The AFIRE Podcast

Despite geopolitical uncertainty and trade tensions, the US economy remains strong, says our latest guest on the AFIRE podcast: Moody's Chief Economist Mark Zandi, the recipient of the Consensus Economics 2024 Forecast Accuracy Award. “So far, the data shows yellow flares everywhere,” Zandi observes. “But no red flares yet.” In conversation with AFIRE CEO Gunnar Branson, Zandi shares his views on the way trade tensions will affect the broader economy, as well as US commercial real estate specifically. The pair also discuss a forthcoming Moody's study on the housing shortage, hotspots in the US CRE market and how ESG and DEI discussions are evolving under the new administration. The conversation concludes with Zandi worrying that the dissolution of Fed independence could set the stage for much higher inflation. “I do think the economy is resilient,” Zandi says. “We should be able to navigate through and, you know, we could be in a very different place a year or two down the road.” Access the episode webpage featuring links to audio-only platforms here: https://www.afire.org/podcast/202511cast/

The US needs nearly 4 million homes. That's a deficit that's been decades in the making. Years' worth of zoning restriction pile-ups, underbuilding, and policy interference have hindered the ability to plan, build, and maintain affordable homes across America. “We're putting requirements in place before we have the foundational infrastructure in place to provide it,” says CEO of Up for Growth Mike Kingsella during the latest episode of the AFIRE podcast. At the same time, the country's energy infrastructure is straining to keep pace, not only with the increased demand in data centers to fuel AI, but also to supply energy at home. So to solve the affordability and energy problem, AFIRE CEO Gunnar Branson and Kingsella discuss how to untangle the legacy decisions that got the U.S. where it is in housing, and how to prevent the same pattern in energy.

Neville Rhone, Jr. is the co-founder and managing partner at Arc Capital Partners, a leading institutional real estate owner and investment manager. Arc is focussed on converting mixed-use properties instead of tearing down and building new. Rhone also is someone who's poised to find opportunities in challenging environments. So where are these opportunities hiding? ”Everything that we do is in the middle market,” says Rhone, who goes on to explain that the middle market is often overlooked. “Blackstone is not paying attention to it; Blue Creek is not paying attention to it.” The middle market often is “too complicated for the smaller investors,” so they also miss out on great opportunities. In Neville Rhone, Jr.'s compelling conversation with AFIRE CEO Gunnar Branson, the two men discuss where the best investment opportunities are hiding in 2025—and why a fresh perspective on investments in this upcoming cycle is so beneficial. Key Moments 00:00 AFIRE CEO Gunnar Branson intro. 01:02 Branson introduces Neville Rhone, Jr. Managing Partner at Arc Capital Partners 02:12 Where are the best opportunities for attainable housing? 06:12 How does Arc approach infill urban areas and create more attainable market-rate housing? 11:07 How does Arc encourage thinking about unconventional investment opportunities in a challenging environment? 15:42 How does Rhone help investors understand that this middle-market approach is a wise, risk-adjusted approach? 26:24 Why should building owners care about sustainability in their investment approach? 29:43 Where are the opportunities hiding in 2025?

Brian Klinksiek thinks we're turning a page to a new market in 2025. “Even with what's happened with long interest rates, there's so much other stuff,” says Klinksiek, the global head of research and strategy at LaSalle Investment Management. “We've got prices more in line with where bond markets are… we have valuations that have caught up with prices, the denominator effect that is resolved, you've got property market fundamentals improving for the beat-up sectors.” The new market makes real estate investing more complex, according to Klinksiek. The task in 2025 involves selecting from a more extensive breakfast menu of options, similar to that of a New York diner—so-called, Klinksiek says, because while there's a lot of choice, some of them are a little dodgy, and you certainly don't want all of them. Making the correct selections on where to invest is more difficult when more sectors are returning to investability. Take office, Klinksiek says. During the pandemic, the link broke down between office-using job creation and occupied square footage. “And what we see now is the beginning of it starting to reassert itself—the link is coming back.” Which means that Klinksiek expects people returning to office “will start to eat away at the mound of vacancies” in 2025. He also likes data centers in the short term, although he believes that innovation will limit the sector's growth at some point in future. Listen or watch the episode on your favorite platform at: https://www.afire.org/podcast/202508cast/ Key Moments 00:00 AFIRE CEO Gunnar Branson intro 01:24 How should investors approach CRE trends in 2025? 05:02 Will office surprise investors in 2025? 08:52 Will data centres continue to be the star player in CRE in 2025 despite scarcity?

The next five years are expected to bring groundbreaking tech advancements in augmented (AR) and virtual (VR) reality. Real estate—a traditionally unhurried adopter of new tech—isn't immune to this shift, and while this could bring about new revenue streams for property owners, it also creates potential liabilities. Are real estate owners prepared? To learn the answer, we consulted with Neil Mandt. In addition to being a speaker at the AFIRE Winter Conference, Mandt is a five-time Emmy winner and the founder & CEO of Digital Rights Management, a tech platform offering property owners risk analysis and licensing opportunities from digital media companies. Mandt warns real estate owners to start thinking about securing the digital rights of their property. "Buildings are not the only real estate in the world," Mandt says on this episode of the AFIRE podcast, signalling the approach of a new age for property owners as augmented and virtual reality applications become more prevalent through society. AFIRE CEO Gunnar Branson sat down with Neil Mandt to discuss digital media rights licensing and what that could mean for real estate owners and investors.

In 2024 commercial real estate investors were confronted with tremendous changes. What's the biggest change that will surprise us in 2025—and how should the investment community adjust to those changes? That's just one of the topics we tackle in the latest episode of our podcast series talking with commercial real estate experts about the year ahead. Jim Costello is the Chief Economist for MSCI Real Assets—and someone who always has a measured and data-driven forecast of what's going to happen in the US real estate market, especially as it pertains to cross-border investment. “If people are not taking a dispassionate point of view…and taking a full look at the range of potential changes, they're going to be shocked and surprised,” explains Costello. How will the new administration's policies affect trade? Tariffs? Tax policies? Will they decrease regulatory burdens? And how will that affect inflation? “Those are real concerns,” says Costello. “But any policy change can cut two ways… there are other things that other types of investors are excited about”—and both Branson and Costello describe them in detail in this special mini-episode of the AFIRE podcast. Other themes: What are the surprising bets Jim Costello would make in 2025? Why office could surprise us in the year ahead How will migration patterns change in the US in 2025?

