YouSaid · the spoken record

Cathy Marcus

lines on the record: 68
first: 2024-01-11
most recent: 2024-01-11
sittings or episodes: 1
sources: podcast

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“I wish I knew that it would evolve in the way that it has. I think that when I got into the business, which is 35 years ago, it was far more opaque and less institutional. And I guess that for some people, that made it feel like there were higher barriers to entry to being in the business. But I actually really appreciate how much more transparent the business is and how much more institutional it is and the fact that it's more accessible to more people. It used to just be only the wealthiest people in the world could invest in institutional real estate. I know anybody can, and I think that's terrific.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“I had had an excellent adventure three years in London, three years in Paris, something like that. And I would recommend that to all young people”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“My greatest advice that I give to everyone is try to do a little bit of everything. If you ultimately want to specialize, if you ultimately want to only do equity acquisitions, that's great. Don't make that decision when you're 22 or 23 years old. Do a little bit of debt. Do a little bit of equity. Do acquisitions. Do you asset management? Do dispositions. Do portfolio management. I think that especially when you hit a crisis, the most well-rounded real estate people are the ones who've done a lot and they're the most successful in a down environment. If you think about it, you might not be an asset manager, but if you've never worked in debt, how are you going to know how to do a workout of your loan that now is in default? So I just think do a little bit of everything. And the one regret that I have is that so far I've only worked in the US in terms of living and working. And I wish”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Right now, I'm reading a book called Eligible by Curtis Sittenfeld, who she writes a lot of more pop culture, I guess, type books, but this happens to be a modern take on pride and prejudice. So Pride and Prejudice obviously was very tongue-in-cheek itself, and this is a modern tongue-in-cheek version of that of, you know, an overbearing mother trying to marry off her daughters, et cetera. But I'm really enjoying that. I tend to read to escape. And I also just finished a book by Daniel Silva, who has written like 32 books, and I think I've read every single one of them. And it's a series of spy novels. And instead of the CIA, it's the most sad. And the protagonist is, in addition to being an amazing Mossad agent, he's an art historian, an art, an artist, an art restorer. So it kind of combines things I'm very interested when I was young.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Mm. Sounds great The person who is most influential in my career from a young age is a woman named Yvonne Compatello, who I worked for when I was in my late 20s and early 30s. And she taught me everything I know about real estate, but also taught me a lot about being a woman in this business. She taught me how to be a very tough negotiator. She taught me how to kind of manage working in a man's world. And she always expected a lot of me, but also always supported me. And I've tried to emulate some of the way that she managed me and the way she managed and led others. It really was very influential.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“I had no idea. Right. There you go. She was fantastic. Fantastic. So I really loved that. And in terms of a movie or documentary, also perfect for a woman of my age is called Being Mary Tyler Moore. And it's about Mary Tyler Moore. And, you know, she was such a icon for young girls in the 70s of she lived on her own. She had this cool job. She was intentionally single. She had the social life. She was dating. It was really very formative. And they speak to a lot of women, mostly famous women, who were so influenced by watching that show. And I definitely was. And she was really very much of a trailblazer and a remarkable woman. So I'd recommend that.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure, I recently finished Daisy Jones on the sixth, which was recommended to me by another woman in the business. And I'm going to be 58 next week. For someone of my age, it just brings you back to kind of your middle school and high school years with music. It's fantastic. It's a little bit of the story of Fleetwood Mac.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot of new information that we're going to ask the question differently as we continue to pursue this. So it is definitely a trial and error. And I think that when people give the impression that they kind of plugged in the AI machine and all of a sudden they have really, really great answers, that's not how it works. It takes a lot of work. And I think our launching of our lab and our outreach to our university partners is our way of acknowledging that this is a process and it's a learning process and it takes more than just a real estate investment manager to make progress there.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Open and fund that I used to manage. We launched that in 1970. We have data going back that far. And we have lots of data in our lending business, we've been lending for way longer than that. So we have lots of data that we can leverage. And so we're very excited about that. We have several university partnerships where we are working on certain problem statements. And we have them all around the world. So that's very, very exciting. And it's a journey, right? I'll tell you that our first problem statement that we worked on with one of our university partners here in the United States was really around trying to predict multifamily rents and using artificial intelligence, using some machine learning, using our own data, but other data as well. And at the end of the day, we didn't come up with a great answer, but now we have, you know,”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Real asset X is our innovation lab that we recently launched. And the purpose of it is really to help to advance technology and innovation, particularly around ESG in the real estate industry, not just for our portfolio, but for the industry more broadly. And, you