Monday, December 19, 2011

Terence Wall Articulates the Entrepreneurial Mindset to the REC

This past Thursday, following the elections for new officers of the Wisconsin Real Estate Club, we were pleased to have Terence Wall as our distinguished speaker for the evening. Wall is a dedicated alum of the Wisconsin Real Estate program, and offers his time to mentor students and to share his insightful experiences as a self-starter in real estate. His company, T. Wall Properties, is an award-winning development firm based here in Madison that owns more than 2.4 million square feet of space and over 750 acres of land.

To start the evening, he gave us somewhat of a mock “pitch” presentation, similar to what we would see as potential equity investors. This included information about the due diligence performed on his recent project, the facts and specifications about the buildings and surrounding area, and his persuasive evidence as to why this development is sure to succeed.

Wall shared insider tips and tricks to his practice - the type of information that us Real Estate Club members really get to benefit from. This information ranged from his tactics of attracting new investors, retaining old investors, accumulating relevant data, and raising the proper amount of capital. He also shared cost saving techniques from a development standpoint, particularly relating to taxable income and the ability to take advantage of flexible depreciation standards.

When asked to share a one of his greatest learning experience, Wall reflected on his endeavor to develop property in Phoenix, AZ. This began as a favor for a friend that was looking to house his business, and turned into a very profitable investment. Wall proceeded with another opportunity in the area, and was again hugely successful in turning the property over in a very short period while doubling his money. When another opportunity came, he decided to press his luck as a result of pressure from the individuals surrounding him in his company, and reinvest in another large industrial property. “This was against my better judgment” he added, “but I went ahead and did it anyway.” As you might’ve guessed, the recession hit shortly after the investment, and the property sat unoccupied. It was eventually sold for pennies on the dollar. Wall reflected on his decision, and how a string of successful developments might cause one to deviate from their established strategy and push the envelope too far.

A key take away from the evening: “Go with your instincts”.

Monday, December 12, 2011

Mustache Season Has Ended

Seen an unusually low number of mustaches recently? That’s because Movember is over. If your memory needs to be jogged, then see Andrew Toby’s blog post from November.

A group of 20+ MBAs were able to collectively raise $2,590 to aid in the research for men’s health issues like prostate cancer. The Wisconsin MBA group competed in a group of 17 business schools from across the world to see who could raise the most money. Wisconsin ended up finishing in the middle of the pack at number nine in the earnings rankings. The London Business School dominated the competition by raising $32,574 (we here at Wisconsin like to think that some of those gains were resultant from a favorable exchange rate). Overall, teams raised a total of $119,176!

Generous donations were made from faculty, classmates, family, friends back home and even a few anonymous donors. The lady that cuts my hair even said she was going to donate, but she failed to come through. I finished with a paltry $30, but I know that every little bit helps, so I can’t let myself be too discouraged for my miserly family and friends back in Texas. The top fundraiser was from our Brand Management center and his contributions grew to $420 (which is more than can be said for how well his mustache grew). For worthy reasons such as interviews, and more ignoble reasons such as personal vanity, some MBAs were not able to stay the course for the full 30 days. The real estate guys started with six mustaches, but sadly ended with only four. Proudly I can say that my fellow-blogger Andrew Toby and I stayed the course.

I proudly wore my mustache back to Texas over the Thanksgiving break. Many laughed in my face, at my face. I thought it appropriate to wax my mustache, à la Rollie Fingers, per it reaching an envious length. However, on the flight back to Texas, I ended up explaining that this was not normally the way I looked to the couple on the plane next to me. I decided that I couldn’t handle the mustache was through the holidays, so I trimmed it down to the standard Tom Selleck-esque. In response to this new look, the TSA officer at the airport on the way back to Madison said, “Tom Selleck mustache…aviator sunglasses…that is not a safe look.” Despite that comment, he let me on the plane. Believe it or not, I’m looking forward to November next year. I think the real estate guys might have to be in charge of the campaign in 2012…that is so long as the Fed can give us a good exchange rate to work with, so that we can beat those guys at London Business School.



Jordan Denzer comes to Madison from Dallas, TX (it is often joked that he is one of the international students). Previously, Jordan managed corporate flexible spending accounts, but decided that he wanted to get into real estate development, which initiated the move to Madison. Currently, Jordan is interested in getting into historic redevelopment and/or mixed-use development projects.

Friday, December 9, 2011

MBA Team Project


In the first semester of the Wisconsin MBA, students across specializations are grouped and tasked with “creating” a new product for a publicly traded company. This is known as the “Integrated Company Analysis” project or “ICA” for short. ICA projects are worked on throughout the semester, and final presentations are made after final exams. Our grades from these projects constitute a percentage of our final grade for each of our four core classes.

The project begins with a list of the companies that were chosen for projects last year which aren’t allowed to be used again. This policy is so that you can’t get assistance from second year MBA students who previously reviewed that same company. Companies that are chosen for ICA projects are actually notified and invited to attend the presentations. On average, about three companies come each year to view the presentations. This is a unique opportunity, as it provides the company with a vision for a possibly unconsidered new product offering, and it allows the MBA Office to show off its students and build employment opportunities.