Contrary to reports of the death of office, demand for certain classes of office space is coming back so strong that New York City developers are struggling to meet the demand. Melissa Román Burch is New York City Economic Development Corporation's Chief Operating Officer, and says, “Office is making a comeback. We fundamentally do not have enough class A and A+ office space in New York City, and we have too much class B and C.” In fact, Burch says New York currently has 2.4 million square feet of office space under construction that will be delivered by 2026—and almost 80% of that space already is spoken for. “So, what we're going to see really unlock for New York City in 2025 is continued investment into modernizing office space and delivering new,” explains Burch. “We need to do this because we know that New York City will continue to be powered by a very strong economy, excellent job growth, and a global center for work.” Other themes: - How sustainability plays a part in office resurgence - What class A and A+ buildings will look like in 2025 - How class A and A+ buildings attract different usage patterns - How office can drive investor interest in underserved areas Watch the video or listen to the audio episode for answers.

How will we get out of the problems in the office sector in the US? How will we solve the housing crisis? Will we see an escalating environment of global trade tensions getting in the way of cross-border investing? What do you do if you can't count on dropping interest rates? Spencer Levy is the global client strategist and senior economic advisor at CBRE—and someone who's never afraid to tell you what he thinks. In the latest mini-episode to post in our series about commercial real estate in 2025, he answers these questions and more. “I think the big thing is that for the last ten years, a lot of people in our business did a lot of successful, profitable deals because cap rates were compressing,” Levy says. “Cap rates have now expanded… so next year, and probably for the next several years, we're going to see who are the really good real estate operators.” Other themes: - Why it's going to be more of a sub-sub-market selection game - Why office will surprise us in 2025 - Why appraisers and regulators need more love in 2025 Watch the video or listen to the audio episode for answers.

We left 2024 expecting surprises from political change and geopolitical shifts. But according to Rebecca Rockey, Deputy Chief Economist and Global Head of Forecasting at Cushman & Wakefield, the actual surprise in store during the year ahead may be how little things change. For example, some anticipate a widespread sell off of distressed commercial real estate assets in 2025. But Rockey believes the pace will be much slower than many expect. Rather than a cliff event, she predicts a slow burn that continues well into 2026 and perhaps even into 2027. “I don't think we will have a shortage of surprises out of DC,” says Rockey, who lives in the area. “But I think there are forces in motion that are going to play out next year, regardless of what's happening in the policy environment.” “…specifically around the capital markets, which are a defining feature of this cycle for commercial real estate. We've clearly gone through some repricing, we've seen capital sources start to shift around in response to that, and as we move forward this year those shifts in capital sources will continue to play out—and I think those changes will be much more prolonged than just 2025.” Other themes: What shifts does Rockey expect in the capital markets? Will distressed deals tick up in the year ahead—and by how much? Where the best opportunities are hiding in 2025? Watch the video or listen to the audio episode for answers.

Our special New Year series provides themes to monitor in the year ahead for commercial real estate investors. This episode of the AFIRE Podcast features R. Byron Carlock Jr., PWC's former US real estate leader and AFIRE's current director of legal and tax, discussing the most important investment to make in 2025. AFIRE CEO Gunnar Branson asks Carlock: You can make one bet in 2025—what is that investment you'll make this year? What is it that commercial real estate investors need to worry about in 2025? Will 2025 be the year that regulators grow more comfortable with density in our cities? How should investors be thinking about the next five to ten years? Who will be the leaders in real estate investing over the next 10 years? What do you hope will happen for our built environments in 2025? As we look out at the year ahead—should we expect more surprises from the capital markets? What about politics? Geopolitics? Will we see more friction for cross-border investing—or less? Watch the video or listen to the audio episode for answers.

What are the markets that commercial real estate investors are focused on in 2025? Will markets even matter this year? And which markets are best positioned to outperform? Sabrina Unger is the managing director and the head of research and strategy at American Realty Advisors—and one of the people AFIRE turns to for nuanced commentary on what's really going on in commercial real estate. “Market selection as a driver of relative over- or under-performance may actually be reduced relative to some of the other levers that we have to pull when it comes to making geographic selection within a sector,” says Unger. “When we look back over history . . . the dispersion between the best and worst multifamily markets—that dispersion is the widest during periods of adjustment.” So, Unger says, dispersions were widest during the 2008 global financial crisis, the supply surge in 2016 and during the pandemic. “But outside these periods, market fundamentals… tend to cluster much closer together.” Consequently, the market narrative may actually be disguising really strong sub-market opportunities. Which is why her team has implemented a new sub-market targeting strategy. Or, in her words, “There's a way to take advantage of that arbitrage.”

A recent report from Cushman & Wakefield suggests that “urban doom loops” can be halted and reversed when investors, developers, and planners optimize the built environment for a balance of “live, work, and play” design suited to modern (and continually evolving) social tastes. https://www.afire.org/podcast/202413cast/ In this episode of the AFIRE Podcast, Rebecca Rockey, deputy chief economist and global head of forecasting for Cushman & Wakefield joins AFIRE CEO Gunnar Branson to discuss the report's key findings. The report, “Reimagining Cities: Disrupting the Urban Doom Loop,” shows that an average US downtown has about 70% of its real estate devoted to work purposes. But the optimal pie chart for walkable urban places (WalkUPs) is far more mixed, with work environments accounting for just 42% of real estate, while 31% is for live purposes and 26% for play. Consequently, in this fascinating conversation focused on the reinvigoration of American cities after the pandemic, Rockey suggests that downtowns seeking to counteract the doom loop decrease the proportion of “work” and increase the amount of real estate devoted to live and play purposes – and that investors, developers, and planners can lead the charge.

Many of the challenges facing the US real estate market mirror those seen in the Asia-Pacific region. https://www.afire.org/podcast/202412cast/ So as investors are planning for the rest of the year, it's the perfect time to speak with Simon Treacy of Singapore's CapitaLand Investment, which manages properties in more than 40 countries. Treacy is the CEO of CapitaLand's Private Equity Real Estate, Real Assets division, and says “The world is pretty much synchronized now. The same discussions you're having in the US—we're having in most markets around Asia.” On tap: What are Treacy's predictions for the rest of 2024? What's in store for valuations? How will changing interest rates affect global property markets? And are we finally going to see a breakthrough from a sluggish market to something that's a little more active? Plus: Lessons for the US market from an Asian perspective. “We are starting to see [that] we're coming towards the end game of the interest rate cycle,” Treacy says. “And as a consequence of that, we're just starting to see transactions click up a little bit more.”

