On April 21, 2016, The Steers Center for Global Real Estate hosted the 2016 Real Estate Luminaries event in the Hariri Building on Georgetown University’s main campus. It was an excellent opportunity for Georgetown Alumni, real estate industry leaders, and current students to hear from leading real estate executives. The event featured 2016 Luminary Tom Barrack, founder and executive chairman of Colony Capital, Inc.; moderator Jack Vissicchio (C ’88), co-head of Americas Real Estate Investment Banking at Bank of America Merrill Lynch; and panelists Tom Arnold, head of real estate in the Americas, Abu Dhabi Investment Authority; Dan Cummings (P ’05, P ’07), managing director and head of real estate, the Harvard Management Company; and Anthony Orso (P ’17), chief executive officer and co-founder, Cantor Commercial Real Estate. The full session can be viewed online at: http://realestate.msb.edu/events/2016-real-estate-luminaries-series
The Luminaries series has become a signature event for the Steers Center for Global Real Estate. It exemplifies the Center’s mission to deepen relationships with industry leaders to engage undergraduate and MBA students in practical, real-world experience. Hearing insights from experts like Tom Barrack complement the coursework we’ve tailored at Georgetown University’s McDonough School of Business to teach the realities of global capital flows and investment.
We had the opportunity to interview two real estate executive alumni and Steers Center Mentors on their thoughts about Luminaries 2016. Here are excerpts from our conversation with Larry Botel (B ’88), Managing Partner of JOSS Realty Partners and Michael Gershenson (B ’00), Managing Director of the Carlyle Group.
GUREA: What was the most impactful thing you heard from the speakers this evening about the real estate markets today?
BOTEL: A few of us were talking after the event about how different the real estate business is today that when most of us, and most of the panel, started back in the 1980s and 90s. Most of the panel discussion was about the capital trends in the market both for equity and debt. Liquidity through capital flows into real estate, especially debt, has changed everything about real estate investment. What is especially true is how quickly the market can change and react. Back when we started, everything was in slow motion compared to today. That being said, it still seems capital can literally shut down its flows to real estate which has happened multiple times over the last 30 years, the effect of which are devastating to the real estate business.
GERSHENSON: Foreign capital is acquiring US assets not for an expected return, but instead for the opportunity to acquire knowledge. The implications of this trend are wide including the impact on asset values given the lack of an economic return governor and the impact on the US sponsor/fund model if foreign capital was to disintermediate these groups.
GUREA: What comments made this evening would you advise your mentee to pay particular attention to as they think about their future careers in real estate?
BOTEL: Tom Barrack kept going back to how important it is to cultivate and maintain long term relationships in the real estate business. As much as real estate is about location, it is also about people. You don’t need to be always conscious of this. If you are hard working, honest, and smart about your choices, you will someday realize you are surrounded by great relationships which provide a foundation for success in real estate.
GERSHENSON: Long lines and Favored Nations. As to long lines, think about how relationships could impact your career over the course of many years not just the immediate future. Connections you are making today could have a profound impact on your career in 2, 5 maybe even 10 years down the road. Thus, respect and cultivate each relationship as if it’s one for your career not just the deal on your desk. Favored nations refers to the dichotomy in today’s market place between the capital flight to “gateway cities” versus the lack of capital for secondary markets.
GUREA: What perspectives did you hear this evening that you’ll think more about in the weeks to come?
BOTEL: It is very important to understand the history of our business. While every cycle is different, there are many fundamentals that repeat themselves and help provide a roadmap to good decision making. Passing along this experiential knowledge is something I will be thinking about and doing.
GERSHENSON: Foreign capital continuing to seek US assets, the debt market’s lack of liquidity for secondary market assets, and Tom Barrack’s commentary on a lack of arbitrage left to be cultivated. ____________________________________________________________________________________________
Larry Botel (B ’88) founded JOSS Realty Partners in 2005. He oversees all company investment and management activities. Since inception JOSS has acquired 18 office assets totaling over 2.5 million square feet with a value in excess of $750 million in New York City, Washington, DC, Philadelphia and Miami. Prior to JOSS, he spent three years as the Chief Operating Officer at Broadway Partners, where he oversaw all operations, staffing, asset management and underwriting activities. Mr. Botel directed Broadway from a sole proprietorship with limited operating capability to a full service real estate investment company owning 3.6 million square feet of commercial office space valued at over $850 million.
From 1997 to 1999 he was a Vice President and Head of Real Estate at Fortress Investment Group / UBS Global Principal Group / BlackRock Capital Finance. Mr. Botel held previous positions at Mutual of New York Real Estate and Prudential Realty Group. Mr. Botel is also a General Partner of two affiliated Minor League Baseball teams, the Richmond Flying Squirrels (SF Giants AA) and the Omaha Storm Chasers (KC Royals AAA).
Mr Botel received his M.B.A. from the University of Chicago Graduate School of Business in 1993 and B.S.B.A from Georgetown University in 1988 and currently serves on the Georgetown University McDonough School of Business (MSB) Board of Advisors and Executive Committee for the Georgetown Steers Center for Global Real Estate.
Michael D. Gershenson (B ’00) is a Managing Director of the Carlyle Group focused on U.S. real estate opportunities. He is responsible for all aspects of real estate investments, with a geographic focus on New York and Boston, as well as a product focus on retail and industrial properties. Mr. Gershenson is based in New York.
Since joining Carlyle in 2002, Mr. Gershenson has been involved with the execution of over 40 transactions with an all-in capitalization exceeding $2 billion and the asset management of Carlyle’s portfolio of retail and industrial assets.
Prior to joining Carlyle, Mr. Gershenson was with Deutsche Banc Alex. Brown’s mergers, acquisitions and corporate advisory group in New York where he specialized in real estate transactions.
Mr. Gershenson received a B.S.B.A. from the McDonough School of Business at Georgetown University.