Real Estate MBAs took their annual trip to the world’s largest property conference, MIPIM, during the week of March 11, 2013. The group was led by faculty associate Joe Walsh and faculty member Erwan Quintin and joined by Wisconsin School of Business Dean François Ortalo-Magné. Situated along the Côte d'Azur (or French Riviera), the Palais des Festivals hosted over 20,000 real estate practitioners from around the globe. This post will give you a flavor of a typical day in Cannes, and hopefully will not inspire too much envy:
Wednesday morning started with a bus ride from our hotel in Cannes La Bocca into the city of Cannes to meet with Hans Vrenson, Global Head of Research of DTZ. Hans met with MBA students via video conference back in February, when he presented DTZ's 2013 economic forecast. On the steps of the Grand Auditorium, Hans explained the European CMBS market and how it differs from its American counterpart, mainly through the use of shorter maturities and floating rates, and how maturity mismatches were an issue for European borrowers. He also described the continued diversification of lending from mainly European banks, which originally issued over 75% of total loans.
A debrief with our Dean Ortalo-Magné followed in the Palais' Press Room, where he gathered information from our participant surveys about the conference's overarching themes for his Friday wrap-up speech. The survey results have revealed a recurring theme of higher investment risk appetite through value-add, direct investments that provide investors with a high degree of control. This is clearly a result of the financial crisis when many investors were burned by more indirect investing in pooled funds.
Back on the Palais steps, the group met with Don Wise, CEO of Metzler Real Estate, who described the acquisition and asset management services he supplies for his German clients. Specifically, he spoke about the acquisition of 555 Mission Street from Tishman Speyer, a gorgeous trophy office building in San Francisco. Up next, several of us attended the best panel yet on Private Equity Real Estate with representatives across the globe from Morgan Stanley, AEW Europe, and GE Real Estate Asia Pacific. A special moment came when I walked out with panelist Michael Levy, Managing Director of Morgan Stanley, and discussed his global investment strategy and his aversion to Africa. He noted the political uncertainty in Africa leads to concerns of government expropriation of property during the hold period and a general lack of regulatory transparency.
|Anthony Huerta and Conor McCahill (both MBA 2014)|
We headed over to the Heitman yacht party for a cocktail, and met some interesting people including Steve Williams, Executive Managing Director of Real Capital Analytics, who sits on the Global Real Estate Master board of advisors. After catching up on work and attending a panel on US real estate with representatives from USAA, AFIRE, and CBRE, we had a great evening with cocktails and German fare at the Berlin stand overlooking a lineup of luxury yachts. Several of us grabbed Kebob Frites at a local family restaurant in Cannes La Bocca while watching the Arsenal/Bayern Munich soccer match. Who could ever complain about a day like that?
|View from the Berlin Party|
Jonathan Brown comes to Madison from Washington, DC, where he managed downtown Class A office buildings for Tishman Speyer. Jonathan plans to leverage his prior experience with financial and analytic tools gained during the MBA program to eventually start his own real estate investment firm.