News from The Real Estate Center

In This Issue

8th Annual REIA/DePaul Economic Update

Annual Fall Reception

Faculty Activities

Antunovich Associates Renews Support as Sponsor

Eighth Annual REIA/DePaul Economic Update

The Perfect Storm was the theme for this year's joint program with the Real Estate Investment Association (REIA) and the Real Estate Center. The forecast, according to keynote speaker, Rebel Cole, Professor of Finance at DePaul, does not include clear skies. Cole addressed six key issues as he focused on the mortgage crisis:

HOUSING MARKET:

About 4 million families have lost their homes to foreclosure; another 4 million are currently in the foreclosure process or seriously delinquent on their mortgages and likely will lose their homes in the next few years; another 6 million are underwater, owing more on their mortgages than the current values of their homes. It will take several more years before the housing market stabilizes. This means that demand for rental properties will continue to rise.

JOBS MARKET:

If labor force participation had not dropped, the unemployment rate would have been 11% since late 2009. Also, the employment to population ratio has been stuck around 58.5% since early 2009.

BANKING INDUSTRY:

Almost 400 banks have failed and another 700 are in serious financial difficulty that could lead to failure. Only the largest and most creditworthy borrowers will be able to obtain bank loans during 2012 and 2013.

THE FISCAL CRISIS:

U.S. Federal debt has now exceeded $16 trillion. Annual deficits will likely exceed $1 trillion per year for the next four years, pushing Federal debt to $20 trillion by 2016. The so-called "fiscal cliff" may slow this rise in debt, but likely would push the economy back into recession in 2013 and lead to a significant rise in unemployment.

THE EURO CRISIS:

The Eurozone sovereign bailouts are going to continue. Following bailouts of Ireland, Portugal and Greece, Spain and Italy are likely to follow in coming months. In spite of these bailouts, sovereign defaults by Greece, Spain and Italy remain as significant risks.

THE FED:

In response to the miserable economic conditions, the Fed is expected to (and did) announce a third round of quantitative easing. It likely will announce (and did) an extension of its zero-interest-rate policy (ZIRP) through 2015.

A panel discussion following Cole's address explored topics such as how businesses will react to the issues of tax increases proposed for 2013, the impacts of the Affordable Health Care Act new taxes and real estate legislation in December 2012, and the impact of CMBS maturity in the coming years.

Susanne Cannon, Jim Keledjian, Charlie Wurtzebach, Rebel Cole, Neil Freeman, Gerry Nudo and Don Meyer

Susanne Cannon, Chairman, Department of Real Estate and Douglas & Cynthia Crocker Endowed Director, The Real Estate Center, moderated the panel.

Panelists:

E. James Keledjian, Chairman, REIA and Principal, Pathway Senior Living, LLC

Neil Freeman, Director, REIA and Chairman, Aries Capital, LLC

Gerald Nudo, Vice President, Marc Realty LLC

Don Meyer, Principal, Loan Management Solutions

Rebel Cole, Professor of Finance, DePaul University

Charles H. Wurtzebach, George L. Ruff Visiting Professor in Real Estate Studies, DePaul University

Annual Fall Reception

The Real Estate Center kicked off the new school year on September 4 at the Annual Fall Reception, the first in a series to celebrate the Center's ten year anniversary.

As part of the program, Susanne Cannon, the Douglas & Cynthia Crocker Endowed Director, recognized the original Founding Sponsors of the Center, many of whom were in attendance, as well as the many companies, organizations and individuals who have supported the Center these past ten years. In addition, Dean Ray Whittington welcomed the attendees to the newly renovated fifth floor of the Driehaus College of Business, and Charles Wurtzebach, the George L. Ruff visiting professor in real estate studies, shared his recent experience participating in the Asian Real Estate Society's International research conference in Macau, China where he presented a paper co-written with James Shilling called The Relative Performance of Private Equity Real Estate Joint Ventures.

Founding Sponsors: Jim Keledjian, Howard Weitzman, Terry Hendrickson, Ed Burton, George Ruff, Dean Ray Whittington, Noel Hastalis, Stella Pappas, Charlie Wurtzebach & Ed Hannon

The program concluded with the announcement of the 2012-2013 travel and academic scholarship awards totaling more than $60,000. This year's recipients were:

Michael J. Horne Scholarship	The Anthony J. and Jane E. Lydon Scholarship Fund
-Joseph Gatto	-Joseph Pitsor
-Mark Lester	-Collin Didier
-Scott Rosburg	-Derek Fohl
-Brian Doyle	-David Keane
-Ruben Vazquez

Founding Sponsor Scholarship	DREAA & REC Conference Scholarship
-Erin Curry	-Jon Boyajian
-Adam Devlin-Brown	-Field Stern
-Nicole Drewery	-John Westfall

Ken McHugh Scholarship	Robert and Howard Weitzman Endowed Scholarship
-Ryan Chase	-Christina Maksimovic

Nicole Drewery, Adam Devlin-Brown, Dean Ray Whittington, Erin Curry &
George Ruff

Charles H. Wurtzebach & Susan M. Marshall Endowed Travel Scholarship

-John Westfall	-Peter Kravaritis
-Mark Lester	-Jacob Schumer
-Ruben Vazquez	-Jeff Smith
-Derek Fohl	-Nicole Drewery
-David Keane	-Christina Maksimovic
-Amber Hendley

Travel Scholarship recipients with Dean Ray Whittington (back center) and donors Charlie Wurtzebach and Sue Marshall (far right)

Faculty Activities

In July, Jim Shilling, the Michael J. Horne Chair in Real Estate Studies, hosted an international real estate symposium in Macau, China where leading academic real estate researchers presented papers for discussion with the option of publication in a special issue of the International Real Estate Review. DePaul faculty members, Susanne Cannon and Charles Wurtzebach also participated in the conference, and Shilling and Wurtzebach presented their co-authored paper, "The Relative Performance of Private Equity Real Estate Joint Ventures."

Macau

Following the symposium, Shilling and Wurtzebach traveled to Singapore to present papers at the AsRES & AREUEA Joint International Conference. Wurtzebach presented two papers: "Who's Flipping, Who's Holding and for How Long?" and "An Analysis of Dependence Structure between the Real Estate Markets and Financial Markets in the U.S." Shilling and Wurtzebach also presented the paper that they co-authored and shared at the symposium in Macau.

Antunovich Associates Renews Support as Sponsor

Antunovich Associates was an early supporter of the Center as one of the Founding Sponsors. This past June, the firm renewed its sponsorship and joined the Center as a Sustaining Sponsor. We are grateful for their continued support.

Joe Antunovich

"I enthusiastically support and endorse the marvelous, hands on instruction that is the cornerstone of the DePaul University Department of Real Estate." - Joe Antunovich, President, Antunovich Associates

Antunovich Associates is an Architectural, Planning and Interior design firm with a broad range of professional expertise that includes master planning, programming and design of large mixed-use commercial developments, corporate campuses, historic preservation and adaptive re-use, museums, office buildings, higher education facilities, multi-family residential and retail/commercial.

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