know, we're really looking at kind of two different sides of our lab. One is a bit more operational where we're thinking of ways to more efficiently run our own business, more efficiently run our own properties to use our data in ways that help us to run the business, help us to serve our clients better. On the other side of the lab is a bit more aspirational of what could we do with all that data, what better investment outcomes could we have by leveraging our data. You know, I mentioned that our U.S. businesses are very mature. We launched our core”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, exactly. They're still very accommodative of real estate, but the demographic story in Japan is very difficult with just really, really a preponderance of the population is aging, and that just keeps increasing not a whole lot of immigration into Japan. So definitely a problem. And there was a lot of hype around the Olympics and what that might mean for Japan. And I think a lot of that ultimately didn't come to fruition from a tourism perspective. Now, It's sad to say for my Japanese colleagues, but, you know, the yen is quite weak. And so I think that there has been an increase in tourism. I was recently in Japan, and I saw a lot of American families traveling there. It used to be cost prohibitive to bring a family to Tokyo. And now it's not. So hopefully there's some kind of a jump start there, but definitely the aging population in Japan is tough.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“We are Yes, uniquely challenging. And, you know, if you, the one very positive thing is that interest rates are still relatively low in Japan, not as low as they had been, but they're still low. They're not.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it is still a persistent drag. I think that you see evidence of businesses that were from regulatory perspective in London and now maybe they're in Ireland. Maybe they're in the Netherlands. You definitely have seen a bit of a drain from London. There are pockets of the London office market that are not doing that well. The good news is that London does have a little bit more of a modern stock than a lot of other cities from an office perspective. But definitely, I mean, inflation has really taken a toll on the UK. And while it's certainly getting better, if you think about kind of just constant dominoes falling of Brexit and then the pandemic and the war in Ukraine and inflation and the high energy costs and the high food costs, it's really noticeable. I can tell you I traveled to London quite a bit. And even just as a visitor, I noticed.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Professionals may be remaining renters for much longer than they used to because the barriers to home ownership are so much higher. We have an aging population. We need seniors housing. There's so many different aspects of housing that we just don't have enough of, particularly at the affordable end of the spectrum. Affordable housing is a crisis almost everywhere in the world. And in particular, affordable seniors housing is really in crisis.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“We definitely still see opportunity in Europe, but in terms of the economies, and you mentioned Germany, Germany definitely is a concern for us, right? We invest quite a bit in Germany, the UK, Brexit has not been kind to real estate values in the UK. But there are still opportunities. And it's a lot of the same themes, which for us, we really think of them around demographics, around digitalization, and around decarbonization. If you really think about demographics, there's a lot of the same story, which often leads you to the living sectors. We think about for young people needing affordable first-time apartments. For families, maybe with interest rates where they are and with housing costs where they are not being able to afford that to buy a single family home, maybe they want to rent a single family home.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“And for economic growth is in the US. And you would want to be, if you're an Asian investor, there's certainly a lot of growth that can go on in Asia, but it's a bit more volatile. You might want to have some eggs in the US basket. You might want to have some eggs in the European basket. So global investing is just here to stay, in my view. It's much more of a trend. And if you want to be a big global player in any particular asset class or asset type, you have to be a global provider.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“To invest in Asia, there had to be a huge return premium. It was the way of compensating for the country risk, maybe some currency risk, and just the general, you know, lack of certainty around investing in a market that maybe you don't know that much about. And that has completely changed in that the driving factor behind people being global investors is really around diversification. It's far less around yield premium. Now you can certainly chase yield premiums in developing markets, but if you're investing in non-developing markets outside of your home country and they're mature markets, you should not expect much of a risk premium. At the end of the day, it's about diversification because if you think about it, think about the world right now. Right now in the US, as much as we may complain about what's going on here, most global investors would tell you that the greatest prospect for income growth”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's very interesting that as much as PGM is a global brand, it does always come down to prudential being in New Jersey and it gets discussed all the time. But we are within PGM real estate in particular a very, very global company. We operate in 14 different countries and we have been investing in Europe and Asia for 20 to 25 years. We've been at this for a very long time. Now, our US businesses are larger and more mature, and it's really just because we have a long head start in the US over our international businesses. But today's investor, especially the most sophisticated investors, they're investing globally and they're allocating globally. And it used to be, especially from the perspective of an American investor in real estate, that in order to leave the home country, in order to invest in Europe,”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I'm going to come off as very cynical, but we keep talking about this recession and when a recession is going to come. And I just have a hard time believing that we're going to be in a recessionary environment facing a presidential election in this country. I think that everyone is going to do everything in their power for that not to happen.