael B. Cohen of CoStar Portfolio Strategy. The two explored recent trends in Capital Flows in and out of real estate and offered insights regarding what may be garnered by reading in-between the lines.
Questions addressed by the two executives included establishing what stage in the cycle the market is currently at, as suggested by capital flows. Foreign investment in U.S. real estate, underlying market forces, and fundamentals were the drivers that were discussed extensively, broken down into simple terms. Jason Spencer (Baker ’16) reflected that, “one takeaway that I got from Robert White and Michael Cohen is that the fundamentals look relatively strong, but that there is apprehension about the market and that everyone thinks we are getting a little late in the real estate cycle. The effect of foreign investment is distorting a lot of the fundamentals right now.”
Other Baker Program in Real Estate students garnered a great deal of takeaways from the panel as well. In praising the discussion, Brendan Calafiore (Baker ’17) reflected that Cohen “shared a great deal of insights from his company’s platform, which Baker students regularly use. This illustrates the probability of whether cyclicality will repeat itself and thus reminds us to ask ourselves if we are nearing the end of the current cycle, or simply witnessing a structural shift in the real estate market.” Harrison Willis (Baker ’17) also commented that “the capital flows panel was highlighted by industry leaders from some of the top institutional lenders. It was a privilege to hear their views on market rates and the manner in which they are protecting against default risk as we near the top of the market.”
Spencer summed things up by stating that “the discussion really helped me get a feel for the economy. The consensus from the panel was that the next year or so in real estate will be good, but then we could be headed for a recession, probably caused by something yet unknown. This highlighted the inherent challenge within real estate; no one truly has a crystal ball on what will happen next in the market.”