My team of five proposed to create an internet radio, much like Pandora, for Amazon. We thought that this would complement Amazon’s existing MP3 purchasing platform. In our concept, a shopper could browse through Amazon while listening to the radio functionality, exposing the shopper to new artists or popular hits, and then songs could be purchased via Amazon MP3. Unfortunately, no representatives from Amazon were available to come and view the presentation.

The members in our group represent the following specializations: Human Resources, Supply Chain, Brand Management, Corporate Finance, and of course, Real Estate. This project fell right into the wheel house of our Brand Management and Corporate Finance team members, but the rest of us had to recreate our areas of expertise. Our Supply Chain team member was a lawyer in his previous life, so he handled all of the legal elements regarding streaming a record company’s music for free over internet radio. The Human Resources team member and I were tasked with evaluating the competitors and the marketplace as a whole for internet radio. Initially this didn’t seem like too daunting of a task, but it is becoming apparent that I was mistaken. Primarily because the internet radio/streaming music industry is so new, we are having trouble finding any applicable resources. We are working with librarians in the business library to help us with research in industry specific publications. This is a critical piece of information so that we can make projections on revenues that could be gained from advertising.

We have another week until our slide deck for our ICA projects are due, just a few days after we finish exams. Then we’ll meet with a business communications specialist and go over our presentation. Finally we’ll do our final presentations that following week.

The semester is definitely going to end with a bang. I’ve gained extraordinary experience from it, but I can honestly say that I’m looking forward to a little R & R over the Christmas break.


Jordan Denzer comes to Madison from Dallas, TX (it is often joked that he is one of the international students). Previously, Jordan managed corporate flexible spending accounts, but decided that he wanted to get into real estate development, which initiated the move to Madison. Currently, Jordan is interested in getting into historic redevelopment and/or mixed-use development projects.


Monday, December 5, 2011

Roses and Badgers are red!

What a weekend for Badger fans! With Saturday night's win against Michigan State, Wisconsin is the Big Ten champion and headed back to the Rose Bowl. This is the second-straight trip to Pasadena where the Badgers will face off against Oregon on January 2nd.

Fans had to act quickly for tickets; the university said today that its allotment sold out as of 9:00 this morning.

For more details of the game and information on the Rose Bowl trip, visit uwbadgers.com.

Photo by Aaron Stroot via Flickr

Friday, December 2, 2011

Real estate alum Jake Wood, co-founder of Team Rubicon, to speak at Dec. 18 Commencement

MADISON - Jake Wood, president of Team Rubicon, a nonprofit veterans' service organization that he co-founded following the January 2010 earthquake in Haiti, will speak at the University of Wisconsin-Madison's 2011 mid-year commencement.

Commencement ceremonies will be held at 10 a.m. and 2:30 p.m. on Sunday, Dec. 18, at the Kohl Center, 601 W. Dayton St. No tickets are required for admission and the ceremonies are open to the public.

Wood's organization provides military veterans with purpose, community and self worth through volunteer service, and gives them the opportunity to use their skills in disaster zones.

The organization aided tornado victims in Joplin, Mo. in May. Team Rubicon plans to begin operating out of 10 U.S. geographic regions in 2012, each carved out according to the Federal Emergency Management Agency's regional model.

Wood, a UW-Madison graduate, served four years in the U.S. Marine Corps. In 2007, he was deployed to Iraq's Anbar Province and in 2008 to Afghanistan's Helmand Valley. He is a leading advocate for veterans and speaks around the country about issues they face on their return home. He also serves on several veteran-focused committees at the national level.

Wood received his bachelor of business administration degree in 2005 with a double major in real estate and urban land economics, and political science. He was an offensive lineman on the Badger football team from 2001-04. Last year, he was honored with a "Forward Under 40" award from the Wisconsin Alumni Association.

This year Wood received GQ Magazine's "Better Men, Better World" award, and the Big Ten Conference honored him with its "Live Big" award for his work with Team Rubicon.
- Liz Beyler, (608) 263-1986, lbkraak@wisc.edu

Monday, November 28, 2011

UW-Madison delegation finds optimism and opportunities in Asia

“Cautious optimism” is the economic outlook from Asia, according to a survey conducted at MIPIM Asia last week by the Wisconsin School of Business in cooperation with HKUST Business School.

“The strong sense of optimism that we’ve seen in the last two years in Asia has been justified,” says François Ortalo-Magné, Albert O. Nicholas Dean of the Wisconsin School of Business, who presented the survey findings at the annual real estate and investment conference in Hong Kong, which is attended by 1,800 senior real estate executives, retailers, government officials and city administrators from 41 countries. This is the third annual investor survey led by Ortalo-Magné at this conference.

An obvious reflection of this optimism is the fact that more than half of the participants surveyed at the conference reported improved or at least the same level of business activity in the current quarter compared to the same quarter last year.

“China is the unavoidable market because of the scale and the performance of the economy,” says Ortalo-Magné.

