REVIEW Volume 17 | 2019
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Cornell Real Estate REVIEW Volume 17 | 2019 The Baker Program WX New York Women Executives in Real Estate, Alumni Highlights, International Trek: Shanghai, Domestic Trek: LA The RE Industry Cornell RE Conference Recap, Hodes Weill & Associates Institutional Real Estate Allocations Monitor Research Articles Coworking, U.S. Energy Boom, Student Housing, Opportunity Zones, Modular Construction, Middle East Tourism, Finance For Modular Housing 1 22 Table of Contents BAKER PROGRAM ...................................................................................... 6 Cornell Real Estate Women: Highlights from the WX New York Women Executives in Real Estate Panel ........................................................ 8 Alumni Highlight: Jiwon Park....................................................................... 13 Women Executives in Real Estate Alumni Highlight: Ravi Pamidimukkala ........................................................ 14 Panel - pg. 8 Case Competitions ....................................................................................... 16 International Trek: Shanghai ........................................................................ 18 Domestic Trek: Los Angeles ........................................................................ 30 REAL ESTATE INDUSTRY .......................................................................... 40 Real Estate Conference Recap .................................................................... 42 International Trek: Shanghai - pg. 18 Hodes Weill Allocations Monitor................................................................... 50 RESEARCH ARTICLES ............................................................................... 56 A Taxonomy of Coworking Space: Manhattan, NYC Author: Yaoyi Zhou ................................................................................... 58 Tailwinds on the U.S. Gulf Coast: How the Boom in U.S. Energy Domestic Trek: Los Angeles - pg. 30 Production is Creating Opportunities for Real Estate Investment Author: Christopher Trahan ..................................................................... 66 The U.S. Student Housing Market: Overlooked Opportunities Author: Joseph McFalls ............................................................................ 74 Opportunity Zones and New Orleans: A Chance for Affordable Housing Growth Author: Wilson Blum ................................................................................. 82 Modular Construction: A Solution to Affordable Housing Challenges Real Estate Conference Recap - pg. 42 Author: John Thompson ........................................................................... 90 Rising Tourism in Saudi Arabia: Implications for Real Estate Investment Author: Ali Daye ........................................................................................ 98 The Hurdles to Financing Modular Development Author: Daniel Feutz ............................................................................... 106 Research Articles - pg. 56 3 Editorial Board EXECUTIVE EDITORS EDITORS Christopher Trahan Wilson Blum Lera Covington Ali Daye Dustin Dunham Ershad Chagani Andrew Gordon Julian Karel Joe McFalls Rashaad Robinson Jennifer Spritzer Peter Romano Ryan Sequeira John Thompson Jimin Won All manuscript submissions, photocopy and reprint requests, FACULTY ADVISORS and subscription orders should be mailed to: Dr. Michael Tomlan Director of Graduate Studies, Cornell Real Estate Review Graduate Field of Real Estate 489 Statler Hall Cornell University Dustin Jones, Esq. Ithaca, NY 14853 Director of Baker Program in Real Estate Find us online. Website: https://baker.realestate.cornell.edu Email: [email protected] LinkedIn: Cornell Baker Program in Real Estate Podcast: Cornell Real Estate Review 4 Letter from the Editors DEAR READERS, The Editorial Board of the Cornell Real Estate Review is pleased to present Volume 17 (2019). Under the direction of the Baker Program in Real Estate, the Review is a student run publication founded in 2002 as a forum for faculty, professionals, and real estate students to focus on the interdisciplinary nature of real estate. The Review covers a broad range of issues from various real estate fields including design, business economics, engineering, finance, law, planning, development, marketing, and property management. The publication blends informative articles on real estate practice with application-based academic research. This year’s volume includes articles spanning several emerging or fast-changing areas in real estate both domestically and abroad. Cornell Real Estate Women Highlight: WX: New York Women Executives in Real Estate; Alumna Highlight: Jiwon Park; Alumnus Highlight: Ravikanth