How can affordable housing become a reality in cities like New York, whose current blueprint and zoning regulation is not easily suited to modern market-rate and affordable housing development? https://www.afire.org/podcast/202411cast/ In our latest episode of the AFIRE podcast, CEO and host Gunnar Branson speaks with David Kramer, president of the Hudson Companies, a leading developer in NYC, about what it takes to build affordable housing in a city made for anything but. It's a wide-ranging, entertaining conversation about the challenges of living and developing real estate in one of the most vibrant cities in the world—and America's key “gateway” city. Kramer and Branson explore the tension between developer's public profiles, and the realities of trying to build new projects in a sustainable way, while also nurturing a city that is hospitable to people from all walks of life. Kramer also takes down the common misconception that landlords determine rents. In fact, Kramer says that achieving housing affordability starts with increasing the number of units in a given market. “The solution . . . should not be chastising landlords and trying to limit rent increases—it should be increasing the supply.” With decades-worth of insider perspective and a whole host of entertaining analogies, Kramer's interview provides a portrait of a New York developer doing his best to contribute to a city where people love to be—and what other cities can learn from this approach.

Forecasters are predicting another record-hot summer in North America. What's hard to predict, though, is how environmental disasters will affect the real estate market around the country. https://www.afire.org/podcast/202409cast/ Intense hurricanes, droughts and untamable wildfires are all playing roles in the increase of premiums—bringing insurance to the forefront of real estate investing like never before. …which is why we're talking now, in the latest episode of the AFIRE Podcast, with president and general counsel of EDGE Fund Advisors, Tiffany Sanders. The firm had owned their 1.1 million square foot building in downtown Manhattan for five months before Hurricane Sandy wreaked havoc on New York City in 2013, with tenants that included a major bank and two media companies. “[The property] was supposed to be a low-maintenance dividend-producing machine,” she explains. What followed Hurricane Sandy was a long and arduous process of recovering from the storm's aftermath—pumping out water from the building, replacing electrical equipment that had been fully submerged, and repairing damaged interiors. “You can't turn that stuff back on,” Sanders recalls. “You have to rebuild it.” For Sanders, the process yielded a better understanding of navigating insurance costs, preparing for the worst, and averting crises—all of which are things other investors may want to consider as we enter uncharted territory this summer. “We underestimate our vulnerability and we overestimate our readiness,” Sanders says. After four years and $10M in flooding restoration, Sanders recounts her experience dealing with an environmental disaster and redesigning the building to keep tenants afloat post-storm. She also shares what she says other building owners should know about planning for climate disasters in the years ahead.

Melissa Román Burch is New York City Economic Development Corporation's chief operating officer—and one of the speakers at the AFIRE Annual Member Meeting in New York City this September. https://www.afire.org/podcast/202408cast/ She says the five boroughs are home to more than a million buildings and unprecedented employment growth, with more private sector jobs than ever before. But the city's housing crisis threatens to limit economic development. “For more than 40 years, job growth has outpaced housing growth,” Burch tells host Gunnar Branson, AFIRE CEO. “This is a multi-decade problem… that has reached an inflection point.” Rental-unit vacancy rate is down to a historic low, around 1.4%, she says, while at the same time, the office sector faces occupancy challenges, with more than 100 million square feet sitting empty. To address the housing crisis, the city has unveiled a housing moonshot—a goal to build 500,000 new units over the next decade, about double the typical rate of supply. Exactly how the city will go about achieving that, on some of the most expensive real estate in the world, is topic number one in our latest podcast episode, now streaming on all podcast platforms.

Mosaic Real Estate Investors CEO Ethan Penner, the latest guest on the AFIRE Podcast, doesn't believe the office sector has hit bottom. https://www.afire.org/podcast/202407cast/ Yet, at the beginning of 2024, Penner and his business partner Chad Carpenter announced a new US office-focused real estate finance company, Reven Office REIT, that intended to raise $1 billion to provide office owners and investors with bespoke financing solutions. “Office is a very complicated investment asset today,” Penner says. “It's something that has inspired fear in investors, and rightly so. But what's interesting is that when fear becomes pervasive, markets are abandoned. And of course, babies are thrown out with bathwater.” Penner and his partners are trying to find those “babies”—the office investments that continue to have upside, despite ongoing challenges for the sector. In this episode of the AFIRE podcast, Penner explains his sometimes counterintuitive take on the health of the office sector with podcast host and AFIRE CEO, Gunnar Branson. Aside from his enthusiasm for finding overlooked gems in the sector, Penner holds concerns about the effect of AI on the future of office. “The [threat] that looms largest, that's on the horizon, that people are in denial about,” Penner says, “is the impact of AI on jobs, period. I think that there's a real threat— technology happens faster than people can imagine.”

Commercial real estate in 2024 is dominated by uncertainty. Midway through 2024, nobody is buying at prices people are willing to sell for, and banks lack any incentive to bridge the gap between asking prices and active offers. https://www.afire.org/podcast/202406cast/ …not to forget the looming question that AFIRE CEO Gunnar Branson keeps coming back to: “How much will climate change cost us?” “Lots of firms had hoped that this was the year when we could move back in, in a big way,” says Mary Ludgin, a senior advisor and equity owner for Heitman, a global real estate investment management firm headquartered in Chicago. Now, Ludgin says, “we're still playing the waiting game.” So where do we go from here? How does all this uncertainty get resolved? As one of the industry's most insightful commentators, Ludgin provides her best insights on how the market will pan out over the rest of the year. Her most pointed guidance for investors is to weather this uncertainty by diversifying on as many fronts as possible, from property types to locations, climate change exposure, and geopolitical risk factors. “As somebody that's been trying to predict the future for my 35-year career in this field,” Ludgin says, “I've realized that there are things you can predict. And then there are the black swans—and the only way to buttress against the black swan… is to diversify.”

