Presented by Lennar Investor Marketplace
Shoutout to our sponsor, Lennar Investor Marketplace — new construction rental investments with comps, returns, and underwriting built in.
Guest: Jim Corl, Executive Vice President and Head of Private Real Estate, Cohen & Steers
Jim Corl is Executive Vice President and Head of Private Real Estate at Cohen & Steers, where he applies the firm’s listed-market research to private real estate investing. He has spent his career studying the relationship between public REIT pricing and private property valuations across market cycles.
Jim Corl, EVP and Head of Private Real Estate at Cohen & Steers, breaks down the structural lag between public and private real estate valuations, explains why apartments and industrial remain overvalued relative to their fundamentals, and makes the case for shopping centers as the most contrarian and compelling opportunity in the current cycle. He also covers how Cohen & Steers is applying its listed-market IP to generate alpha in private real estate.
Key Takeaways
Public REIT pricing tends to lead private real estate valuations, not the other way around.
“The real estate doesn’t tell you what the stocks are going to do. The stocks actually tell you what the real estate’s going to do.”
Jim Corl, [[6:28]]
Corl argues the non-traded fund universe’s heavy apartment concentration is itself a warning sign.
“The non-traded universe is, you know, every single one of them is between 65 and 85%, if not 100%, apartments or some form of rental housing, which they call different names now so it doesn’t sound like apartments. That’s how you know that apartments have become a bad word.”
Jim Corl, [[26:07]]
He reframes cap rates as earnings multiples to show how expensive apartments have become.
“Paying a four cap for an apartment, that’s paying 25 times multiple, right? I always tell my guys, flip it on its head. Don’t think of a cap rate, think of it as an EBITDA multiple. I don’t know too many people that have made money buying a business at 25 times a relatively stabilized EBITDA in a mature industry.”
Jim Corl, [[31:15]]
Walmart’s own store productivity and thin development pipeline underpin Corl’s bull case for retail.
“Last quarter, Walmart did comp store sales of 4.6%. So that would tell you, wow, these stores are really productive — maybe we should build more of them. But if you look at their pipeline across the whole US, they’re delivering additional square footage at a rate of about 20 or 30 basis points a year.”
Jim Corl, [[37:36]]
Corl sees the industrial sector’s e-commerce growth story starting to erode, undercutting a popular bull case.
“The warehouse market share of e-commerce is actually eroding. That’s that omni-channel discussion that we had.”
Jim Corl, [[50:44]]