Pamidimmukkala; Case Competitions; International Baker Program Trek: Shanghai; Domestic Baker Program Trek: Los Angeles; 36th Annual Cornell Real Estate Conference Recap; 2018 Institutional Real Estate Allocations Monitor; A Taxonomy of Coworking Space: Manhattan, NYC; Tailwinds on the U.S. Gulf Coast: How the Boom in U.S. Energy Production Is Creating Opportunities for Real Estate Investment; The U.S. Student Housing Market: Overlooked Opportunities; Opportunity Zones And New Orleans: A Chance For Affordable Housing Growth; Modular Construction: A Solution To Affordable Housing Challenges; Rising Tourism in Saudi Arabia: Implications for Real Estate Investment; The Hurdles To Financing Modular Development. In addition to this publication, the Review staff has published weekly blog articles touching on technology, international real estate, and current events (http://blog.realestate.cornell.edu/). Fifteen Baker Program graduate students, with the assistance of two advisors, share responsibility for publication of the Review, a task which requires extensive time creating, editing, and formatting submissions. We are indebted to all of the contributors and editors for the quality of the content. We especially would like to thank Dr. Michael Tomlan and Baker Program Director Dustin Jones for their continued support and guidance. We hope that you enjoy this volume of the Review. Sincerely, Christopher Trahan (Baker ’19) Ershad Chagani (Baker/MBA ’19) Jennifer Spritzer (Baker/MBA ’19) Joe McFalls (Baker ’20) Wilson Blum (Baker ’20) 5 Baker Program 6 7 Highlights: WX New York Women Executives in Real Estate Written by: Krizia Calmet, Cornell Real Estate Women For the fourth consecutive year, the Cornell Center for Real culture. The more you can communicate, the better,” Estate and Finance and Cornell Real Estate Women hosted Cheryl Boyer, COO of Fulcrum Hospitality stressed that its annual WX Panel Discussion held at Statler Hall on culture misalignment can be detrimental for both employees March 11. WX New York Women Executives in Real Estate and employers. Ana Kalugina, a senior associate in the is an invitation-only association for New York’s executive- company’s commercial real estate banking group, said that, level women actively engaged in the commercial real estate even at large multinational companies like JP Morgan, there industry. Through networking opportunities and educational are sub-cultures within the firm with their own work styles. seminars, WX promotes the advancement of women in the COMPORTMENT industry for its diverse membership of owners, developers, brokers, architects, engineers, bankers, and lawyers. “I’ve learned that people will forget what you said, people Sylvia Melikian (MBA ’76) moderated the four member will forget what you did, but people will never forget how panel of distinguished WX executives who shared their you made them feel.” Melikian referenced the famous experiences and strategies for achieving success in Maya Angelou quote when emphasizing the importance the industry and their respective fields of hospitality, of professional behavioral characteristics ranging from banking, development, and asset management. Over posture, speech fillers, eye contact, and body language. forty undergraduate and graduate students in hotel Kalugina reflected on the value of her communications administration, city and regional planning, real estate, and course at Cornell and urged students to take advantage of business attended the event. After the discussion, panelists the tremendous number of resources while in school. “We and students enjoyed a networking reception in Statler Hall. all have to communicate and communicate effectively,” Below are some highlights from the evening. commented Boyer after stating how she also found her communications class at Cornell helpful. Applebaum IMPORTANCE OF CORPORATE CULTURE AND SELF also stressed the importance of effective communication AWARENESS since 90 percent of communication is nonverbal (vocal, gestures, postures) while the remaining 10 percent is As students prepare for careers in commercial real estate, verbal. Horstmann also mentioned a study in which men Karen Horstmann, portfolio manager of Norges Bank Real apply for jobs when they meet 60 percent of qualifications Estate Management, urged the audience to take risks and while women apply only if they meet 100 percent. She follow their intuitions. In Horstmann’s view, finding the right urged attendees to “stop the negative dialogue and believe corporate culture fit is important to retain employees. She in yourself.” emphasized the importance of cultivating self-awareness and recounted her personal evolution from a shy math NAVIGATING THE “PINK GHETTO” geek at MIT to a confident and vocal business school student. Amy Applebaum, deputy