Hospitality Insight

Participants in last month's Cornell Real Estate and Finance Roundtable.

Amid the current economic recession are opportunities for astute investors, according to participants in the second annual Cornell Real Estate and Finance Roundtable, held last month in New York City. The roundtable was conducted under the aegis of the Cornell Center for Hospitality Research and drew more than two dozen participants.

Several industry experts shared their view of the current conditions and the prospects for recovery. For some, the current downturn adds a dose of reality to capital markets. Michael Medzigian, Chairman and Managing Partner of Watermark Capital Partners, pointed to the “irrational” capital markets of 2006-2007. “Something was wrong when owners were borrowing 80 percent loan to value at just 110 basis points over Treasury rates,” he said.

A full report can be found on the Cornell Center for Hospitality Research web site.

For years, financial firms have been willing to loan large sums of money to people with insufficient assets or income to pay back the loans. It’s called subprime lending and it has had a significant effect on the mortgage industry. About 21 percent of all mort­gage originations from 2004 through 2006 were subprime. And now – surprise! – many of those borrowers are unable to make payments on the loans, resulting in real problems for many financial services companies. It’s not a coincidence that the current financial meltdown is centered in the U.S. housing market.

Need a simple but thorough explanation of the whole mess? National Public Radio (NPR) recently produced a show called The Giant Pool of Money that tells the story of how the U.S. got into the housing crisis and how it effects the current turmoil on Wall Street.

Cornell students have access to the real estate segment of SNL Interactive, a financial database that provides data, news, and analytics for the real estate industry. Specializing in the Real Estate Investment Trust (REIT) market, SNL Real Estate offers access to the industry’s two leading newsletters – SNL Real Estate Securities Daily and SNL Real Estate Securities Weekly. For more information about SNL real estate data, visit the SNL brochure (PDF). To sign up for SNL Interactive, use the registration form.