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Wharton News
Sylvan M. Cohen - Founding Member of Zell/Lurie Real Estate CenterIt is with deep regret that the Zell/Lurie Real Estate Center announces the death of founding member, Sylvan Cohen, Esq. Sylvan was active in our program until his death on September 8th at the age of 87. He was chairman of the Pennsylvania Real Estate Investment Trust, one of the nation's first REITs, and a founder and former president of the International Council of Shopping Centers. His intellect, vitality, and concern for all led to his being honored by the National Conference of Christians and Jews and by The Philadelphia Commission on Human Relations. He had been particularly proud that he had an unbroken record of attendance at Members' Meetings of the Real Estate Center. His wise counsel will be sorely missed by all.
Wall Street Journal Article on Real-Estate Earnings Debate Quotes Professor Joseph Gyourko"Funds from operation" [FFO] has been used to evaluate operating performance in the REIT industry for the past ten years. Analysts of three major Wall Street Firms have de-emphasized FFO and are now forecasting earnings for REITs based on per-share net income that conforms to generally accepted accounting principles. "Earnings per share is what is tracked most widely by the investor universe," commented Professor Gyourko in the Wall Street Journal (8/28/01). " One would think if REITs want to access that universe for capital, it's a good idea to use earnings per share."
"REITs a Good Investment" says Professor Gyourko in the Philadelphia InquirerThe Philadelphia Inquirer (9.4.01) reported that REITs contest with technology stocks has ended like Aesop's fable of the hare and the tortoise. REITs were the turtle and won the race. Professor Joseph Gyourko commented that research showed that real estate was a good way to add diversity to a stock-and-bond portfolio and "get a slightly better return for the same risk." For most investors, "adding a little real estate means buying REIT stock. Most people don't have enough cash to buy a whole building."
Form Follows Function? Professor Rybczynski Discusses the Future of Kennedy Airport's TWA Terminal in an Article for the Wall Street Journal
Professor Georgette Poindexter Delivers Papers Coast to Coast and Across the "Pond"Associate Professor of Real Estate and Legal Studies, Georgette Poindexter, gave the keynote address at a conference on Law and Geography at University College, London entitled "Idolatry of Land" in June. The following month she was in Anchorage, Alaska presenting a paper, "The Emerging Secondary Mortgage Market in Latin America" at the International Real Estate Conference. The paper is forthcoming in the George Washington Journal of International Law. In August, Professor Poindexter was in San Francisco, co-chairing a Modern Real Estate Transactions conference sponsored by ALI- ABA.
Professor Susan Wachter - Cited in Business Week and Guest Speaker in PhiladelphiaHow is the housing market affected by the economic downturn? Falling employment will drag down housing, which is one of the few sectors driving growth. Business Week (5/10/01) reports that it used to be that housing starts and sales led a downturn as banks stopped lending and borrowers grew scared. But now, banks know they can sell the loans they are making to Fannie Mae or Freddie Mac. And, says Susan Wachter, Wharton Professor of Real Estate and Finance "borrowers use adjustable-rate mortgages with the thought that when interest rates go down, they will refinance." Professor Wachter was a guest speaker for Economy.com's annual conference on the role of real estate in the economic cycle. She talked about the greater use of refinancing and ARMs making the housing market less cyclical and helping to support the economy in this slow down. Wachter was also invited to speak on issues of homeownership, counseling and lending outcomes at the Homeownership Education and Counseling Research Discussion at the Federal Reserve in Philadelphia.
Professor Christopher Mayer Featured in Wharton Alumni Magazine and Quoted in Wall Street Jounal
Asuka Nakahara, Zell/Lurie Associate Director, will be Keynote Speaker at ACRES ConferenceAssociate Director Asuka Nakahara, of the Zell/Lurie Real Estate Center, will be the keynote speaker at the Annual Commercial Real Estate Show (ACRES) in October. Mr. Nakahara will speak on changes in the real estate industry based on recent research he conducted, with Professor Gyourko, on how technology will impact brokerage businesses and their affiliates.
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In an article for the Wall Street Journal (8/21/01), Professor Witold Rybczynski writes that both The Municipal Arts Society and the National Trust for Historic Preservation have voiced their opposition to changing the function of Eero Saarinen's TWA terminal at John F. Kennedy International Airport. Insisting that "architectural integrity can only be preserved by continuing to use it as originally intended" is an odd position, given that many landmark buildings have been functionally transformed. Philadelphia's Reading Terminal is now a convention hall and the Auditorium Building in Chicago, once a commercial complex, now serves as a university. Saarinen was one of the first modern architects to question the "form = function" formula. The TWA building - whatever its function - will serve as a reminder of a distant time when airports were glamorous places and plane travel was glamorous and exciting.
An article in the summer edition of the Wharton Alumni Magazine features Real Estate Professor Chris Mayer. Professor Mayer recalls how in 1990 he was about to purchase his first home and was stunned as he learned how housing markets work. The economy was floundering and there were plenty of houses for sale but many appeared overpriced. In addition, there was almost no information to help buyers make the daunting task easier. The experience made Mayer curious about homes as an investment. Unlike the stock market, the real estate market operates in almost a vacuum with only outdated, often inaccessible or unexamined data to provide clues. Mayer coauthored "Loss Aversion and Seller Behavior: Evidence from the Housing Market" which shows that loss aversion is an important factor in seller behavior. This paper is available on the
