Week 3

Being in Rio de Janeiro has been a great experience. This week I visited 5 different malls to get a feel for the industry. Every mall I visited is looking for ways to improve the experience it provides for its customers. It was very interesting to see how each mall catered to the different classes of people in the region. Plaza Niteroi was, for me, the most interesting experience. Each floor of the mall was strategically created for a specific class of people. On the first floor, local tenants that provided inexpensive goods and services were tightly packed together. The second floor was spread out and focused on the B class of customers. The most premier and expensive stores and restaurants were on the top floor. It was very interesting to move from floor to floor and see how different the shopping experiences could be depending on your shopping preferences.

Aside from work, I was able to go to a soccer match where two big rival teams played in the most famous Brazilian stadium, Maracana. This stadium holds the record for the greatest attendance for a sporting event at 200,000 people. The rivalry is so intense that I had to take off my jersey while walking down the street due to the fact that it could cause a confrontation with fans from the other team. The fans here are very passionate about soccer and their teams.

I was able to eat at a Brazilian Barbeque where I tried some exotic foods. I told everyone in the office that I was willing to try anything once, so they made sure I ate a variety of food. I tried Caviar, raw beef, and chicken heart. I also tried local drinks such as Guarana, which is made from the Guarana fruit found in Brazil.

Today, I am in Sao Paulo getting ready for a meeting with Gafisa, Brazil’s leading home builder. I hope to get insight relating to emerging middle class and its relationship to homebuilding. My main goal is to find out how Gafisa is positioning itself for a rising middle class by getting information as to its strategies and projections for future homeowners. Throughout this week I will be visiting more properties from BR Malls and visiting with Itau, a large private bank in Brazil. My goal is to get some depth on the financial status of the Brazilian consumer and relate that to different aspects of the real estate market. This week is critical for the project and should be a great learning experience.

Week 2

This was a very exciting week for me. I met the staff at EGI in Chicago and worked on researching and developing an outline for my project. My main goal is to confirm the company’s thesis—the emerging middle class in Brazil is growing and will increase the demand of the real estate opportunities. I plan on examining how the different portfolio companies are positioning themselves for this growth. Also, analysis pertaining to the risks involved is a concern. If the Brazilian markets are overheated these companies need to have an exit strategy that will allow them to adjust to these risks. My preliminary research has been highly informative; however, further research into the possibility of increasing interest rates needs to be explored.

I had the opportunity to describe my project to Sam Zell, the Founder of Equity Group Investments. He expressed interest in the project and the stipend. On Wednesday, I watched Mr. Zell give a speech regarding multitenant housing. He discussed the economy and provided his take on its relationship to the real estate market. It was interesting to hear his perspective on where the real estate market stands and its future. One question was asked regarding his investment in Brazil. He responded with the fact that the emerging middle class is growing causing sustainable development that creates a need for retail space and homes. Listening to Mr. Zell speak was a very interesting experience and I learned a lot about his thoughts on investing in real estate.

I also worked with the Ira Chaplik the COO of Equity International on the logistics of my trip and discussed some of the most important aspects of why Brazil was a good investment. He also gave me insight toward some of the concerns I had regarding increases in the interest rate. Mr. Chaplik does not see small interest rate increases as a long term negative factor on the economy. He explained that compared to the United States, Brazilians take on very little debt and small increases in the interest rate are not of a major concern considering that interest rates are at an all time low. He also gave me tips and informed me how to conduct myself while in Brazil. Everyone in the office has been very informative and helpful. With their guidance, I hope to produce a very informative and insightful report.

Although I have interned with a real estate firm for the past two years, it is humbling to work with EGI. I had the opportunity to sit in on conference calls and meetings regarding new developments and investments and soon realized how much I need to learn. The high caliber of these workers and their understanding of the real estate market is incredible. It was difficult for me to follow the technical analysis of how they were financing projects; however, this week was one of the best learning experiences I have had. I took notes and researched terms and concepts that I was unclear on for further research

I arrived in Rio De Janeiro, Brazil Yesterday. I spent the day settling into and getting ready for my first day at BR Malls. Rio is truly a beautiful place and my view of the beach from my room is spectacular. I spent most of my time taking pictures and trying to experience the great weather and views.

Today was my first day in the BR Mall office. BR Malls has been a great source for my project. I was introduced to people in all different branches of the office. I had a chance to interview and discuss topics relevant to my project with the IR and leasing departments. We discussed my project along with some basic background information of the company. I got a feel for the BR Mall Business model and how they position themselves for the emerging middle class.

I also worked with members of the staff to develop my itinerary for the remainder of the trip. In order to get a stronger idea of the different social classes in Brazil, I am working with management to get an analysis of about 10 malls throughout Brazil. By doing so, I hope to get a strong understanding and comparison of the different types of malls and how they cater to the surrounding demographics.

The culture of BR Malls could not be better for this type of project. Everyone has been extremely helpful and inviting, creating a very comfortable atmosphere that has allowed me to work efficiently. It is very interesting to see how hard everyone in the office works, while still taking time to step aside and talk with me about the company. I got to the office at around 9 am and when I arrived everyone was diligently working. I am now in the office at 9 pm typing this blog and everyone is still working. I am not sure if BR Malls is an anomaly, but this office does not believe in the “9 to 5” work day.

First Day

5/15/10

I am beginning my travels today to Chicago for research and training for my internship in Brazil. I am meeting with the president of real estate for Equity Group Investments, David Contis, to get settled in for the week. I hope to work with the company to learn as much about the Brazilian real estate market and its components in order to compile a very informative presentation on the emerging middle class in Brazil. I am very excited for this experience and I look forward to working with EGI to further my knowledge and experience in real estate.