With all of the other troubles currently affecting commercial real estate, should ESG still be a priority? https://www.afire.org/podcast/202405cast/ Compliance with established environmental, social, and governance (ESG) became a critical measure of real estate performance over the past decade. But with the current slate of challenges faced by CRE—everything from high costs to building and infrastructure obsolescence—some investors are feeling inclined to put ESG lower on the punch list. ...but that would be a mistake, argues Patrick Richard, CEO of Stoneweg US, the US-based subsidiary of the Swiss real estate firm. In fact, in this new episode of the AFIRE Podcast, in conversation with AFIRE CEO Gunnar Branson, Richard builds a compelling case that investors should prioritize ESG investments as a way to generate higher returns on investment—especially now. “One thing that sustainability does is protect the value of your assets,” explains Richard, who sees ESG prioritization as a way to decrease risk and increase revenue—critical differentiators in the current real estate market. Richard explains how investing in climate resilience can decrease insurance premiums and lender interest rates, currently significant cost centers affecting pro formas. By investing with an ESG mindset, despite some current external financial or philosophical pressures, Richard says: “Not only are you protecting your assets, but you're creating value at the same time."

Affordable housing may be the most important issue facing the commercial real estate industry today. Statistics show a shortage of more than seven million homes in the US alone. https://www.afire.org/podcast/202404cast/ More than half a million people are experiencing homelessness, and high interest rates and a growing population are making housing more expensive for more people. So—how do we solve the problem? What options are available to those of us who are investors, developers, builders, owners, and operators? To get some answers on the current housing situation—and future-focused solutions—AFIRE CEO and podcast host Gunnar Branson recently sat down with Paul Bernard, president and CEO of Affordable Homes & Communities, a nonprofit developer with a focus on housing creation in Maryland, Virginia, and Washington, DC. Bernard argues that the housing crisis is partly caused by barriers to new construction, leading to high homelessness rates, high housing costs and insufficient supply. Affordable housing is not a commodity, Bernard says. Instead, it's an asset class where developers and investors can follow concrete steps to alleviate housing availability issues and still find returns. According to Bernard, building more affordable developments requires an all-hands-on-deck approach, starting with a new narrative that will change public opinion of affordable housing, tax credits and renewed, innovative, problem-solving partnerships with nonprofits, for-profits and the public sector.

Many leaders believe this is the key to becoming fully immune to all future risks—but evading risk forever is just unrealistic. Risk plays a big part in commercial real estate. To thrive, it's crucial to adopt a proactive approach to manage risks effectively. So how can commercial real estate investors thrive in a time of such incredible volatility, change and blindness? How do we thrive amid constant uncertainty and exposure to risk? On this new episode of the AFIRE Podcast, AFIRE CEO Gunnar Branson sits down with General Stan McChrystal (Ret.), CEO and Chairman of the McChrystal Group, to discuss the risks facing investors during this time of heightened uncertainty in commercial real estate. As a retired four-star general in the US Army, General McChrystal translates his military training to educate leaders in commercial real estate on how to employ a proactive approach to managing risks instead of steering clear of possible failures. There's this “unwillingness to be realistic about risk,” says McChrystal. “As a consequence, when you try to mitigate risk to zero, it takes so long that you've priced yourself out of the option.” In this riveting conversation about risk, General McChrystal walks us through what's considered effective communication, how avoiding mistakes amounts to the first blunder, and how to fight back against our inclination to avoid risk. https://www.afire.org/podcast/202403cast

Technology can be enormously disruptive to commercial real estate. Remote work is responsible for the global devaluation of office properties. Artificial intelligence (AI) is already changing the way we live and work. So what will be the effect of AI on institutional investment strategies? https://www.afire.org/podcast/202402cast/ To get at some answers, AFIRE CEO Gunnar Branson talked to one of his favorite futurist investors, Jeffrey Kanne, president and CEO of National Real Estate Advisors, an AFIRE member firm and investment manager specializing in a build-to-core strategy, developing and managing large-scale, urban commercial and multifamily projects for its institutional client accounts. “The advent of AI as a technological tool is going to greatly increase the rate of change,” Kanne tells Branson. “I'm very nervous about where you can place money and think it's safe.” The best opportunity for investment, Kanne believes, is in data centers that provide consistent power and temperature-controlled environments for the Googles, OpenAIs and Microsofts of the world. With that in mind, Kanne and Branson discuss how investors can enter the data center market. “It's not rocket science,” Kanne says, while outlining potential pitfalls and barriers to entry for new operators. “It's incumbent on all of us as investors to think about what the world will be like in five years, ten years, fifteen years,” Kanne says. “When I look ahead, data centers are a good place to focus on.”

Cognitive dissonance abounds in commercial real estate. On the one hand, the Fed is citing strong employment figures and predicting a soft landing. https://www.afire.org/podcast/202401cast/ And yet, the commercial real estate industry is navigating serious issues in the office sector. Will office distress trigger bank failures? Will those bank failures affect the broader economy? When will interest rates go down? And when they do, will the Fed cut enough to benefit commercial real estate?  In his conversation with AFIRE CEO Gunnar Branson, Moody's Analytics Chief Economist Mark Zandi sounds off on all these topics and more. “If I was at the Fed, I would argue: let's cut rates now,” Zandi says. “Obviously there's a lot of uncertainty, but I think the most likely scenario is June.” Plus: Zandi talks AI, China and other geopolitical risks, and how he expects the upcoming US election will affect market volatility. Listen now on your favorite podcast platform, or watch on the AFIRE YouTube channel.