Ortalo-Magné’s visit is part of the University of Wisconsin–Madison’s broader efforts at deepening relationships with government, business and education leaders in China. He accompanied Gilles Bousquet, dean of the Division of International Studies and vice provost for globalization, and Laurie Dennis, associate director of the Wisconsin China Initiative (WCI), to meetings in Hong Kong and Shanghai.

“The sense that I get each time I visit Asia is that the center of gravity in the world is moving here,” says Ortalo-Magné. Last November, he accompanied former UW–Madison Chancellor Biddy Martin and her delegation on a trip to Asia intended to strengthen academic relationships in the region and promote collaborative economic development.

Bousquet adds, “We are seeking to create a unique UW presence that is consistent with the Wisconsin Idea and highlights the strengths of our world-class university, matched to the needs in China.”

UW–Madison already has a variety of connections with many of the top Chinese universities, including the Hong Kong University of Science and Technology (HKUST).

HKUST Business School is among three of the world’s leading business schools (along with HEC Paris and INCAE-Costa Rica) in a ground-breaking partnership with the Wisconsin School of Business to offer the Global Real Estate Master (GREM) degree program. Joe Walsh, director of the program, joined Ortalo-Magné for part of his Asia trip.

“There is strong demand for high-level education in real estate in Asia,” says Walsh.

Ortalo-Magné and Walsh are working to expand the GREM program, which combines graduate-level instruction in economics, finance, and business administration at one of the partner schools with training in the principles of international real estate during a capstone semester at Wisconsin. They met with university officials, local real estate industry leaders and prospective students.

While in Hong Kong, Ortalo-Magné also addressed the American Chamber of Commerce and met officials with the Royal Institution of Chartered Surveyors (RICS), a prominent worldwide organization for professionals in property, land, construction and related environmental issues. Wisconsin’s BBA and MBA real estate degree programs have been accredited by RICS.

“When I hear this time referred to as the ‘Decade of the Pacific,’ it reinforces to me how much smaller our world is getting and in turn how important it is to have a global awareness in all we do,” says Ortalo-Magné.

-- by Kris Hammargren

Monday, November 21, 2011

Graaskamp Center Thanksgiving holiday hours

The Graaskamp Center will be closed Thursday and Friday November 24-25 for the Thanksgiving holiday.

Grainger Hall will be closing at 7:00 pm on Wednesday, November 23 and will be closed on Thursday, November 24 and the weekend following, November 26-27. Grainger will be open on Friday, November 25 from 7:00 am- 5:00 pm.

Have a good holiday everyone! You can also join the conversation on Twitter:

@UWMadison It's #Thanksgiving week: Before you leave town, tell us what you're thankful for on campus! #thanksuw


Thursday, November 17, 2011

What opportunities are being sought out by Asian, European, and American investors? MIPIM Asia 2011

That was the question this morning for the panel at the wrap-up keynote at MIPIM Asia 2011. Discussion was led by Dean François Ortalo-Magné, with Yue Tang, attorney with Jun He Law Offices (China), and Dr. Megan Walters, head of research for Asia Pacific capital markets with Jones Lang LaSalle (Singapore).

Ortalo-Magné presented the results of the annual survey of conference participants, conducted by the Wisconsin School of Business in cooperation with HKUST Business School. The survey saw a justification of the optimistic outlook in Asia as reported at last year's conference, with more than half of participants reporting improved or at least the same level of business activity in the current quarter compared to the same quarter last year. "Cautious optimism" was a keyword for the future with two-thirds say they are more or as optimistic about the outlook than they were a year ago.

From Reed Midem:
The expert panel also noted increasing investment opportunities for international companies targeting mainland China as legislation seeks to open up the market to a diverse range of development companies.

Watch Part 1 of the wrap-up here. Visit mipimworld on youtube for Part 2-4.



Edited to add:

Tuesday, November 15, 2011

MIPIM Asia: Macroeconomic outlook and implications

Wisconsin School of Business Dean François Ortalo-Magné is in Hong Kong this week for the annual real estate property and investment conference MIPIM Asia. He facilitated the opening keynote session today with Robert Ciemniak, global head of Thomson Reuters Real Estate Markets, and Yiping Huang, professor of economics at the China Center for Economic Research at Peking University. On Thursday, Dean Ortalo-Magné will deliver the wrap-up presentation "Where do Asian, European and American investors see opportunities in Asia today?"

Visit live.mipimworld.com for the full conference schedule and more highlights





His visit to Asia is also part of the University of Wisconsin–Madison's efforts to develop stronger ties with China. The dean will join Gilles Bousquet, dean of the Division of International Studies and vice provost for globalization, and Laurie Dennis, associate director of the Wisconsin China Initiative, for meetings in Hong Kong and Shanghai.

Also participating in MIPIM Asia is real estate faculty member Joe Walsh who also leads Wisconsin's Global Real Estate Master (GREM) program, an intensive graduate-level program which is partnered with three of the world's top business schools: HEC Paris, Hong Kong UST, and INCAE. While in Hong Kong, he is meeting local real estate industry leaders and prospective students. The Global Real Estate Master (GREM), which graduated its inaugural class in 2011, is a unique two-phase program that combines high-level instruction in economics, finance, and real estate finance at one of the partner schools with training in the principles of international real estate during a capstone semester at Wisconsin. The program is now accepting applications for the 2013 semester.

