The Independent Voice of Southern Methodist University Since 1915

The Daily Campus

The Daily Campus

The Independent Voice of Southern Methodist University Since 1915

The Daily Campus

The Independent Voice of Southern Methodist University Since 1915

The Daily Campus


Real Estate Society hosts first lecture

There is no real estate bubble, according to the speakers at Tuesday’s Real Estate Society meeting.

SMU’s Real Estate Society hosted guest speakers John B. Jardine, managing director of Nomura Securities International, and Philip Riordan, of GE Investments in charge of eeal estate asset management.

The event, sponsored by Northmarq Capital, was one of two meetings of the group. The society meets twice a year in the Cox School of Business, providing an opportunity for its members to network and hire current SMU students. Real estate finance students were required to attend the event, which was held in the new Crum Auditorium in the Collins Executive Education Center.

Jardine was introduced by Dr. William Brueggeman, the real estate department chair. Jardine used a PowerPoint presentation to illustrate his points, focusing on the abundance of capital flooding into real estate.

He said he is not worried about the market being overvalued, because low interest rates cause people to buy homes instead of renting.

“The commercial mortgage securities industry has legs and will grow substantially to take market share. People aren’t delinquent on their loans, and that bodes well for the industry as a whole,” Jardine said.

After going through detailed bar charts and a 10-year statistical look at capital markets, Jardine concluded, “The market is as good as it gets now.”

He stressed the point that there is no real estate bubble, adding that there will be a gradual move away from real estate to other more profitable sectors.

Following Jardine, Riordan took the podium.

He addressed the topic, “What are the institutional buyers thinking when they pay such low cap rates today?”

Stating that “every market is different,” Riordan explained how real estate can’t be generalized as one big market.

One must look at specific areas as unique markets and deal with them accordingly, he said. For example, the Los Angeles apartment market is much different from the Nashville apartment market.

Riordan also addressed the question: “Is real estate still an alternative?” Real estate has “consistently strong performance fueling lasting investor interest,” he said.

He explained that pension fund managers are getting “seasick” with the stock market and love the opportunity to invest in something more stable.

He concluded that “nothing is more transparent than real estate – it’s leaving the other asset classes in the dust.”

In honor of David Letterman, Riordan made a Top 10 list of why one should be in real estate. A few of the points included that it’s real and will provide a career even if the bubble bursts, it’s more fun to talk about than stocks, golf courses are considered real estate and the mantra of location, location, location.

After the lecture, Gregory Parker, a senior majoring in real estate finance, said, “[T]he lecture deepened my interest in real estate.”

Another SMU student, 22-year-old Chris Ray, said, “I was impressed by how in-depth they went into their subjects.”

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