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Consumer seems to be going, it would lead you to believe, I think, that we're not going to see any more hikes and that sometime next year we're going to start to see some decreases, whether we get to two. I certainly hope so. And, you know, it really, I think, I don't think anyone has the expectation that we're going to go back to zero interest rates. But if we could just get down to like two or three instead of four or five, that would be pretty amazing.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, first of all, I think we should all be praying for that because that would be very, very good for real estate overall. From a realistic perspective, I don't anticipate any of that happening in the first half of the year. I anticipate, and I say this extremely sadly, I think the first half of the year is going to be more of the same of what we've seen. And it's going to be a very interesting 2024 all around the world. You have lots of things going on around interest rates and stock markets and business, but underlying all of that are a lot of very high profile elections around the world, not just the US. And you have a geopolitical tinderbox in many places. So it is going to be very, very interesting. If you look at, you know, what is happening with inflation, what is happening, you know, if you really interrogate some of the jobs numbers and where the concerns are.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Of a play there. Also, if you look at alternatives, right? Some of the self-storage data centers, some of the alternative sectors within real estate in the public markets have reacted quite differently than you might expect and from one another. So right now most REITs are still selling at a pretty significant Discount to net asset value, which net asset value would be a good proxy for real estate value for the actual.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Maker who is influencing the cost of some of these stocks. But overall, I would say that if you were to take something away from the difference between the public markets and the private markets, the public markets react very quickly and often overreact. And we do think that there has been an overreaction here. However, the themes are fairly similar. If you look at some of the office reits, they've been clobbered. And that's a reflection, of course, of people's concerns around the office market. But what's interesting in the public space is that the best office reaches, meaning the office reits that have the highest quality assets, the kind that I mentioned before, ESG qualifications, modern, new, your public transportation, those have taken about the same hit as ones with Class B assets. So that doesn't really make sense. There is some kind of”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“The interest rate story definitely played into it. But if you think about REITs and who invests in REITs, there are definitely pure play real estate investors who invest in REITs like us and some of our competitors. But there's also lots of individual investors who are investing in REITs. There's lots of big index funds that are investing in REITs. So it's not always a real estate decision.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it is a balance, and it is true to say that right now the distresses in the capital markets, it's in the ability to get debt and the ability to find equity if you want to do a development, forget about construction loans, which are almost impossible to get right now. From a fundamentals perspective, with the exception of office and in particular traditional office, most property types are doing quite well. In industrial warehouses, as you mentioned, rents are still going up in most markets and are expected to continue. In multifamily rentals, we're seeing a little bit of softness in some markets where there was a lot of supply, but long term, we're not concerned because we know we have a structural lack of housing. So retail, believe it or not, retail who was not everyone's favorite a couple of years ago, even retail assets are doing pretty well right now.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. And they might want to own it for a very, very long time, especially those kind of owners. And right now, it's an advantage to be an all-cash buyer. And during this cycle of very low interest rates, it was not an advantage to be an all-cash buyer.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“It's not the big institutional names. It's not the people like us. It's people who are buying unlevered, people with friends and family, family offices, really more in your space than in mine. And very interestingly, we often have never heard of the people.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes. Your holdings. Yes. I'd say there's two categories of the types of assets we want to sell right now. One is kind of just bottom line, those that will sell. So if we need to raise some capital, if we have some debt that we want to pay off, if we want to redeploy some capital, you can sell multifamily in the southeast. This is in the US. And you can sell industrial. Those are the two things that sell right now. And even then, you are probably going to take a lot longer selling those assets. And very interestingly, you might not recognize one name on the list of bidders.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“How do you work around that? Yes, much, much lower transaction activity. And it's interesting because for a large owner like us, these days when we're talking about transactions, we're mostly talking about dispositions. In a normal business cycle, we would, when we say transactions, we're mostly talking about acquisitions. So it's very, very different. And that impacts both the debt and equity sides of the business. So on the equity side, we would like to sell some assets and improve our liquidity. And there's not a lot of buyers there. The buyers that are there are generally buying without any debt. So if you think about the fact that we're also a lender, that really impacts our lending business. Our lending business has much lower production values across all asset types than it's had historically. And again, it's because of the lack of transaction activity.