3 Women at the Top of the Capital Stack
Women in the C-suite of commercial real estate are a rare breed indeed, but to rise to the top of commercial real estate finance may be a little like finding identical snowflakes. Today we tell the stories of three top execs who are featured panelists at Bisnow’s The Capital Stack & The Women Who Rule Real Estate Investment event, on Aug. 6, at the Trump International Hotel & Tower Chicago, starting 7am.
One of our panelists, KIG principal and managing broker Susan Tjarksen (pictured, with partner Todd Stofflet) holds bachelor's and master's degrees in finance and started her real estate career in the hotel business. She transitioned into hotel development, then multifamily development before switching to brokerage, and starting three successful companies, all real estate focused. Susan says the most rewarding company has been KIG—in six months it's grown from a startup to a full-blown institutional multifamily brokerage licensed in seven states, employing 11 people with 1,700 units listed or under contract. Her advice to young women starting in the industry is to be the best one in the room with math. "Know your underwriting and financial statements inside and out," Susan says. "The more you know, the more people will trust you."
Susan says 2015 is the year of the portfolio sale. KIG has sold three multifamily portfolios so far and has another two up for sale, including 516 units in two properties in Waukegan. Another trend Susan identifies is buyers showing an appetite for multiple risk types and diversifying their institutional space investments. Susan says The Carlyle Group, JP Morgan, TGM and AEW are KIG clients with multiple funds for varying types of assets. Susan believes there will be an interest rate increase this year, the first time that's happened in a decade, and the pressure to invest the enormous amount of capital raised specifically for commercial multifamily development will result in a change in return parameters.
Another panelist, Citrine Investment Group president and partner Lynn Jerath (shown), says her passion for real estate investment began as an undergraduate at the University of Pennsylvania's Wharton School of Business. The classes she took at what is now the Zell-Lurie Real Estate Center gave her a competitive edge in understanding the commercial real estate sector and getting the best jobs available at the time and helped build her confidence. Her advice for young women interested in real estate is to learn as much as you possibly can from the ground up to the highest levels of the industry. "The confidence you gain from being an expert is immeasurable," she tells us. Her greatest professional achievement thus far is founding Citrine Investment Group last May and using her 20-plus years of experience in real estate to create attractive risk-adjusted returns for her investors.
Lynn says yields on private market real estate and REIT dividends are attractive, compared to corporate bonds and other yield alternatives. This is a big driver in both the debt and equity markets as demand for real estate remains very high. Additionally, operating fundamentals have improved significantly over the past seven years, and are continuing to improve. Construction activity, which would increase supply and mute rental growth, is still below peak levels, which provides an attractive backdrop for landlords. For Lynn, the current state of the real estate markets leads Citrine to focus on stock picking—investing long in those companies it feels have the best business plans to create value for shareholders, and shorting those that have overextended valuations or that operate in sub-sectors with growth prospects that fall short of the broader markets.
ARA Newmark vice chairman Debbie Corson (shown) started her real estate career in college doing leasing for an apartment property, which led to a job running a management company with 9,000 units and over 2M SF in retail. She struck out on her own in 1990 and was one of ARA's founding partners in 2001. Newmark bought ARA last December for $110M. Debbie says this is her biggest professional achievement. Her advice for young women breaking into the industry is to not be intimidated in a man's world and be yourself. "You don't have to act like a man to be successful in this business," she says.
Debbie (shown, right, with ARA Newmark managing director Susan Lawson) says the sheer amount of capital chasing real estate is shocking; the multifamily market, especially, is as hot as she's seen in 30 years in the business. She doesn't see the market slowing even if interest rates increase because it will have little effect on cap rates at this point. A big factor in this trend is the shift from homeownership to rentals. Debbie says even suburban Baby Boomers are trending into the rental market. As a result, some CMBS lenders who went away after the 2008 crash are returning strong in other areas. To learn more, please join us for Bisnow’s The Capital Stack & The Women Who Rule Real Estate Investment event, Aug. 6, at the Trump International Hotel & Tower, starting at 7am. Register here!