Commercial real estate is a delayed mirror of the economy, and there is nobody better equipped to show exactly how than today’s guest, Glenn Mueller. Glenn is a professor at the University of Denver’s F.L. Burns School of Real Estate, and an investment strategist at Black Creek, who has been researching real estate cycles for over 36 years. Glenn’s experience comes from his background as a bank loan analyst, and he is also a developer himself who is currently involved in his 58th construction.
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Glenn joins us on the show to share a wealth of knowledge about the connection between GDP growth, employment growth, and construction trajectories over the past 30 years as they relate to the five major areas of commercial real estate. He gets into the specifics of how the five property types have performed and are performing in different areas of the country and how this fits into Black Creek’s investment methodology. Glenn shares a whole lot more today, covering things like the four parts of the occupancy cycle, why retail is not as bad as you might think, and new ways of thinking about declining inflation rates. If you can watch the video version of this interview, go ahead and do that too because Glenn came equipped with a host of graphs and other visuals to make his presentation that much more informative. One of Glenn’s talents is taking complex systems and simplifying them so that they are easy to understand, so don’t miss this one if you are looking for some pro tips about where to put your money next.
Key Points From This Episode:
- What Glenn has been involved in; research, analysis, and development in real estate.
- Growth statistics and the main driver for commercial real estate demand: employment growth.
- Cycles of the balance between supply and demand in commercial real estate.
- Long term trajectories correlating rent growth, occupancy levels, and market cycles.
- Parts of the US which are in the expansionary phase such as Austin and Texas.
- The best performing property type in the past few years: industrial.
- Why a steady 2% growth is sustainable and better than rapid peaks and troughs.
- Specific trajectories of the five commercial real estate types.
- Repurposing old retail space and other reasons for why retail is still positive.
- The idea that as long as rents and occupancies go up investors will make money.
- Why demand for apartments is so huge: post-high schoolers all need them.
- Resources for accurate trend data on real estate such as CoStar.
- How Glenn is preparing for the downturn: high-quality assets in great locations.
- More tips for weathering a downturn; high-quality tenants that you also take care of.
- Glenn’s use of debts and mortgages at his multibillion-dollar firm.
- The value of finding and retaining talent as a means of improving your business.
- Glenn’s passion for directing his students to careers they will love.
- How aspiring people in the real estate industry can stay informed and connected.
[bctt tweet=”Taking care of your tenants, and gaining the highest quality tenants you can get, I think are the two keys to weathering a downturn. — Glenn Mueller” username=”whitney_sewell”]
Links Mentioned in Today’s Episode:
About Glenn Mueller
Dr. Glenn Mueller has 43 years of real estate industry experience, including 36 years of research. He is internationally known for his market cycle research on income-producing real estate, real estate securities analysis, public and private market investment strategies, and capital markets analysis. He is a Professor at the University of Denver’s F.L. Burns School of Real Estate, where he teaches his research in real estate market cycles. He has published over 100 research articles and a similar amount of quarterly issues of his Real Estate Market Cycle Report. He is also the real estate investment strategist at Black Creek Group, where he provides real estate market cycle research for their institutional real estate investment groups. He holds a B.S.B.A. Finance major from the University of Denver, an MBA from Babson College, and a Ph.D. in real estate from Georgia State University. His former research positions include Legg Mason Inc., PriceWaterhouseCoopers, ABKB/ LaSalle Real Estate Investors, and Prudential Real Estate Investors. He has also been a visiting professor at Harvard University’s summer executive education semesters since 2002.
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