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“The GFC took eight quarters in private real estate to completely adjust, but the vast majority was a shock in the first two quarters. And then it just kind of, you know, eked out over several more quarters. We have something totally different here where the first couple quarters after the interest rate increases. It was almost like people were in denial and nobody really knew what to do because we had very little price adjustment. And now that some people have a gun to their head, there are some transactions that are happening. We're starting to see a trail, if you will, of evidence of where values should be. But, you know, most of these assets are priced quarterly, very different than the daily pricing in the stock market. And if it takes to take, call it 45 to 60 days to complete a transaction from beginning to end, it's now double or triple that.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Little to no liquidity, they're just not happening. And so appraisers need a data set and a set of facts to create a record in order to substantiate lowering values and increasing yields. And they just haven't really had that. Now that's starting to happen and we are seeing a repricing, but it's very, very slow. It will ultimately probably be a much slower repricing than we had in the GFC.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“The private markets react much more slowly and in a much more measured way and without the same sort of level of very, very quick reaction and maybe even overreaction. You hardly ever see that in the private markets. And the reason is you are in the real estate public markets, the market, meaning the stock market is determining value. And there's a lot more at play there than just the value of the real estate assets. Whereas in the private markets, it's appraisal-based. And so it takes a long time for appraisals to really reflect market value. And part of that is the methodology, which has been around forever, which really relies very heavily on comparable transactions. And comparable transactions in a period of, you know,”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“It was great. And so, of course, as works in real estate, that your interest rates come down and the yields on the investments come down and everyone's expectations are, you know, not too far off from where treasuries used to be, right? And that is, you know, the treasuries were so low that you could have a 4%, 5% yield, even 3% on a real estate investment, and still have a nice cushion over treasury. So it was a very, very accommodative environment for real estate. And now that has all changed. And, you know, in private markets, the repricing always takes a lot longer than public markets. And you even see that within real estate, looking at the real estate private markets and the real estate public markets. There's a huge divide.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. No, that doesn't work. So the lack of liquidity is often at the heart of every real estate crisis that we have. And that's really driving a lot of what's going on, which is, of course, all driven by the changes in the interest rates. And we're coming upon six quarters into this new interest rate environment. And we had a nice long free money party that was really good for real estate. It was fantastic for real estate. It could be bad.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“The cost of carry and a lack of liquidity, which is much worse in the commercial markets than it is in the residential markets.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Which is also a lot about safety and keeping people safe and healthy, that there are lots of new construction techniques that it's just safer construction where you might have robots doing things that were very unsafe. You might have drones, photographing buildings instead of having people having to go up on scaffolding. So we have a lot of opportunity in the built environment to mitigate embedded carbon, but also to reduce our use of carbon.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“So, there's lots of ways to get there. And net zero can mean there are various ways and real estate pathways to get to net zero. There are already several buildings, office buildings around the country that are net zero. And that was accomplished through a variety of things. One, using different building techniques, different building materials. You can use green concrete. You can have less embedded carbon. For the institutional real estate industry, embedded carbon is a huge issue because you buy an asset and there's already this giant carbon footprint that you had no control over. And maybe it was created 50 years ago. So that's a whole other issue. But things like green concrete, things like different sensors that you can use that help you build more efficiently. And if you look at ESG and its entirety,”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly Exactly. And, you know, it's a way if you reduce your operating expenses, you're just increasing your bottom line. And if you take an older building that is just like, you know, it's leaking energy all over the place and you upgrade it to have the systems, you have just completely improved the value of your asset because we value real estate based on the net operating income. And that is the key to being able to increase value.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Certification. And if you're near public transportation, every tenant is looking for that. So I really feel that ESG is just table stakes in real estate investing. So we're fortunate that we don't have the controversy.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“We integrate ESG into everything that we do from the very beginning of identifying a potential investment through acquisition, through operations, and through disposition. And there is a lot of political consternation, a lot of a divide, particularly in the United States around ESG, where there's a politicization of ESG. In real estate, we're actually very fortunate because there's really no conflict with ESG, especially the E in real estate investing. If you have a more sustainable building, you're using less energy, you're using less water, you have more efficient systems, you are near public transportation, you have an ESG certification, you're going to have higher income, therefore a higher value of your asset, you're going to be able to track the best tenants. The best tenants are not going into a building that does not have an ESG.