Monday, November 14, 2011

Real Estate Students Embrace "Movember"

Seen an unusually high number of mustaches recently? If you’re near the Wisconsin School of Business, chances are the answer to that question is a definite “yes.” That’s because a team of over 20 MBAs, including six Real Estate students, have chosen to partake in the “Movember” movement that is sweeping the globe.

Pictured (from left): Andrew, Rob, Jordan, Jay, Jeff, and Andrew.

These students (myself included) have dedicated their facial "real estate" for the month of November to raise funds and awareness for men’s health, specifically prostate cancer and other cancers that affect men. During our endeavor to master the art of fine mustachery, we effectively become walking, talking billboards for the 30 days of November. Through our actions and words, we raise awareness by prompting private and public conversation around the often ignored issue of men’s health.

The team has already raised over $1,000, and there's plenty of time left in the month to keep the effort going! The movement has been a great way to connect with classmates and support a very worthwhile cause. Team captain Topher Stephenson has done a great job recruiting team members, and the Graduate Business Association has assisted in promoting the cause in the Grainger Squire. We are in an "MBA Challenge" network, in which we compete against other MBA programs across the globe for the most donations received. We are currently in 8th place, and hoping to continue the strong presence!

Interested in joining the team or making a donation? Visit team Mustache MBA homepage for details!

Andrew Toby is a first-year MBA student in the James A. Graaskamp Center for Real Estate. A CPA from California, Andrew hopes to utilize both his accounting background and the knowledge gained in the MBA program to pursue a career in private equity investments in real estate.

Wednesday, November 9, 2011

Real Estate Club Build Day with Habitat for Humanity!

On Friday, October 28, 2011, members from the UW Real Estate Club volunteered with the UW Madison Chapter of Habitat for Humanity, an organization that builds homes for families in need and provides mortgages at a zero percent interest rate. Included in the group were club members and Graaskamp Center affiliates Grant Keebler, Sam Schreiber, Kelsey Friederich, Alison Zuba, Courtney Flanders, and Martha Flanders (pictured left to right). We had gorgeous weather and a positive attitude - what better way to spend a beautiful Friday afternoon in Madison?

The house is being built for Song Vang (pictured far right), Neng Cheng, and their five adorable children. They currently live in an apartment building, infested with cockroaches and with landlords who do not care about their tenant’s living conditions. The family’s dream is to own a house one day with enough room for their children to grow up happy and healthy, in a loving and warm environment. Song devotes every weekend at the build site, working with different Madison volunteers and sharing his story. It was such a moving experience to work alongside the homeowner, Song, as his dream home was being built.

Construction began on October 1, 2011 and will continue into the winter. When we arrived, the basement was underway and we all worked on different projects ranging from measuring and cutting 2x4’s, nailing an interior wall together with three separate doorways, constructing the window supports, and a final (and very intense) group project involving the movement of a heavy shower base. The majority of the volunteers had minimal construction experience, so the day was spent learning from the other volunteer’s prior experience, from the projects director and UW-Madison Habitat representative Devin (pictured top left), from the homeowner Song, and from the project manager, Justin (pictured top right).

Working with Habitat for Humanity was an incredible experience, and is highly recommended by all of the volunteers who participated. If you are at UW student or employee and are interested in helping Song and Neng build their new home, contact Devin Burke at workprojects@uwhabitat.org. For more information about Real Estate Club volunteer opportunities, you can contact Courtney Flanders at flanders2@wisc.edu.




Wednesday, November 2, 2011

From full-time employee to full-time student

As part of our Meet Our Current Students series, first-year real estate MBA student Jordan Denzer reports on student real estate activities and life in general.

I’ve been in Madison for 2.5 months now. Coming from Texas, I’m thoroughly amazed at the fact that there are actually four seasons, as opposed to just two. Right now the leaves are changing colors and falling, but it’s not the standard Dallas version of trees shedding their foliage, where the leaves fall in two weeks and give an onlooker a limited visual appeal. Fall in Madison has a myriad of colors and seems in no hurry to leave. Unfortunately, both still require the prongs of a rake. I have also jumped into Madison’s bicycle culture, riding my bike as my primary means of transportation and am thoroughly enjoying it. I’ve gotten fenders put on it, so as to effectively navigate wet streets, and I understand that you can even get snow tires for winter riding, but I’ll wait and see how appealing that sounds once the snow starts hitting the ground.

