The Real Estate Club hosted over 300 attendees at the 3rd Annual Real Estate Symposium on Saturday, February 9th. With a theme entitled “Making Connections,” the conference focused on topics in which real estate helps solve societal problems including energy, environment, transportation, caring for aging populations, capital liquidity, and the global economy.
Barry Sternlicht, Chairman and CEO of Starwood Capital and Donna Arp, Co-CEO of Realty Capital Partners, were keynote speakers. They were complemented by seven panels that enabled discussions between industry leaders, professionals, faculty, and students.
Donna Arp, a former three-term elected Mayor of Colleyville, Texas, emphasized the opportunities that real estate investors with strong balance sheets will have in the coming years. She also pointed out how energy efficient development can reduce U.S. dependence on foreign oil.
Barry Sternlicht, an HBS alumus, explained how faulty real estate underwriting caused the turmoil in the credit markets. He discussed how his investment firm will benefit when over-leveraged companies and banks with outstanding loans write down their assets. Sternlicht also offered frank career advice to graduates, and shared insights into decisions that shaped his career.
The Transit-Oriented Development panel discussed how public-sector investment in transit, commuter rail, and intercity rail creates opportunities for private-sector developers to create value and new communities that are in high demand because of the efficient access they provide.
Similarly, the infrastructure privatization panel examined how monetizing publicly-owned assets through large-scale buyouts can create market-based solutions that help control demand while serving as a source of capital for infrastructure projects and yielding consistent, reasonable returns to fund investors.
Other financially focused discussions came from the Real Estate Private Equity in Emerging Markets panel, which explored the opportunities for investors in less mature markets. Similarly, the Panel on Real Estate Derivatives pushed the audience’s understanding of how this emerging financial instrument is evolving and finding a niche.
The panel covering Green Building emphasized how new construction that is environmentally sustainable is rapidly becoming the standard for all new projects as customers increasingly insist on such provisions. Developers have realized that by building green, they are giving their product a competitive edge. As Holley Chant, one of the conference organizers stated, “There has been dramatic growth in green building since last year’s HBS Real Estate Symposium. When an industry leader like ProLogis declares that they now only build green, you can be sure sustainable building is a best practice and not just a niche market.”
On the subject of Senior Housing, panelists and attendees discussed how the aging baby boom generation is driving demand for retirement communities with graduated levels of assistance and care.
The Symposium concluded with a roundtable discussion on the “Bursting of the Real Estate Bubble,” led by Wellesley Professor Karl Case, one of the co-creator’s of the Case/Shiller Housing Index. The panel split on whether the U.S. would enter a recession in 2008. While some echoed Sternlicht’s remarks, expecting some correction in the valuation of commercial properties, others were slightly more optimistic on certain markets. In the words of Joanne McKinney of JPI, “The Symposium has quickly become an event in which both students and professionals can learn and network. It’s impressive that you successfully met two objectives for two different groups of participants. I look forward to participating again in future years.”