Meet your host, Matt Slepin
Matt Slepin is the Founder and Managing Partner of Terra Search Partners, a national executive search firm dedicated to the real estate industry.
About Terra Search Partners
Matt founded Terra Search Partners in 2006 to provide a highly consultative and both a client and candidate centric approach to real estate search. Prior to forming Terra Search, Matt was a Partner with several executive search firms, including Heidrick & Struggles and Ferguson Partners.
Today's Guest Spencer Levy
Today, I am going back to our regular programming with a conversation recorded right at the very beginning of the coronavirus crisis.
Different Methods of Calculating a Cap Rate
ADAM GOWER: So, how do you calculate the cap rate? What is the calculation?
How Cap Rates Are Used in Real Estate
ADAM GOWER: So now you've described a couple of characteristics of the cap rate. How is it used, before we got into your research? And how is it used in the commercial real estate industry?
Variables for Cap Rates in Different Markets
ADAM GOWER: How do cap rates vary: office, class-A, and multifamily class-A. If those are the same, doesn't that disprove your theory? And if they are different, in what way are they different?
Cap Rate Expectations in Large Markets Vs. Small Markets
SPENCER LEVY: as I mentioned before, the reason why multi-family has such low cap rates is largely due to its liquidity. It has tremendous liquidity due to the debt capital markets.
How Will Cap Rates Vary Through the Life of a Real Estate Cycle
ADAM GOWER: this latest report goes all the way back. He said tongue in cheek to 2013. But we all know that the world didn't start in 2013. It actually restarted at around, what, actually it was probably around then. But the last downturn was 2007.
The Correlation Between Cap Rate and IRR
ADAM GOWER: And how does cap rate, again, during a cycle, how does it correlate to IRR, to the Internal Rate of Return?
Part 1 of 3 Mini-Episodes
Since this episode and the subsequent two episodes (Episodes #12, #13, #14) were recorded in March 2nd, 2020, the COVID 19 crisis has accelerated dramatically internationally and especially in the United States.
Show Notes
This is the first of three “mini-episodes” with Spencer Levy, whom I met in 2002 when we worked together at Legg Mason and stayed in touch through his transition to Stifel Nicholas and subsequently to CBRE. Spencer has built up quite a following online with his highly visible job as Head of Research for CBRE.
