INDUSTRY SPOTLIGHT: BARRY HOWARD, EVP & CHIEF COMPLIANCE OFFICER, EQUUS CAPITAL PARTNERS
As executive vice president and chief compliance officer, Mr. Howard is responsible for ensuring that Equus’s funds comply with all applicable laws and regulations. Prior to joining Equus, Mr. Howard was a partner in the real estate group of Dechert, LLP, a Philadelphia law firm.
Mr. Howard is a graduate of the University of Chicago Law School and holds a B.S. from the Wharton School, University of Pennsylvania. Mr. Howard was a real estate advisor to the Executive Committee, Investment Board of the University of Pennsylvania Endowment. Currently, he is a member of the Standing Committee on Conflicts of Interest and Commitment of Thomas Jefferson University.
Philadelphia Real Estate Council: In 2015, what do you feel is the most attractive asset type?
Barry Howard: From a risk/reward prospective multifamily is hard to beat. The macro trend is still extremely positive, and there is not the risk of large tenant loss either from relocation or failure. It is still important to avoid markets that are too dependent on a particular employer or industry, and there is the risk of overbuilding in certain CBD markets. Most multifamily markets are healthy, and the trend is positive.
Even with the high prices, it is possible to lock in an attractive leveraged return because of the very low interest rates.
PREC: How have legislation and other regulatory changes affected real estate investment in the last few years?
BH: Regulation has added significant costs and bureaucracy, but there has been little change in the fundamentals. Other than for REITS and public companies, real estate investment for institutions and high net worth individuals continues to be a largely unregulated business.
PREC: From a value-add standpoint, which U.S. regions or markets offer the most opportunity for growth?
BH: There are good opportunities in Austin, TX, certain Florida markets including Tampa, Raleigh, NC and within the Boston, MA SMSA, but there are opportunities within submarkets in many areas. The key is to find the overlooked opportunities in submarkets.
PREC: What is the biggest challenge the Philadelphia market confronts in 2015?
BH: The biggest challenge is the tax and governmental orientation. The two largest voting groups in Philadelphia are neighborhood residents who are not aligned with the business community and unions. The migration into Center City Philadelphia has not had a significant impact on the balance of power. The large bulk of office development (with the exception of Comcast) has been in KOEZ Zones because of the huge tax disincentive to locating in Philadelphia. Even residential development has been incentivized by 10 year tax abatements. This is unsustainable.
PREC: If you didn’t work in real estate, what industry or field would you pursue? Why?
BH: I would pursue the private equity business.
It is interesting how similar real estate investment has become to private equity investment dealing with corporate investments.
Special Thanks To Equus Capital Partners