On the tail end of the hottest year on human record, it's clear that climate change is already here—and not slowing down. In the years ahead, the effects of climate change will pose real hardships for billions of people around the world. The challenge of climate change is clear, especially for real estate, as explained in the first of this special two-part series. Now, in this second and final entry of the latest AFIRE Podcast—inspired by the special climate change section featured in the most recent issue of AFIRE's award-winning Summit Journal, and sponsored by the global ESG consultancy, AccountAbility—AFIRE CEO Gunnar Branson and Summit Journal Editor-in-Chief Benjamin van Loon propose that climate change can also represent opportunity for forward-thinking investors. Climate migration will require new housing in resilient geographies, creating demand for fast and efficient construction methods. Extreme weather and other disasters will highlight the need for more robust building techniques. And an historically hotter world also could usher in carbon markets that use Web 3.0 to better reflect the actual cost of assets that contribute to global warming. (Watch the video version of this episode on the AFIRE YouTube channel: https://www.youtube.com/watch?v=2_Hxizapwf0&ab_channel=AFIRE) Featuring interviews with: Jacques Gordon, Executive in Residence, MIT Center for Real Estate Bob Geiger, Executive Director, Partner Engineering & Science Parag Khanna, Founder and CEO, Climate Alpha Zhengzhen Tan, Research Scientist, MIT Center for Real Estate

The year 2023 has been the hottest year in recent record—and it will likely be the coldest year for the rest of our lives. In the face of these record-breaking numbers and climate events, 2023 also proved to be a year that real estate investors lead the charge in confronting the constantly evolving challenges of climate change—including insurance rate hikes, migration and population changes, and the irrational implications derived from “the tragedy of the horizon.” In this, the first of a special two-part episode—inspired by the special climate change section featured in the most recent issue of AFIRE's award-winning Summit Journal, and sponsored by the global ESG consultancy, AccountAbility—AFIRE CEO Gunnar Branson and Summit Journal Editor-in-Chief Benjamin van Loon take viewers and listeners through a conversation with the industry's top thought leaders to explore how investors can prepare for the impending intersection of climate change, global investment, and the future of real estate. (Watch the video version of this episode on the AFIRE YouTube channel: https://www.youtube.com/watch?v=JWYO08tKnZA&ab_channel=AFIRE) Featuring interviews with (in order): Bob Geiger, Executive Director, Partner Engineering & Science Hans Nordby, Head of Research and Analytics, Lionstone Investments Jacques Gordon, Executive in Residence, MIT Center for Real Estate Parag Khanna, Founder and CEO, Climate Alpha

Despite the overwrought headlines and apocalyptic economic forecasts, office buildings still matter. At the same time, the use of office is changing and an increasing need for sustainability requires all office owners and developers to alter their approach. https://www.afire.org/podcast/202311cast/ According to Anthony Malkin of Empire State Realty Trust, the altered approach won't be easy or business-as-usual, but there is a compelling future. Office buildings matter, including the ones that are already built. The use of office is changing dramatically, and office owners are now required to alter their approach to the business. Sustainability and decreasing carbon is now a given. Flexibility for tenants no longer just part of a wish list. Anthony Malkin, President, Chairman, and CEO of Empire State Realty Trust, joins the AFIRE Podcast to discuss how, despite the overwrought headlines and challenge of changing existing office buildings to fit the times there is a compelling future, even if it isn't easy or business-as-usual. As Malkin explains, if you can make it with the century-old Empire State Building, you can make it anywhere.

Every headline suggest that our cities are in serious trouble. How will that impact real estate investors, what can be done about it, and what is the future of our cities? https://www.afire.org/podcast/202310cast/ In a recent op-ed for the New York Times, Ed Glaeser—the Fred & Eleanor Glimp Professor of Economics and Chair of the Department of Economics at Harvard University—wrote of the future of New York following the pandemic, stating: “The economic future of the city that never sleeps depends on embracing this shift from vocation to recreation and ensuring that New Yorkers with a wide range of talents want to spend their nights downtown, even if they are spending their days on Zoom. We are witnessing the dawn of a new kind of urban area: the Playground City.” Glaeser, the author of New York Times best-selling books Triumph of the City and Survival of the City, recently down with AFIRE Podcast host Gunnar Branson to discuss how the state of cities in America has changed dramatically and what leaders need to do now to face and overcome the challenges of today.

A range of fundamental change is forcing real estate investors to closely examine how, where, and why they are investing. The change is not complete and investors have to learn how to adapt even as they don't have a clear formula for how it might be done. https://www.afire.org/podcast/202309cast/ On this episode of the AFIRE Podcast, Mandi Wedin, Founder and CEO of Feroce Real Estate Advisors, draws on her experience growing up in Alaska to help investors learn a “frontier mentality” to navigate and thrive in an unpredictable environment. She sat down on May 5, 2023 with AFIRE CEO and podcast host Gunnar Branson to explore how leaders in real estate can surf the waves of change coming from ESG, Demographics, AI, and the Metaverse. Not unlike dealing with bears in the wild, preparation, flexibility, and acceptance are crucial to surviving and thriving the challenges to come.

Hans Nordby, the Head of Analytics and Research for Lionstone Investments, explains how demographic changes are transforming the construction, location, and value of commercial real estate across the board. https://www.afire.org/podcast/202308cast/ The challenges of inflation, interest rates, and back to the office can be overwhelming, but changing demographic forces may be the biggest story of our time. How will downtowns like San Francisco, Chicago, and Washington, DC recover from their considerable challenges? What will become of the preponderance of obsolete office buildings? How will people house themselves? It's all changing in real time—and so is what people want. According to Nordby, mixed-use will generally outperform—because that's what people want. He sat down on May 4, 2023 with AFIRE CEO and podcast host Gunnar Branson to discuss how real estate will navigate the waves of demographic change in the years ahead.

Matt Pomeroy, Director of Valuation, Reporting, and Analytics for Chatham Financial, discusses the challenge of determining accurate valuations when the market is essentially frozen in place. Without comparable trades, how can investors know what they have? https://www.afire.org/podcast/202307cast/ Fast rising interest rates and fast shrinking demand for office space is a significant challenge for real estate portfolios. Bid/ask spreads have widened to the point that only the most distressed sales can take place. Valuation of real estate values has always depended on comparable trades but what happens when there are almost no trades? Public real estate markets suggest that values have dropped by more than 20%, but in private markets, it is difficult to determine exactly what a portfolio may be worth at this point in time. What is an investor to do then, besides wait? According to Matt Pomeroy, Director of Valuation, Reporting, and Analytics for Chatham Financial, it's “ill-advised” to simply do nothing.“ Pomeroy sat down on April 11, 2023 with AFIRE CEO and podcast host Gunnar Branson to discuss how the industry can find new and better ways to adjust values without comparable transactions.

