Defining the New Normal

Over two hundred people traveled to Ithaca during Cornell’s Homecoming Weekend to attend The 2010 Annual Cornell Real Estate Conference themed Defining the New Normal. The conference was held Thursday and Friday, September 23rd and 24th, 2010. During these two days, the conference featured a series of speakers and panelists comprised of industry professionals. Topics discussed on Friday included an economic overview, trends in real estate sectors, green building and remodeling, investment and development opportunities, and opportunistic investing.  Employers also had the opportunity to engage in conversations with current students and present information regarding their company and possible placement opportunities. 

Friday began with a lively discussion of the current economic environment and capital markets conducted by Joshua Scoville, director of strategic research at Property and Portfolio Research (PPR). Attendees of the conference listened intently as Mr. Scoville described the outlook of the economy with a hint of optimism. Citing his thorough research, Mr. Scoville identified consumer spending as one of the main factors that will lead the nation’s recovery. Also, due to stagnant supply growth, he said that his research supports an almost unprecedented decrease in vacancy (even when taking into account the large amount of shadow vacancy that exists today), and went on to say that insignificant inflationary pressures exist now, a condition that is expected to continue for 2-3 years.

The conference continued with a diverse panel discussion among the following industry professionals: Duane Stiller, founder and president of Woolbright Development, Inc.; Paul Marcus, founder and president of Marcus Partners; Marshall Tycher, partner at Roseland Property Company and Tom Huffsmith, principal at Beacon Hospitality Advisors. This panel brought decades of experience in the real estate industry and described emerging trends in the industry and the opportunities that are ahead for entrepreneurial professionals. Paul Marcus discussed the difference between two major office tenant types: transformers and transitioned (into obsolescence), and talked about the priorities of each. He stressed that professionals in the industry must understand these tenants’ underlying needs.

The Conference also covered sustainability by presenting a panel titled Greenprinting Buildings moderated by Kenneth Hubbard, executive vice president at Hines Interests. The panel consisted of Joshua S. Eisenberg, partner and general counsel at Urban American and Dan Kaplan, senior partner at FXFOWLE Architects.  This panel discussed the initiatives that their respective companies are undertaking to meet the new demands of the markets, and answered questions regarding their outlook on the future of sustainability. Mr. Hubbard enthusiastically described the membership of Hines in The Greenprint Foundation, a worldwide alliance of leading real estate owners and financial institutions dedicated to reducing carbon emissions and ultimately adding value to property portfolios.

Attendees of the conference were thrilled to listen to an interview of William Ackman, founder of Pershing Square Capital Management, LP., moderated by David Rupert of Griffin Capital. The theme of the discussion was the investment and development opportunities that have been created through the current ailing economic conditions. Mr. Ackman described today’s climate as “an environment of uncertainty” but spoke optimistically of the future. Students had the opportunity to ask questions about the intricacies of his company’s investment criteria and the current deals that Pershing Square Capital Management LP is involved in.

The next panel, “Strategies for Opportunistic Investing,” was moderated by J. Allen Smith, chief executive officer of Prudential Real Estate Investors. The panelists were Michael Byrne, vice president of AEW Capital Management; Douglas Yearly, chief executive officer of Toll Brothers, Inc.; Jack Taylor, managing director of Prudential Real Estate Investors and Michael Ashner, chairman and chief executive officer of Winthrop Realty Trust. Mr. Yearly described the importance of “good news” in an economic recovery by stating that “business is directly tied to Consumer Confidence.” Additionally, Mr. Byrne explained how focusing on core assets is a good strategy for investors looking to place money in this economic environment, a strategy that was the general consensus of the panel.

The 2010 Cornell Real Estate Conference culminated in a closing reception at the Statler Hotel where students and industry professionals had the opportunity to step back and discuss the issues covered throughout the conference. The conference provided opportunities for students of all disciplines to learn from leaders in the real estate industry. Sasima Pongfuengfu, PRE’12, described her experience by saying “The conference gave us the opportunity to meet experienced real estate practitioners and gain insight into real estate trends that are not published elsewhere. I certainly look forward to the conference next year!”

The Program in Real Estate thanks all of the attendees, panelists and company sponsors for their support of this year’s event. Sponsors of the 2010 Cornell Real Estate Conference included:
• Prudential Financial
• Prudential Real Estate Investors
• Woolbright Development
• Bank of America/Merrill Lynch
• Westport Capital Partners, LLC.
• Urban American, Real Capital Analytics
• The Cornell Real Estate Council and
• The Cornell Real Estate Advisory Board.