Tel Aviv University
Professor David Geltner discusses real estate derivatives 
Private equity real estate -- a panel discussionFIRE Takes Derivatives to Tel Aviv
January 29, 2008
As a part of the MIT Center for Real Estate's ongoing FIRE (Forum on Issues and Innovations in Real Estate), Center Director David Geltner presented a talk at Tel Aviv University explaining the creation, use, and value of real estate derivatives in today's uncertain markets.
Entitled "Risk & Return in Real Estate, and What to Do About It," the talk offered an overview of derivative construction and use, emphasizing how derivatives might address the major concerns of institutional investors. Derivatives can provide a valuable risk management tool, hedging real estate uncertainty and allowing for profit even in today's uncertain markets.
"The talk considered what we've learned over the past two decades about the nature of investment risk and return in the real estate asset class," Professor Geltner said. "We looked at how the advent of the new real estate price index based derivatives can allow investors to profit from the opportunities provided by real estates risk and return characteristics."
Professor Geltner's talk was part of a larger "Private Equity Real Estate Conference" hosted by the University. It was aimed at Israeli investors who currently have -- or are contemplating making -- international real estate investments outside of Israel. "I think there is considerable Israeli real estate investment in Eastern Europe and North America," Professor Geltner said, "with potential for more."
The conference also served as a platform to introduce MIT/CRE and its flagship MSRED program. " I'm hopeful that we may get some applicants to the program from Israel," Professor Geltner said.
Professor Geltner was joined by top real estate executives who looked further at issues in private equity real estate. Lorenz Reibling, Chairman and Senior Partner of Taurus Investment Holdings, discussed investment in emerging markets. Bill Benjamin, Managing Director of Apollo Real Estate Advisors, examined the current level of risk level ("crisis or no crisis?") of real estate investing in 2008. Kevin Lynch, President and Co-Founder of The Townsend Group, looked at real estate portfolio modeling and manager selection.
MIT/CRE's Forums on Issues & Innovations in Real Estate series engages real estate professionals worldwide on issues of pressing interest. Recent topics have included capital markets, investment vehicles, and trends in global development.
