Unlike other sectors of the U.S. economy, real estate may be returning to the basics. According to Jim Grissett, a founding partner of The Parthenon Group and adjunct professor in the real estate program at Emory University's Goizueta Business School, banks are eager to lend, but only to qualified buyers. He notes that the flipping of property by amateurs looking for a quick buck is out, but investor buying, especially in distressed markets, is a healthy development. And despite a glut in certain talent areas, some employers are hiring: equity funds are seeking financial analysts and good leasing people are always in demand. Grissett spoke to Knowledge@Emory about the current state of real estate and some of the highs and lows to expect in the months ahead. Goizueta’s Inaugural Real Estate Case Competition Takes on Atlanta BeltLine Project
Is a Community Land Trust a viable way to create permanent affordable workforce housing on the Atlanta BeltLine, a 22-mile perimeter that links 45 urban neighborhoods around the central city? That was the question posed in the inaugural Real Estate Case Competition of Emory University’s Goizueta Business School. Fifteen Emory students, including five from Emory’s School of Law and one BBA, competed on three teams in the case competition. Roy T. Black, a professor in the practice of finance and director of Goizueta’s new real estate program, selected the case because it had a broad-cased public policy component and was very complex. Indeed, days before the presentations, the Georgia Supreme Court ruled that school tax money cannot be used for BeltLine development. “This was a real world example of the kind of thing they will be doing after they graduate,” notes Black. “There is real value in what they did in these presentations.” Goizueta Welcomes 'Green' Panel, New Real Estate Initiative
Even as the interest and discussion about sustainability picks up across the United States, those in the real estate industry will admit that going green can sometimes be a hard sell. Why? For new construction or retro-fitting older buildings, the costs for future energy savings are made upfront, explained a panel of industry experts during a recent discussion on sustainable developments and green building hosted by Emory University’s Goizueta Business School and the Urban Land Institute (ULI) Atlanta’s Young Leaders Group. Despite the challenge, the group was united in their enthusiasm and belief that more education would not only benefit the environment but those who inhabit it. Who's to Blame for the Subprime Debacle?
Dissecting the reasons for the subprime mortgage debacle in America is like sleuthing through a good whodunit. The latest chapter in the complicated tale is the role of the credit rating agencies, in particular, whether their fee structure contributed to faulty information for investors. Pressure on these agencies has been intense. For example, McGraw-Hill, owner of Standard & Poor’s, has lost 26% off its stock this year. And there have been personnel changes: one of the latest was the president of the Standard & Poor’s division, who resigned Aug. 30. Faculty at Emory University and its Goizueta Business School explore the role of rating agencies and discuss other possible culprits in this ongoing drama. The Role of Real Estate in a Mixed Asset Investment Portfolio
Despite the sub-prime housing sector hitting the skids, commercial real estate projections appear to be strong. With investment in commercial real estate brisk and returns on investment in REITs strong, real estate remains a useful and important diversification tool for institutional investors. Roy Black, an associate professor in the practice of finance at Emory University's Goizueta Business School, takes a look at the existing research in the field and compiles a sweeping research paper on the role of real estate in a mixed asset investment portfolio. Could Tremors in the Subprime Mortgage Market Be the First Signs of an Earthquake?
For months, the steady drip of news about troubles in the subprime mortgage market didn't seem too bad, and many economists started to feel reassured about the health of the general housing market. But now some experts wonder whether those feelings of reassurance came too soon. They suggest that the growing number of borrower defaults in the "aggressive lending" market, which includes various types of risky mortgages besides subprime loans, could shock the broader housing market and economy after all. Epidemics in an Integrated Global Society: An Economist's View
When Severe Acute Respiratory Syndrome (SARS) broke out in Hong Kong in 2003, some media outlets predicted economic calamity for the city. But by one financial measure -- real estate prices -- Hong Kong hardly suffered, according to research by Grace Wong, a Wharton real estate professor. In two papers titled, "Has SARS Infected the Property Market? Evidence from Hong Kong" and "Is SARS a Poor Man's Disease? Socioeconomic Status and Risk Factors for SARS Transmission," Wong looks at SARS' impact on real estate values and analyzes the role of income in determining who contracted the disease. Underlying her research is the recognition that in a global economy, infectious diseases such as SARS will likely spread farther and faster as people travel all over the world in search of new business opportunities. Can Real Estate's Allure Continue to Attract Investors?
Over the last two years, nearly $300 billion has been earmarked for investment in commercial real estate, and when it comes to total returns, Real Estate Investment Trusts are clocking the competition. But as interest rates begin to inch up, can this momentum be maintained? In a recent alumni panel discussion at Emory University's Goizueta Business School, two real estate insiders spoke candidly about changes and challenges for the industry. A Real Estate Boomlet in Latin America
Latin America's largest economic powerhouses, Mexico and Brazil, are enjoying a real estate revival that neither country has seen in years. Big-picture economic fundamentals, politics and recent laws welcoming foreign investment are helping to trigger building sprees in residential and commercial properties, observers say. As Rogerio Basso, a Miami-based Latin America specialist for Ernst & Young's hospitality and real estate advisory service, puts it: "There are good expectations for growth in both countries." Is the U.S. Real Estate Market On the Edge?
Despite the uncertain state of the economy, erosion of jobs and continued terrorist threats against the United States, home prices continue to defy the laws of economic gravity. It is clear that residential housing has played a large role in minimizing the economic downturn. However, with the recent price appreciation, many are questioning if the U.S. real estate market could ultimately strike a harmful blow to the economy. Experts at Emory University and its Goizueta Business School, as well industry observers, provide their views.