I also have crossed off two items on my Wisconsin bucket list*. I have been both to a Badgers’ and Packers’ football game. While both have their strong suits, I must say that I enjoyed the Badgers’ game more than the Packers’. I love the experience of “sitting” (or more accurately, standing) in the students’ section. The student interaction with the activity of the game is great and keeps you on your toes for the next group response, counting of Bucky’s push-ups after a score or jingling of keys for a kick-off. Of course, I can’t forget to mention the “Jump Around” explosion that happens after every third quarter – those are a blast! Unfortunately though, the Badgers have now lost two games in a row (Michigan St. and Ohio St.), so any hopes of contending for the national championship are down the drain. That said, the Packers are still in the hunt, and I had the pleasure of seeing them dismantle the St. Louis Rams with a fellow international student (Canadian) at Lambeau. An unpleasantry of the Lambeau experience was dealing with scalpers and paying three times face value for our tickets. The game wasn’t nearly as interactive as the Badgers’ game either, but it did have redeeming qualities. First of all, I was in a football shrine at Lambeau and loved it. Second, the group of people I attended the game with moved tailgating from its normal pre-game position, to a 9 to 5 endeavor. Only two of the 20+ in our group went to the game, as all others stayed in the parking lot the entire time, but they weren’t lacking in comforts, as we came with a fully-enclosed packed trailer, a generator and more food and beverages than you could shake a stick at.

*Wisconsin Bucket List:
Badger football game: check
Packer football game: check
Ice fishing: pending

Now regarding academics (what I’m really here for), specifically the real estate program, there is much to be said. Two weeks ago, the Graaskamp Center had the fall meeting of its Board of Advisors, a group of senior level real estate industry leaders who are alumni and friends of the program. The meeting’s theme was, "Real Estate in Recovery: Navigating a New World of Risk and Reward", and the keynote speaker was author, UW professor and geo-political expert Jon Pevehouse. Following dinner at the newly-finished Wisconsin Institute for Discovery, Pevehouse spoke regarding geo-political events in the past and present and their impact on current economic situations. One memorable point of the talk was a test that had been used to indicate the corruption level of a nation’s government. Pevehouse cited a study that had been done in New York City on parking tickets received by diplomats of foreign embassies, and he showed that the home countries of the diplomats who received the most parking tickets lined up well with high corruption levels in those countries. The following day was filled with panel discussions on the “New Risks of Global Economy,” “Understanding the Global Economy,” “Public Real Estate Markets,” “Global Strategies of Private Equity in Real Estate,” and “China’s Rise.” Between panel discussions, I had, along with the other MBA students, had the great opportunity to network with board members and discuss current issues in real estate.

On the class work front, my real estate class this semester, Real Estate Finance, has its first exam this week, so it has been a steep learning curve for this career changer (previously I managed corporate flexible spending accounts). Not only am I familiarizing myself with the various financial components involved with real estate, but I am also learning how to use my financial calculator appropriately. I’m currently using a TI BA II Plus calculator, and I encourage any prospective students reading this blog to familiarize themselves with that calculator, unless you already have a financial calculator with which you’re comfortable. The more you have under your belt prior to entering the program, the more it will serve you in the long run, as you’ll be able to focus solely on the course material and will not have to worry regarding calculators and computer programs. That said, I’ve found that classmates who are more advanced in certain subject matters are eager and willing to help you, so it makes for a supportive learning environment. You don’t feel like your out on an island, but that you are in it together with your classmates.

Later this month, I’m looking forward to hearing from Dan McCaffery, Chairman and CEO of McCaffrey Interests in Chicago. He will be the featured speaker in the E.J. Plesko Distinguished Speaker Series in Real Estate Development on November 11. The series features developers who embody the "Wisconsin tradition" in their spirit, imagination, entrepreneurial skills, and enthusiasm for improving the quality of the built environment. It's also a great complement to the Center's real estate curriculum.

Jordan Denzer comes to Madison from Dallas, TX (it is often joked that he is one of the international students). Previously, Jordan managed corporate flexible spending accounts, but decided that he wanted to get into real estate development, which initiated the move to Madison. Currently, Jordan is interested in getting into historic redevelopment and/or mixed-use development projects.

Thursday, October 27, 2011

Mortgage REITs: too hot to touch?

By Erwan Quintin, Assistant Professor of Real Estate at the Wisconsin School of Business

At a time where a wall of cash is sitting on the sidelines looking for yield, mortgage REITs have garnered a lot of attention. The recipe is simple: 1) borrow short term at rates currently near 0% and invest in mortgages or mortgage-backed securities, 2) lever highly, and voila, dividend yields close to or in excess of 20%.

The catch behind these lofty yields, of course and as always, is risk. Minor changes in the spread between mortgage rates and short rates can cause yields and market valuations to fluctuate wildly. The past few weeks are evidence of that, as the Motley Fool explains here.

At this juncture, a mortgage REIT play is a bet that the yield curve will continue to slope sufficiently up for sufficiently long. The Fed has promised to keep the short-end down until 2013 but, at the same time, has announced its intentions to bring the long-end down. Its ability to deliver on both objectives will define mortgage REIT returns over the next few quarters. As the Motley Fool writes, REITs can take steps to mitigate their exposure to yield curve inflections, choose their preferred location on the yield/risk menu, and in the process target investors with different tolerances for risk.

Wednesday, October 19, 2011

Discussing causes and consequences of the housing crisis at the Chicago Fed

By Erwan Quintin, Assistant Professor of Real Estate at the Wisconsin School of Business

The Real Estate Department's Housing-Urban-Labor-Macro (HULM) conference took place this weekend at the Federal Reserve Bank of Chicago. The conference, a bi-annual event founded three years ago by my colleague Morris A. Davis, brings together individuals who are pushing the frontier in all aspects of real estate research. It is now recognized in academic circles as one of the premier events in urban and housing finance research.