Scott Rechler, CEO of RXR Realty and Board Member of the Federal Reserve Bank of New York, discusses how 20% of extant office buildings may now be obsolete in the post-COVID era and how investors can transition to a new “regime” of real estate investing. https://www.afire.org/podcast/202306cast/ Real estate is going through a significant transition beyond the usual ups and downs of the economic cycle. The risks are changing. The opportunities are changing. And office buildings in particular—historically favored by institutional investors looking for safe, long-term investments—are changing, too. When it comes to office: How can investors transition their investment asset management strategy to cross the chasm from where we were just a few years ago to where we will be over the next decade? Scott Rechler, CEO of RXR Realty and Board Member of the Federal Reserve Bank of New York, sat down in April 2023 with AFIRE CEO and podcast host Gunnar Branson to talk about how he is working through his own portfolio to find ways to meet the future on its own terms. Depending on the asset, Rechler says, everything from conversion to disposition must be considered, and whether an office remains an office, or becomes something else altogether, crossing the chasm to the future will not be easy. But success will start with transparency and meaningful leadership.

Bill Ferguson, President and Carrie Nowicki, COO of the Ferguson Charitable Foundation Centers for Leadership Excellence, discuss how real estate can bring an entire generation of racially and ethnically diverse students into the industry. https://www.afire.org/podcast/202305cast/ The Centers for Leadership Excellence (CLE), sponsored by the Ferguson Charitable Foundation, has developed partnerships with fourteen colleges nationwide to provide scholarships, mentoring, and internships while developing real estate related curriculums in those colleges. The real estate industry as it stands today is not as diverse as it could be, and companies are missing out on powerful potential talent. The program is focused on historically black colleges and universities as well as those with highly diverse student bodies such as Howard University, University of Virginia, Baruch College, and Arizona State University. Bill Ferguson, President, and Carrie Nowicki, COO, of the Centers for Leadership Excellence sat down in March 2023 with AFIRE CEO and podcast host Gunnar Branson, discussing their conviction that diversity in real estate is essential for the future.

Parag Khanna, Founder & CEO of Climate Alpha and international bestselling author of seven books, including Move and Connectography, discusses how climate change, migration, and sophisticated data science can and should change investment strategy. https://www.afire.org/podcast/202304cast/ Beyond the immediate crisis of inflation, interest rate increases, and even bank failures, are far more impactful threats to investment strategy. Where people are going thanks to increasing climate pressures will impact asset values not just in the far future but within the timeline of existing investments. What should investors do to better invest and better protect their existing portfolios? Parag Khanna, Founder and CEO of Climate Alpha, an AI-powered analytics platform that drives future-proof real estate strategies, recently with AFIRE CEO and podcast host Gunnar Branson to discuss how climate change, migration, and sophisticated data science can—and should—change investment strategy for years to come, as the world now faces some of the most drastic climate challenges seen in this epoch.

Ethan Penner, CEO of Mosaic Real Estate Investors, reflects on the current landscape of real estate dislocation and how investors need to change their understanding of risks and opportunities. https://www.afire.org/podcast/202303cast/ How should I invest now—in this market? Will distress create meaningful discounts? If I buy now, am I catching a falling knife? Is the conservative deal of the past still conservative today? As real estate investors, we all face an interesting, uncertain—and perhaps even weird—real estate market right now, and there are a lot of questions. Ethan Penner, CEO of Mosaic Real Estate Investors, sat down on March 7, 2023 with AFIRE CEO and podcast host Gunnar Branson, challenging conventional thinking based on what has worked on the past—and presenting practical insights about how investors can avoid thinking mistakes and navigate the more challenging aspects of the current (and coming) real estate cycle.

Michael Mandel, Co-Founder and CEO of CompStak, a marketplace for CRE data, discusses how the use of data is (and is not) changing the practice of global investing. https://www.afire.org/podcast/202302cast/ When it comes to big data, alternative data sets, data science, and analytics—how do we know if real estate investors approaching new data resources in the right way? How is data changing the game and how can organizations make better use of it? Can we better understand the value of any given asset by counting the number of trees nearby? Can that replace the data fundamentals around leasing and sales that we have relied on for decades? Or is this simply an expansion of augmentation of what we already do? Michael Mandel, Co-Founder and CEO of CompStak, sat down in January 2023 with AFIRE CEO and podcast host Gunnar Branson to talk about how investors need to combine a strong grasp of fundamental data with the more exotic new sources of insight coming to market. How should investors better discern the quality and the meaning of data as they compete in a fast moving and volatile real estate landscape? Listen now for more insights.

Jim Costello, Chief Economist for MSCI Real Estate, discusses the state of real estate investing in 2023 and the challenges of a very different economic climate. https://www.afire.org/podcast/ep202301/ Optimism seems to be rising in real estate firms despite the considerable economic and geopolitical headwinds investors face in 2023, but is that justified? Even if the Federal Reserve lets up in the next few months, it is difficult to believe that the world will return to “normal” this year. Jim Costello, Chief Economist for MSCI Real Estate, sat down on February 2, 2023 with AFIRE CEO and podcast host Gunnar Branson to talk about how the environment investors face in 2023 is fundamentally different than 2022. COVID may be less of an issue, but serious challenges remain, whether it's inflation, supply chain issues, dramatic change in the use of office properties, and housing shortages—2023 will not be an easy ride. How will climate change affect the continued growth of the sun belt? What kind of distress are we likely to see? What are the opportunities and what are the costs?

While the real estate industry has long understood the need for data, it still struggles with connecting information to decision making. New strides in data science could change that. https://www.afire.org/podcast/202222cast/ According to Brian Biggs, Vice President of Research for Grosvenor Americas, advances in data availability and data science techniques are bringing new transparency to historically opaque real estate markets. On this episode of the AFIRE Podcast, recorded in November 2022, Biggs joins podcast host and AFIRE CEO Gunnar Branson to talk about how a data science approach to real estate analysis can reveal fundamental relationships between building-specific features, amenities in the built environment, sociodemographic factors, and real estate pricing at a scale previously unthinkable.

