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.