As one would expect, much of the event focused once again on the causes and consequences of the recent housing crisis. No fewer than three competing explanations were proposed for the run-up of home prices until mid-2006 and their sharp collapse thereafter: the unintended consequences of the toughening of personal bankruptcy statutes in 2005, the role of speculators on the way up and the way down, and plain-old herd behavior. A session -- highlighted by presentations by UW's own Randy Wright and Morris Davis -- discussed the impact of inflation on housing investment and prices. Several papers also took on standard themes in urban research: Why do productivity and wages differs so much across cities? What accounts for patterns of trade across cities? Details and papers are here.

A unique aspect of this event is the collaboration it fosters between academic researchers who study optimal policy responses to various real estate events and the very people who implement these policy responses, including not only Federal Reserve economists but also researchers from government-sponsored agencies (GSA). The next installment of the conference will take place at the Federal Reserve Bank of Boston in March 2012.

Friday, October 7, 2011

Applying for the Wisconsin MBA in Real Estate: Tips from the Associate Director of Recruiting

The application season for Fall 2012 admission to the Wisconsin MBA is now underway. The first round deadline is November 4, 2011. We sat down with Sharon McCabe, Associate Director of Recruiting and Career Services for the Graaskamp Center, to talk about the admissions process and her suggestions for candidates for an MBA in Real Estate.

Is a business background required and how much work experience should a candidate have?

In general, our MBA students in real estate have 4-5 years of professional work experience; the Wisconsin MBA requires a minimum of two years. Some students come from real estate or finance related functions. But just as real estate is a multi-faceted industry, our students come from many backgrounds including economics, engineering and law, even politics.

What I think is more important than a specific type of past training, is life experience. We believe that the real-life experience that every student brings into the classroom is very important. Our students come to Wisconsin with strengths along different dimensions, and through our program round out their skill set in real estate.

What GMAT or GRE score is needed?

A Graduate Management Admissions Test (GMAT) score taken within the past five years is required. The GRE may be accepted, on a case by case basis, in lieu of the GMAT. The real estate program is very competitive with average GMAT scores in the upper 600s, but the range for individual students is broad. We look beyond test scores to a candidate's whole application when making our admissions decisions. However, we do give particular attention to the quantitative dimension of the score. Familiarity with quantitative concepts-business ratios and balance sheet basics-is a good foundation to have. While real estate may be a relationship driven business, it's a practical, numbers driven business too.

What else do you look for in a candidate?

I think, most of all, the thread that connects the most successful practitioners in real estate is passion for the craft. That passion can manifest itself in different ways. For some, it starts as an interest in construction, how things get built. For others, it's a consciousness of the built environment or an appreciation of how development can affect a neighborhood or community. For still others, it is the realization that real estate investment can be both tangible and profitable. I think it's important for MBA candidates to be aware of their own journey to this point and to be able to articulate their unique passion for real estate.

What career options are available for graduates with an MBA in real estate?

The Wisconsin MBA in Real Estate is designed to challenge our students to reach their potential as talented, passionate and socially responsible leaders in real estate. Through the exceptional breadth and depth of our curriculum, access to world-class faculty and practitioners, and our global alumni and industry connections, our students are uniquely prepared for their careers and to make their mark on the urban landscape. Graduates commonly follow five basic career paths: development, lending and financing, asset and portfolio management, advisory services, and economic development and public policy. They also have access to a wide variety of resources to support them during the job placement process.

I have seen an increasing number of opportunities available to our students, even as the challenges to the economy continue. Real estate is a fundamental part of the economy; everybody needs it. Trends in population growth indicate an expanding need for both residential and commercial space. Even if population growth stopped, buildings age and need replacing, technology changes and facilities need upgrading. Real estate as an industry is remarkably resilient.

What's the best way to find out more about the Wisconsin MBA in Real Estate?

Come to campus! We're available Tuesdays and Thursdays during the fall semester to host prospective students. Sign up online for a day on our campus in Madison which includes a visit to a class, lunch with a current MBA student, and interviews with me and with the admissions office for the Wisconsin MBA. I think it's a fantastic opportunity to see our beautiful campus in person and to help us get to know our candidates better. But if coming to Madison isn't possible, I am happy to talk with prospective students over the phone or I can connect candidates with one of our real estate alumni in their area. We have some of the most active and engaged alumni in the industry who are amazing ambassadors for our program.

When should candidates apply?

We are taking applications now for the Fall 2012 intake. Wisconsin offers four application rounds; the first round deadline is November 4th. Candidates can visit the Wisconsin MBA Admission web page for dates and more information on the application process. While we look for the best candidates throughout the process, I would encourage candidates in real estate to apply in the first two rounds.


