Natalie Martirosian worked as Project Manager at the Office of the Deputy Mayor for Planning and Economic Development of Washington D.C. before they both embarked on an MBA at the Wharton School.
The two co-presidents of the Real Estate Club tell us at what point real estate becomes a viable investment opportunity, given the recent collapse in the housing market. They also discuss exciting guest speaker Jeff Blau, president of the Related Companies and active Wharton alumni.
What are your club's big initiatives this year?
With the goal of building on the great leadership of the club’s presidents over the last few years, we have three priorities for this year. First, we plan to continue to build on our strong real estate community. We have the resources of the world-renowned Zell-Lurie center on campus and accomplished alumni working in the real estate industry all over the world. We will look to connect, in more creative ways, with these alumni more over the course of next year.
Second, one of the club’s most important services to its members is support in the job and internship search. We will be developing even more workshops and support systems to streamline the job search process as much as possible.
Finally, our members are more and more looking into possible real estate careers outside the U.S. We hope to leverage our alumni and fellow members to increase the number of international companies interested in recruiting Wharton students.
Who is the most exciting speaker you have had this year?
We are extremely lucky to have a host of exciting speakers come to visit us every year. It’s tough to choose one but, if you did twist our arms, we would be inclined to say Jeff Blau, president of the Related Companies and active Wharton alumni.
Where do you see yourself after you complete your MBA?
Most of our members are working towards careers in real estate development or investment after completing their MBAs.
Given the recent catastrophic collapse in real estate markets in the US over the last 4 years, at what point does real estate become a viable investment opportunity?
Real estate is a cyclical business with viable investment opportunities in both the peaks and the troughs. The challenge is recognizing them and capitalizing on them before the market swings again. So, even in a recession, we are finding that multifamily residential properties are very lucrative, as former homeowners flee to rental apartments, and buying distressed debt can be an alternative way of acquiring defaulting assets for cents on the dollar.
To what extent does the lack of availability of mortgages reflect a genuine change in the risk profile of borrowers or a risk aversion on the part of lenders?
Lenders and homeowners are in the process of redefining their relationship. Though lenders have the money to start issuing more mortgages, they are implementing measures – either out of fear or as required, under new government regulations - that make it very difficult to close on a mortgage. But, when it comes to homeownership, lenders and borrowers tend to have a short memory. So, as soon as the housing market improves, the propensity towards risk aversion will likely dissipate. Hopefully, lenders and the government have placed sufficient safeguards by that time to prevent a future housing crash.
What proportion of your members are already invested in the property market?
Many of our members joined the club specifically because they have their own real estate investments or want to start investing in real estate. This year, we will create peer-learning workshops to connect Wharton students with investment experience with other students interested in investing.
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