She hopes to use the skills and experience gained from her MBA to follow her passion of shaping communities and improving quality of life from within the real estate industry. I caught up with Alison last week, where she discussed when the number of people investing in housing will increase and when lenders will relax their policies to enable more borrowing again.
What is your club’s main aim?
One word: education. The cyclical nature of the real estate industry and the economic shift in the last few years have frightened some incredibly talented minds away from the space. Our goal is to teach our members about the opportunities in real estate, prepare them to shine in networking and recruiting, and provide hands-on experience over their two years at Darden.
What were you doing pre-MBA?
After college I spent two years working for a federal consulting practice before transitioning to an analyst role for a REIT. There, under wonderful mentorship in acquisitions and development, I developed a love of deal structure complexity and building great spaces.
Where do you see yourself after you complete your MBA?
I am passionate about the role real estate planning and development plays in shaping our communities and quality of life. I hope to translate my background and my experience at Darden into a career transforming urban markets through thoughtful mixed-use development.
Given the recent catastrophic collapse in virtually all real estate markets globally over the last four years, at what point does real estate realistically become a viable investment opportunity?
If only I had a crystal ball! Investors have typically seen great returns in real estate by focusing on fundamentals: investing in barrier to entry locations, maintaining low leverage, expecting realistic returns, and catering to the in-place market.
We no longer live in the age of “If you build it, they will come.” Investors must be attentive to market demand and, as with any product, we need to manage our appetite and not over invest or build beyond what the market can absorb. Therefore, I think real estate is always a viable investment opportunity if you are in the right location and are able to access the right capital sources.
What is your assessment of the relative behavior of the commercial real estate market and the domestic real estate market of the coming two years?
It depends largely on the outcome of the European crisis, which impacts interest rates and investor confidence, and on the U.S. political environment. I believe interest rates will remain low over the next two years, which should result in additional investment. However, without confidence, companies are still reluctant to spend. I think we will see a continued shake out of the markets with less fundamental strength and hopefully a rebalancing of overall market expectations and supply.
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?
There is a fine balance between banks loosening lending standards enough to encourage investment and maintaining strict enough standards to prevent a repeat of the latest recession. I think the lack of mortgage availability represents a necessary shift away from the slack in standards over the last several years and hope that, as capital becomes more accessible, lenders and borrowers remember to carefully assess risk.
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