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“In many ways, that would be actually the cheaper route to go. Wow. Because you might say a functional building, it's not functional for residential. It doesn't have the windows. It doesn't have the plumbing. You know, you have to break things into units. You don't want units that look like bowling alleys. You need more elevators. I mean, there's just lots of stuff that you need. So there will be some of that done and some of it's happening. Some of it's happening right now in Lower Manhattan and other cities in DC in particular. But it's not going to be a wholesale solution.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“The physical structures don't lend themselves that well. There's probably under 5% of the office stock that would lend itself to that. And it's very expensive in a way you would have to be able to get the land for free. And someone would have to pay to demolish the existing office building. So it's really, very, very difficult.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Never too far from a window. So it is a little bit easier, especially some of the historic buildings downtown, one of the ones that we converted into high-end condos, you know, had been an old JPMorgan building. It was where his office was. So, those buildings were just smaller by definition, smaller floor plates, more windows. There's a lot of capital being raised to convert office to residential, and it's a really kind of a romantic notion that we have too much office and we have a structural shortage of housing. Wouldn't it be like the nicest thing in the world if you could take all of this bad office, if you will, and convert it into affordable housing, wouldn't that be fantastic? First of all, the numbers don't work.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“So we did some of those projects in Lower Manhattan, and Lower Manhattan, the floor plates tend to be smaller. The buildings are thinner and they're taller, right? So”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“And they leave, you can pretty much have a plug and play with the next tenant. So I think it's great that there's less of this kind of conversion into lab space than there had been. But the reality is that a lot of things that are really demographic trends, an aging population, people living longer, advances in healthcare, needing to have green energy sources, needing to be able to create clean water. A lot of this experimentation and a lot of the venture capital funding is all occurring in these lab buildings.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“It's still a growth area. I would say that some of the hype, particularly of the lab space, has been taken out, and I think that's a good thing for a while. People were buying what I would say would be subpar office buildings and turning them into lab buildings. And lab buildings are best purpose-built. There's a lot of extra bells and whistles that you need for a lab building. If you think of like the absolute perfect lab building, it's going to have a lot more load bearing because you're going to have really heavy machinery. It's going to have higher ceilings. It's going to have a lot of natural light. It's going to have extra water. It's going to have redundant electricity. There are experiments being run in these spaces that if you have a power outage, you could lose 15 years worth of work and data. So you really have to have a lot of redundancies in your systems. It's very expensive to build, but the good thing is that it's very reusable. If you have one tenant,”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“That assumes you have modern systems. So that's a big assumption. Not all buildings have the systems that would make that an easy conversion. But there's lots of other things you could do. You could have a gym. You could encourage your employees to get outside, you know, not in the city as much, but other places and increasingly in Manhattan, people have outdoor spaces for their employees so they can get out and get some fresh air, get some sunshine, you know, instead of drinking coffee in a cold dark room, you could sit on a patio. It's those types of things that are good for your physical health and your mental health.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Many ways, but I would say that the primary way that really has been underscored even more so since COVID is in air quality. And air quality is huge. And there is a lot of data around employees feeling better, not getting sick as often, having more energy, not being exhausted, that's around air quality and fresh air in particular is very, very important.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“So, in particular, in office, there are going to be winners and losers, and the winners are going to be, I wouldn't even say just A, not all the A inventory is really going to be a winner. You have to be kind of a high A. You have to be an A that isn't just an A because of its location. It's an A because it also has ESG attributes. It has wellness attributes. It has things that draw employees back to the office and make them want to be there. And you have to in these days when I was young, the office was shelter and a place where people could make sure you worked all day.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“So, right now, I'm going to talk about traditional office, not about medical office or Lab science, but in the traditional office space, we're not investing in a tremendous amount of office right now. Like everyone else, we're in a little bit of a wait and see. We have an existing office portfolio that we're dealing with. And, you know, I'm sitting here in your Bloomberg office and it's a buzzing hive of lots of people. There are many office buildings you could walk into in any city around the world where that would not be the case.”
2024-01-11 · Masters in Business · Cathy Marcus on Commercial Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source