AFIRE CEO and podcast host Gunnar Branson recently sat down with Jacques Gordon of LaSalle Investment Management at a partner event for Informa's Global Property Market Forum for a candid conversation about the future of global real estate investment. https://www.afire.org/podcast/202221cast/ As Global Strategist for LaSalle, Gordon has a long tenure of leadership and strategy for global institutional investment. This discussion, hosted by LaSalle and designed for institutional investors, will likely be one of Gordon's last public conversations before he retires from LaSalle in January 2023 to become the first “Executive-in-Residence” at MIT beginning in Spring 2023. The wide-ranging conversation, a special year-end episode of the AFIRE Podcast cast, covers the current state of the real estate market and future strategies as the global real estate investment industry rewrites some of its best practices for the years ahead. “Real estate isn't something you do quarter-by-quarter,” Gordon says. “It generally is a five- to ten-year bet.” In this context, smart money wins, especially as many countries move to a highly-leveraged approach to cash flows.

Neil Shearing, Group Chief Economist for Capital Economics, joins the AFIRE Podcast with Gunnar Branson to talk about how global economics are “resetting” CRE markets. https://www.afire.org/podcast/202220cast/ The most recent quarter of 2022 has been a constant process of downgraded expectations for commercial real estate investors and managers. War in Europe, persistent inflation, and supply chain challenges are only part of a perfect storm that is totally disrupting the global balance of the past 3 decades. If the volatility of the present continues, what global forces will investment leaders need to track for the months ahead? Neil Shearing, Group Chief Economist for Capital Economics, an independent economic research business based in London, sat down in November 2022 with AFIRE CEO and podcast host Gunnar Branson to discuss his latest insights on how global economics are forcing a reset of CRE markets.

(Featuring Michael Cooper, President, Dream Unlimited) https://www.afire.org/podcast/202219cast/ The practice and expectations of investing across all industries is undergoing major upheaval and the key to stability will mean looking beyond profit for profit's sake. While most think of disruption as an effect of technological change, this one is a product of environmental and social concerns. In the face of imminent threats from climate change, income inequality, and increasingly unaffordable housing, real estate investors and developers are being forced to think beyond mere profit to the roles their organizations can play in addressing these challenges. In this episode, Michael Cooper, President and Chief Responsible Officer of Dream Unlimited, joins AFIRE CEO Gunnar Branson on the AFIRE Podcast to discuss impact investing and how it can provide a disruption-proof strategy. Findings are based on the recent article Mr. Cooper wrote for AFIRE Summit Journal.

(Featuring Brian Klinksiek, Global Head of Research and Strategy for LaSalle Investment Management) www.afire.org/podcast/202218cast/ Across the entire institutional investment industry right now, the notion of fear—stated or implied—is at the center of how we discuss the future. The question for investors is: is this fear grounded in reality, or response? In this two-part episode, Brian Klinksiek, incoming Global Head of Research and Strategy for LaSalle Investment Management, joins AFIRE CEO Gunnar Branson on the AFIRE Podcast to find some answers.

(Featuring Brian Klinksiek, Global Head of Research and Strategy for LaSalle Investment Management) https://www.afire.org/podcast/202218cast/ Across the entire institutional investment industry right now, the notion of fear—stated or implied—is at the center of how we discuss the future. The question for investors is: is this fear grounded in reality, or response? In this two-part episode, Brian Klinksiek, incoming Global Head of Research and Strategy for LaSalle Investment Management, joins AFIRE CEO Gunnar Branson on the AFIRE Podcast to find some answers.

Jamie Kingsley (NCREIF and PREA) and Constantin Sorlescu (INREV) join the AFIRE Podcast to discuss how global data standards can improve real estate investing in the future—and how doing the hard-but-necessary work of standardization can improve operations and strategy right now. https://www.afire.org/podcast/202217/ For several years, institutional real estate investors have worked together to create better standards for the industry. How we define things like NOI, ROI, and cap rates matter no matter where in the world an investment is made, and yet different companies and even different people within those companies can often define those terms differently. Getting an industry of entrepreneurs and institutions around the world to agree is not easy and progress can seem glacially slow. But there is value in the journey. Jamie Kingsley, Data Governance and Reporting Standards Director for NCREIF and PREA, and Constantin Sorlescu, Director of Professional Standards for INREV, sat down with AFIRE CEO and podcast host Gunnar Branson in September 2022 to discuss how global data standards could transform real estate for good, and for better.

AFIRE recently made our annual return to Munich, Germany, for EXPO REAL, the largest trade fair for real estate and investment in Europe since its formation in 1998. https://www.afire.org/podcast/exporeal2022/ As the world continues to recover from COVID and adjust for broad global uncertainty, we sat down with several members to get an outlook on global investment as it stands right now. FEATURING: Audrey Klein, Chair of the ESG Committee, Planet Smart City Audrey Klein has held Head of Fundraising roles at several firms but is best known for starting the European business out of London for the Park Hill Real Estate Group, a Division of Blackstone. Prior to joining Park Hill, she ran her own business marketing alternative asset funds across all asset classes to European investors comprised of pension funds, banks, family offices. She serves as the ESG Chair for SFO Capital and Planet Smart City. Will McIntosh, Global Head of Research, USAA Real Estate Will McIntosh serves as Global Head of Research for USAA Real Estate. Will is responsible for developing the commercial real estate investment strategy and manages the firm's global research platform that informs and enhances the real estate investment process. He is a member of the firm's Investment Committee. Joao Nuno Madeira de Andrade, Board Member, Fidelidade Property Joao Andrade serves as board member for Fidelidade Property, which is part of Fidelidade, a Portuguese insurance company that was established in the early nineteenth century, headquartered in Lisbon. Fidelidade is a subsidiary of Fosun International and is a leader in the domestic Portuguese market, providing life and non-life products for both individuals and companies. Tedd Willcocks, President and CEO, Triovest Ted Willcocks is the President and Chief Executive Officer of Triovest. Ted brings more than 25 years of diverse international experience in commercial real estate, having held a series of increasingly senior positions with CBRE, Brookfield Properties, and most recently, Manulife. For the last several years, he led the development and implementation of the real estate strategy for Manulife Investment Management, overseeing portfolio management, asset management and development in Canada, the United States, Australia and Asia, accelerating the growth of its Private Markets business.

