Weekend Interview: Oxford Properties Executive Vice President For Europe And Asia-Pacific Joanne McNamara
This series gets into the heads of the decision-makers of CRE, the people shaping the industry by setting investment strategy, workplace design, diversity initiatives and more.
The fall in the value of the pound, precipitated by policymakers she compares to Captain Nemo, might attract foreign investors to UK real estate. But, she says, no sector can escape the current market sentiment.
McNamara is executive vice president, Europe and Asia-Pacific at Oxford, which has global real estate assets under management of C$80B (US$58B, £54B). In that role she oversees the firm’s entire European business, which makes up 20% of the firm’s assets.
The following has been lightly edited for clarity and style.
Bisnow: Baron Rothschild once said the “time to buy is when there’s blood in the streets.” Where is the blood today?
McNamara: Everywhere — there is no sector that can escape current market sentiment, albeit the blood is more splashes than rivers currently. Unlike the [Global Financial Crisis] — when you had a collapse of values augmented by horrific swap break liabilities — this time, in a lot of cases, the fall in value is being offset by the hedging positions some, if not most, investors have being in the money.
Having said that, yields got chased very low, so even with interest rate caps, there is the potential for inverted yield gaps, which will lead to some "vein opening". The fact that the pound appears to have been commandeered by Captain Nemo, who is taking it on a voyage to 20,000 leagues under the sea, will likely have a positive impact on foreign capital inflows. It is possible, even likely, that this might protect absolute sterling values even if investors have had a fairly rough time in U.S. dollar terms.
If I had to pick an area where there is likely to be immediate pain, I think it is in development, in almost any sector, where we will no doubt see land value falling. In addition, anywhere with discretionary spend is likely to suffer, so I would probably say leisure as well.
Bisnow: What is your most controversial CRE opinion and why are you right about it?
McNamara: Offices in established regional cities will outperform CBD London in absolute terms, as we have seen in the U.S. This will be driven by a combination of a lack of appetite for the long-distance mass transit commute, affordability and restrained supply in the regions. I think that regional outperformance is logical and it will be led by the occupier market. It will take some further time for investors to catch up, I think, as there remains a certain cachet to gateway cities which is not going to dim in a great hurry, albeit government agenda and infrastructure is key.
Bisnow: If you weren’t in real estate, what path would your career have taken?
McNamara: I think I would have probably been a teacher, despite not being that academic at school. I have always enjoyed watching people grow and learn and have a great passion for education. I would, however, focus more on practical education and life skills than a more traditional teacher role.
Bisnow: If you could make one change to the industry, what would it be?
McNamara: The obvious answer is to increase the diversity in the industry. I don’t mean just women, I mean more diverse backgrounds, disciplines and styles. I would love to see the industry continue to be disrupted by as many diverse groups as possible. This is happening, but more people need to drive this change.
Bisnow: What is one thing you would do differently from early in your career?
McNamara: I often felt like I didn’t know enough (and sometimes still do), so I would shy away from public speaking or voicing my opinion. If I could tell my younger self to be less worried about not knowing everything and having the confidence to stand up in front of people more and share my view, I would do that.
I used to hate speaking publicly but have realised how much of an impact you can have by putting yourself out there and having a view, even if you are wrong. It is OK to be wrong and you can learn more from the things you get wrong than right most of the time, but if you don’t have a view, then you have nothing to learn from.
Bisnow: As a leader, how do you decide who is worth mentoring and who is simply not a good fit?
McNamara: Everybody is worth mentoring at the start. A problem with society and our industry in general is we move at great speed sometimes and leave some people behind. Not everybody wants to be taught or mentored, obviously, and not everybody will make it. I would like to think that both I and Oxford have a philosophy in investing as much is possible in people and their development. If there is one thing personally that I like to see when figuring out if someone is a fit for me to mentor, it is passion. If someone is passionate about the subject, I believe the mentoring is easy.
Bisnow: What are your thoughts on the metaverse? Does it have any relevance for CRE?
McNamara: Our children often live in the metaverse, for better or worse. They play in it, they socialise in it, so by definition it has a role to play in all our lives moving forward. Whether that is entirely helpful is totally up for debate, but we cannot ignore it. As for real estate in the metaverse, there are a number of companies that are buying and selling virtual land and, as an asset class, it has a following. Is it sustainable or a bubble? I honestly do not know, but I am intrigued by the possibilities and currently my view is to watch and see what plays out.
Bisnow: What do you see as the lasting impacts of the pandemic on CRE?
McNamara: The biggest will be a total re-evaluation of the long-distance mass transit commute. This will result a re-rating of the real estate relationship between CBDs and dormitory/regional locations. That impact feeds directly into how we (not just the real estate industry but society generally) are going to utilise our office space in the future. There is a mass evolution event taking place and the investors that understand the trends first will have a fruitful few years.
Bisnow: As you know, there is a massive conversation underway regarding advancing more people of colour and women into the C-suite. What are you doing to address those voices and that movement within your own organization?
McNamara: There are many things that can be done to address this, but we are focused on embedding this focus in our culture so that it is part of everyday decision-making throughout the business, from grassroots through to the C-suite. We have a number of specific areas of focus that we look to address, with feedback from the business and utilising our data to track progress.
Bisnow: So, this is the weekend interview. What’s your typical weekend routine?
McNamara: It is all about family at the weekend for me — I am very lucky to live in Wales near the sea, so I try to head to the beach most weekends, no matter what the weather. Saturday and Sunday mornings mostly mean me and my husband juggling who is taking our son and daughter to their various sports lessons or school parties — I typically go in my gym kit with the intention of doing a run while the kids play, albeit often end up drinking coffee and chatting to other parents instead. Then we head to the beach for a walk/play and often have friends and family over for dinner and drinks (mostly take-aways as I am a terrible cook). Every now and then, I still get a chance to play netball with my old club in London, which I love, too.