Throngs of Baruch College students recently headed out of Baruch’s main building to attend the college’s annual Spring Fling. A different group of students headed in the other direction to a conference room at the top of Baruch’s Vertical Campus Building, to meet a panel of prominent Sephardic real estate executives gathered to share their personal experiences and insight into their industry.
The event was organized as part of an independent study project by Isaac Mograby, a graduating senior in the Baruch Honors Program and President of the Sephardic Students Club (SSC). It was cosponsored by the SCC and Hillel at Baruch. On the panel were Jack Cayre, Joe Jerome, Isaac Chera, and Albert Laboz. The event was attended by over 100 students.
Matthew Vogel, Executive Director of Hillel, opened the event with a few words, followed by a short introduction by Dr. Abe D. Tawil, Professor in Baruch College’s Management and Law Department and faculty advisor to Baruch’s Sephardic Students Club. Attendees then had the honor to hear from President of Baruch College Stan Altman who warmly welcomed the speakers.
After outlining Baruch’s extensive academic programs in real estate, Professor John Goering, head of the Baruch College’s Real Estate Department, moderated the panel, and students were invited to ask questions. Of the many questions on the audience’s mind, a few stood out.
Here are the most memorable questions and a summary of the panelists’ responses:
Was there an upside (in real estate) to the recession? Is the market coming back?
There have been billions of dollars invested in the buildings of NYC through residential sales and retail rents, so we are coming out of the recession pretty well. Because the fundamentals are still questionable, there are some who are unsure as to why the market is getting stronger.
There is no question, though, that the market is coming back strong, but polarized. There are a lot of properties available, but the competition level is much greater due to the fact that many are jumping back into the real-estate business. People are very cautious, however, on how to enter the market because there is a lot of money and risk involved.
For many, the most recent financial meltdown is the second that they have experienced. After seeing the late 80s crash, many were able to gauge the trajectory of the aftereffects of the last economic crisis.
The real estate business is very much involved in credit and lending because of the importance of mortgages and long-term leases. Though banks have seen an upturn in real estate prices and rents, there’s still an apparent lag in the lending market. Banks are still being burdened by all the bad loans on their books.
The economy will be only be deemed cured once lending and employment, two economic indicators that are often slow reactors, return to normal rates.
Despite the adverse effects the real estate crash had on many, some of the speakers viewed the crash as an opportunity to give the industry a makeover. Many, they argued, did not belong in the real estate business and the crisis was a way to filter out those people. Additionally, the crash served as a wake-up call to investors and brokers on how to approach their assets, financing, rents, and tenants. Thorough research and experience, not to mention luck, is the only way to succeed.
What advice can you offer students who aspire to succeed in the real estate industry?
All panelists agreed on the importance of education and experience. Jack Cayre said, “You have to make sure you know what you know and you know what you don’t know! In the business world, learn and intern and you’ll succeed.”
There are many fields within real estate and one should think beforehand which one they’d like to focus on. Joe Jerome suggested to the students to find their area of interest through experience and then study it a little bit more in depth.
On the business end, the panelists gave the students a couple of warnings when entering the field. Jack Cayre stressed the importance of avoiding ever giving a personal guarantee. In the real estate business, nothing is definite. Offering a personal guarantee runs the risk of tarnishing the credibility of your name.
Isaac Chera spoke of the importance of properly financing and marketing all real estate activities. Thinking long-term and doing thorough research are both important aspects of the business because the amount of capital involved is generally large. He added that two fatal mistakes in real estate are having too much debt and not enough diversification—a common term used for owning properties in different areas in order to minimize downside risk.
Albert Laboz focused on the value of creating friends, and not enemies, in the field. It’s all about having allies and making connections, he said. He also attributes his successful career to his law degree, which helps him negotiate contracts and interpret zoning laws.
All the panelists agreed that the most important prerequisite to succeed in the real estate business is patience.
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Lisa Arking is a recent graduate of Baruch College. She currently works in finance.
