Pensions & Investments – Jul 2016

Real estate portfolios won’t get boost from Olympics


Investors shouldn’t expect the drama of the Olympic Games that run Aug. 5-21 in Rio de Janeiro to boost their global real estate portfolios, industry insiders say.

Tom Shapiro, founder, president and chief investment officer of New York real estate money management firm GTIS Partners, said his firm was “not a big Olympics investor.”

Rio de Janeiro got a boost with a new subway, new highways and other infrastructure improvements downtown, he said.

“Our hotels are leased for two weeks; but as for the long-term effect, it helped brush up a few things,” Mr. Shapiro said.

Real estate investors could reap a benefit from the 2016 Games in the future, said Josh Pristaw, senior managing director and co-head of Brazil and head of capital markets at GTIS.

“The Olympics is transformative for the city of Rio,” Mr. Pristaw said. “Once people have benefited from the new light rail, bus rapid transit — which was disruptive for people living and doing business in Rio … long-term it is positive.”

Maximo Lima, a founding partner of Sao Paulo-based real estate investment firm Hemisferio Sul Investimentos sees it differently.

He told members of the $2 billion Phoenix City Retirement System board that the games’ impact on real estate investment is zero, according to minutes of the Oct. 15 meeting. HSI did not make any investments related to the Olympics.

“As with the 2014 World Cup, the Olympics will provide a very temporary boost to the local economy,” Mr. Lima told the board, according to the minutes. “The long-lasting effects one would like to see from these events would be money invested in infrastructure that stays, not investments in stadiums, which are useless after the events.”