The decision to pursue an advanced degree in real estate is a personal one, and the reasons vary widely. What the Wisconsin MBA in Real Estate offers is this: the foundation in business of an MBA and the specialized focus of a master's degree in real estate. The innovative and top-ranked program at Wisconsin is an in-depth real estate graduate education experience you won't get anywhere else.


Contact us today:

Sharon McCabe
Associate Director of Recruiting and Career Services.
Phone: 608/890-2493
Email: smccabe@bus.wisc.edu


Sharon L. McCabe is an associate director within the Graaskamp Center for Real Estate and a faculty associate in the Real Estate and Urban Land Economics Department, both in the University of Wisconsin-Madison School of Business. Over the last ten years, Sharon has taught several different classes at both the graduate and undergraduate level. Sharon also is actively involved in the recruitment, retention and placement of the real estate MBAs in the program.

Sharon has spent over 20 years in the real estate industry as a market analyst, appraiser, assessor and instructor. She has experience valuing all types of commercial properties including shopping centers, hotels, office buildings and both market-rate and subsidized apartment buildings. As a commercial assessor for the city of Madison, she was responsible for valuing over 1,000 properties worth over $1 Billion dollars for ad valorem taxation purposes.

Sharon has a Bachelor’s of Science degree in Urban Land Economics and a Master’s of Science degree in Real Estate Appraisal and Investment Analysis, both from the University of Wisconsin- Madison. She is a real estate broker, certified general appraiser and a licensed real property assessor.

Wednesday, October 5, 2011

Innovator award recipient Michael Ashner shares career insights with students

As part of our Meet Our Current Students series, first-year real estate MBA student Jordan Denzer reports on the fall presentation of our Innovator Award.


Michael Ashner, Chairman and CEO of Winthrop Realty Trust received the Real Estate Club's Innovator Award at its first official meeting of the Fall 2011 semester on September 23rd at the Pyle Center. Truly an innovator in the real estate industry, Ashner was chosen for the award for founding the first ever group of tender offers for publically traded real estate companies.

Serving as the Chairman and Chief Executive Officer of Winthrop Realty Trust since 2004, Ashner's company acquired over $12 billion of real estate, including 85,000 apartment units, 50 million square feet of office, retail, and industrial assets and 1,000 hotel rooms. Ashner also served as the Chairman and Chief Executive Officer of Winthrop Realty Partners, L.P., a vertically integrated property management firm, since 1996. Winthrop Realty Partners has managed more than 500 limited partnerships, of which in excess of 50 were publicly reporting with over 100,000 investors, as well as five publicly traded REITs.

Graaskamp Center Executive Director Michael Brennan began the evening's discussion by citing Alexis de Tocqueville's statement, "we bear the mark of our origins" and asked Ashner to discuss his roots and his career progression to where he is today. Ashner began by saying that after he received his undergraduate degree in philosophy from Cornell, he quickly "realized a need to eat and to have shelter," so he decided to pursue his JD at the University of Miami.

Ashner initially worked as an attorney in corporate securities, where he learned about REITs and real estate syndication. This experience eventually led him to leave the legal professional and become a buyer of failing real estate syndications. He quickly learned how to value real estate and the nature of how markets ebb and flow. Ashner said he does not believe in efficient-market theory, "Value investing is a proposition in which the investor is betting against the generally held beliefs of other investors, as indicated by their actions in the market. If you think where you are is correct, and you've done the valuation, then make the bet."

He also discussed the difficulties in the valuation effort, stating that valuations will always be wrong because no one can accurately forecast value. Despite all number crunching and scenario analyses, "if a butterfly burps in China, then your Argus evaluation is going to be wrong."

Ashner's candor and insight was both captivating and instructional for students and staff alike. The Real Estate Club thoroughly enjoyed his visit and we are proud to have been able to present him with the Innovator Award.

The Innovator Series Award was conceived from the paper entitled "The Wisconsin Program in Real Estate and Urban Land Economics: A Century of Tradition and Innovation," written by Stephen Malpezzi, Chair of the Real Estate Department. The paper's central theme is that a rich history cannot be established without continually implementing innovation. Previous recipients of the award include Nicholas Billotti of Turner Construction, Laurence Geller of Strategic Hotels and Resorts, David Brain of Entertainment Properties Trust and Hersch Klaff of Klaff Realty.

Jordan Denzer is a first-year MBA student in the James A. Graaskamp Center for Real Estate. Jordan arrived in Madison from Dallas, where he previously worked in the benefits administration field for CONEXIS. He obtained his BBA in International Business from Stephen F. Austin State University.

Friday, September 30, 2011

Message to a prospective student

Since we launched our blog in 2009, we have asked MBA students in the Graaskamp Center to contribute to a series called Meet Our Current Students. In their posts, they share their impressions and experiences of their first-year in the program. In his first post for us, Andrew Toby has a message for prospective students:

It’s that time of year. The leaves are beginning to change color, the weather is cooling down, football season is under way, and, for prospective MBA students, the first round admissions deadline is rapidly approaching.

For me, this took place a year ago, although it seems like just yesterday. My intent for this message, however, is not to get nostalgic about the endless hours of program researching, resume refining, and essay editing that I experienced. Rather, it is to reflect on my experience during my first month with the program.

