Jonathan Gray Delivers Insightful Keynote at the 29th Annual Cornell Real Estate Conference
Business leaders sometimes elevate to the level of celebrity, often by design or for less than admirable reasons. But there are certain business leaders who attain celebrity status simply by being exceptional at what they do. Jonathan Gray, Senior Managing Director and Co-Head of Real Estate at The Blackstone Group, belongs in the latter group. As the keynote speaker for Cornell’s 29th annual Real Estate Conference, Mr. Gray delivered an optimistic and insightful speech to a captivated group of conference attendees on October 13th, 2011 at the JP Morgan Chase Building in Manhattan.
For weeks leading up to the conference the PRE student body, PRE faculty and Cornell Real Estate Council members were abuzz with anticipation of Mr. Gray’s presentation. Mr. Gray’s resume represents an ideal career model for aspiring real estate professionals, especially for those students wishing to pursue a career in real estate private equity and investments. Second-year PRE student Daniel Sax, said “Mr. Gray is a great role model for all of us specializing in PE. There are very few people in real estate, or the business world generally for that matter who have a track record like his - and by all accounts he’s also a terrific person.”
During his keynote Mr. Gray provided what was at times a rather contrarian perspective on current domestic and international real estate markets. Among Mr. Gray’s observations was a particular enthusiasm for India among the BRICS markets, which contrasted with the otherwise virtually unanimous emphasis on Brazil on the part of other conference speakers. Mr. Gray also encouraged the audience to consider opportunities in Europe, especially in distressed assets. PRE Senior Lecturer, Advisory Board Member and past Director Brad Olson was impressed by Mr. Gray’s focus on the opportunities in today’s market, as highlighted by the lack of new supply and the ability to acquire properties at less than replacement cost. Olson added, “Blackstone’s focus on keeping their investment rules and strategy simple in these complex times makes great sense.”
Mr. Gray also offered several observations regarding the U.S. market, including his questioning of a current bullishness throughout the real estate industry in investing in Washington D.C. A continual theme of Mr. Gray’s presentation was the logic of buying below cost of replacement as an investment strategy.
Intelligent deal making and distaste for overleveraging has enabled Blackstone to outperform its competitors, especially during the recent recession. Mr. Gray has led a string of headlining acquisitions for the company, including the 2006 acquisition of Equity Office Properties portfolio, the then largest acquisition in history at $39 billion. One of the hallmarks of that particular transaction was Mr. Gray’s immediate sale of hundreds of the acquired buildings, which occurred just prior to the onset of the recession and allowed Blackstone to contribute only approximately 50% of the equity for the retained assets. During his presentation Mr. Gray also provided an engaging overview of his company’s $26 billion acquisition of the Hilton Hotel portfolio in 2007. All told, Mr. Gray has led the privatization of eleven public real estate companies valued at more than $100 billion.
Mr. Gray has been with Blackstone since 1992, after graduating from the University of Pennsylvania with degrees in English and Economics (Wharton). Mr. Gray has established himself a highly respected and well-regarded real estate professional, and at just over 40 years old he has a long career ahead of him. If the next 40 some odd years play out like the past two decades have, Mr. Gray is poised to become one of the most prolific real estate leaders in recent history. For PRE students he is much more than a business celebrity, but also an example of what they can aspire to be.
Coordinated by PRE’s C. Bradley Olson Real Estate Faculty Fellow Mark Foerster and Chaired by Prudential Real Estate Investors’ CEO J. Allen Smith, the 29th annual Cornell Real Estate Conference was a stirring success. The conference featured a world-class lineup of speakers, including Mr. Gray, Moody’s Analytics’ Chief Economist Mark Zandi and Goldman Sachs Global Market Institute’s President Abby Joseph Cohen. PRE students were impressed by the caliber of the speakers, the quality of the programing and the overall takeaway value of the conference. First-year PRE student Jessica Coulson remarked, “My classmates and I all have very serious ambitions for a future in the real estate industry, not only as participants but also as leaders. For us, being an integral part of an event like the conference where we had the opportunity to meet and converse with these kind of industry leaders was like being at a real estate rock show! The conference is a great example of the value of the PRE experience”.
Next year’s Cornell Real Estate Conference will take place in Ithaca, New York on a date TBD. For more information regarding the Cornell Real Estate Conference, please visit www.realestate.cornell.edu.