(Featuring Robert Seldin of Madison Highland Live/Work Lofts) https://www.afire.org/podcast/202215seldin/ Mobile information technology has upended US land use regulation, and the ramifications of this technological upheaval are finally coming into view. Everyone in real estate complains about zoning laws. Depending on the municipality, it can determine the success or failure of any project, and quite often, the zoning seems to be completely opposed to the way people want to work, live, and play. How can real estate and zoning be flexible enough to meet the needs of a post-COVID population in cities that were changing long before the pandemic? Rob Seldin, Managing Principal at Madison Highland Live Work Lofts, sat down with AFIRE CEO and podcast host Gunnar Branson on September 7, 2022 to discuss how a flexible approach to office and residential may be a direction for adaptive re-use to solve for an uncertain and fast changing future. Based on the recent article Mr. Seldin wrote for AFIRE Summit Journal, he is unlocking new drivers for asset performance.

(Featuring Martha Peyton, PhD, CRE, Managing Director and Global Head, Real Assets Research, Aegon Asset Management) https://www.afire.org/podcast/202214peyton/ US garden apartment investments are offering outsized return potential—but access remains a challenge. The garden apartment subtype of the apartment sector is producing very encouraging total returns for property investors, beating all sector returns outside of industrial. The outperformance of garden apartments prevailed throughout 2021, but over the twenty-year average as well. However, such properties have also not traditionally been held by institutional investors, which have historically focused more of their apartment holdings on high-rise properties where new construction is more plentiful. On this episode of the AFIRE Podcast, recorded July 13, 2022, Martha Peyton, Managing Director of Real Assets Applied Research at Aegon Asset Management sat down with AFIRE CEO and podcast host Gunnar Branson to discuss her recent Summit Journal article to talk about the performance and the unique challenges of garden apartments.

(Episode 2022.13: Featuring Malcolm Johnson, CEO, Langdon Park Capital) https://www.afire.org/podcast/malcolmjohnson/ Malcolm Johnson, CEO of Langdon Park Capital, believes true affordability is possible (even with the considerable obstacles present in the current business environment)—and that affordable strategies may be investors' strongest emerging opportunity for core markets in the US. The demand for affordable housing is climbing every day while the supply is not keeping pace. Reasons for the dearth of affordable housing range from municipal zoning and regulatory policies to NIMBYism and fractured supply chains—but despite these factors, Johnson makes the case for how it is still possible to invest in and create solid affordable housing and deliver consistent returns. In this episode of the AFIRE Podcast, recorded on July 19, 2022, former professional football player-turned-real estate leader Malcolm Johnson sat down with AFIRE CEO and podcast host Gunnar Branson to talk about the new future of affordable housing and investment in the US.

(Featuring Charlotte Kang, National Hotels and Hospitality Valuation and Advisory Leader; and Emily Chadwick, Lead Risk Adviser and Head of ESG & Risk; JLL) https://www.afire.org/podcast/lodgingleads202212/ As a labor-intensive and service-oriented asset class, hospitality is uniquely positioned to be a leader in advancing sustainability goals for investors. Speaking for JLL, Charlotte Kang, National Hotels and Hospitality Valuation and Advisory Leader and Emily Chadwick, Lead Risk Adviser and Head of ESG & Risk, discuss how ESG practices in the hospitality sector can be instructive for all asset classes. The hospitality sector has faced an incredible set of challenges with global COVID shutdowns and a fast return to travel over the last two years. Despite the challenges, hospitality has also taken a lead in ESG best practices, operations, construction, and retrofits. Are there lessons here for multifamily and office investors to learn? As a follow-up to their Summit Journal article, “Lodging Takes the Lead,” Kang and Chadwick, sat down on July 1, 2022 with AFIRE CEO and podcast host Gunnar Branson to talk about the transformation of hospitality and the ESG challenges every commercial property faces today.

(Featuring Jeffrey Kanne, President & CEO, National Real Estate Advisors) https://www.afire.org/podcast/jeffreykanne/ Jeffrey Kanne, President and CEO of National Real Estate Advisors and Co-Author of the white paper, “Climate Change is Generating a Tech Revolution,” discusses how technology developed to combat climate change will transform the built environment as well. Climate change has become more immediate and dire than ever before, but as Albert Einstein once said, “in the middle of difficulty lies opportunity”. What if all the work to decrease carbon and adapt to a changing climate creates a better built environment as well? In this two-part podcast recorded 30 June 2022, Jeffrey Kanne, President and CEO of National Real Estate Advisors, sat down with AFIRE CEO and podcast host Gunnar Branson to talk about real estate's new opportunities to come out of new climate tech. As Kanne says, it may be time for us “…to imagine a world magnificently transformed by the technologies that are created to fight climate change.”

(Featuring Jeffrey Kanne, President & CEO, National Real Estate Advisors) https://www.afire.org/podcast/jeffreykanne/ Jeffrey Kanne, President and CEO of National Real Estate Advisors and Co-Author of the white paper, “Climate Change is Generating a Tech Revolution,” discusses how technology developed to combat climate change will transform the built environment as well. Climate change has become more immediate and dire than ever before, but as Albert Einstein once said, “in the middle of difficulty lies opportunity”. What if all the work to decrease carbon and adapt to a changing climate creates a better built environment as well? In this two-part podcast recorded 30 June 2022, Jeffrey Kanne, President and CEO of National Real Estate Advisors, sat down with AFIRE CEO and podcast host Gunnar Branson to talk about real estate's new opportunities to come out of new climate tech. As Kanne says, it may be time for us “…to imagine a world magnificently transformed by the technologies that are created to fight climate change.”

(Featuring Max LaVictoire, Principal, Hodes Weill & Associates.) https://www.afire.org/podcast/carryon202210/ While continuation vehicles were once viewed as a signal of delay or failure, market sentiment is rapidly changing. The rules are changing, faster and more frequently than before. Flexibility is more important than ever, as is the ability to adapt strategic plans. An investor's strategic plan from five years ago may not be optimized for today's reality Over the past few years and with increasing frequency, real estate investment managers and their investors have been exploring ways to recapitalize opportunistic or value-add investments with longer-term (and often lower cost) capital. While continuation vehicles were once viewed in a negative light, due to the potential conflicts between GP and LP interests, or to the tendency for such vehicles to be utilized only when there had been a failure or delay in accomplishing a fund's objectives, market sentiment is rapidly changing. Max LaVictoire, Principal at Hodes Weill & Associates responsible for capital raising and advisory practices, sat down with AFIRE CEO and podcast host Gunnar Branson to discuss his recent article in AFIRE's Summit Journal about how secondary offerings for existing funds have evolved from a defensive move to a more strategic option for managers and investors.