Let’s take a look at some of the things that I’m enjoying about the program (and living in Madison) so far:

Specialization classes begin immediately. No waiting until your second year to finally get to the material you came back to school for. The first year MBA class is taking Real Estate Finance with Erwan Quintin this semester. The class is challenging but incredibly informative and applicable to the industry, and we often spend a good portion of class time just discussing current events (which are abundant given the current financial condition of the economy). I can honestly say that the material being covered in this class is precisely what I was looking for in Real Estate MBA education.

The alumni are interactive and supportive. One of the program’s greatest strengths is its alumni, and there was no time wasted in getting linked into the network right as the program began. We have registered as student members of the Wisconsin Real Estate Alumni Association (WREAA), which allows us access to alumni events, job postings, etc. Each student has also been paired up with an alumni mentor for more in-depth, one on one interaction and support.

The high regard for the program draws visits from other prominent industry professionals. Our interaction with prominent industry professionals is not just limited to our alumni. Within the first few weeks of the program, we have already been fortunate enough to receive a visit from Brad Olsen of Atlantic Partners, Ltd, who gave a thought-provoking lecture on global real estate. We also had some face to face time (via Skype) with Jay Lehman, Director of National Recruiting at Toll Brothers, Inc. for some direct advice on career preparation. Jay has interviewed thousands of candidates and reviewed even more resumes from applicants hoping to crack into the real estate industry, so the advice he was able to share with us was invaluable. The Wisconsin Real Estate Club also presented the Innovator Award to Michael Ashner of Winthrop Realty Trust, who took time to share his thoughts and advice about succeeding in the industry.

Madison is a great city. There hasn’t been any shortage of activity in Madison - so much, actually, that I could write an entire post solely discussing all the things that I’ve had the opportunity to do since I moved here. Even more specifically, as I consider myself somewhat of a foodie, I could also dedicate a post to the plethora of delicious restaurants I’ve dined at during the last month. From the activities on the lake (sailing, kayaking, fishing, skiing, etc.) to live music (including many free shows and festivals), Madison is sure to entertain. (The Madison Experience, video)

These are just my some of my first impressions, and I’d like to tie them together with a huge emphasis on how happy I am with my decision to attend the Wisconsin School of Business. Making the decision to go to b-school is tough, and choosing which school is right for you can be agonizing. As a guy who had previously spent his entire life in California, I know that the adjustment can be intimidating. Rest assured that Madison, UW, and the Graaskamp Center for Real Estate combine to make a welcoming place that you’ll be happy to call your new home.

Andrew Toby is a first-year MBA student in the James A. Graaskamp Center for Real Estate. A CPA from California, Andrew hopes to utilize both his accounting background and the knowledge gained in the MBA program to pursue a career in private equity investments in real estate.

Thursday, September 29, 2011

Nobel laureate in economic sciences to visit campus next week

Professor Elinor Ostrom, American economist and 2009 Nobel Laureate in Economic Sciences, is visiting our campus on October 6th as part of the University of Wisconsin-Madison Hilldale Lecture Series. A Wikipedia entry describes her as "one of the leading scholars in the study of common pool resources (CPR). In particular, Ostrom's work emphasizes how humans interact with ecosystems to maintain long-term sustainable resource yields. Common pool resources include many forests, fisheries, oil fields, grazing lands, and irrigation systems." In 2009, she received the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel "for her analysis of economic governance, especially the commons."

"The Hilldale Lecture Series, inaugurated in 1973-74, is sponsored by the faculty's four divisional committees - Arts and Humanities, Biological Sciences, Physical Sciences, and Social Studies - - and funded by the university's Hilldale Fund. The series gives each division the unique opportunity to present to the university community distinguished thinkers whose contributions to contemporary culture and science have received international recognition and acclaim. All lectures are free and open to the public." (from the Secretary of the Faculty website)

Ostrom will also participate in a program co-sponsored by the University of Wisconsin Law School and the Law School's Program in Real Estate, Land Use, and Community Development. Wisconsin Real Estate's Stephen Malpezzi will be a panelist in the program as well. They will be joined by Professor Daniel Bromley (Department of Agriculture and Applied Economics), Professor Neil Komesar (Law School), and Professor Melissa Scanlan (Law School and the University of Wisconsin-Milwaukee's School of Freshwater Sciences). They will discuss how common-pool resource issues are relevant in his or her field and how law and policy have/have not or should/should not develop to address such issues.

Tuesday, September 27, 2011

Remembrance for Mason Carpenter

by Stephen Malpezzi, Department Chair, Professor and Lorin and Marjorie Tiefenthaler Distinguished Chair in Real Estate

We in the Real Estate Program join the rest of the UW community, his family, and many others, in mourning the passing of our friend and colleague Professor Mason Carpenter.

As many readers of this posting know, Mason was Weikel Professor of Leadership in our school’s Management Department. Academically, Mason a prolific scholar, one of those unusual individuals who publishes both in the top research journals in his field like the Academy of Management Journal, and who simultaneously write the textbooks that interpret that latest research for students and the business community. A master teacher, Mason’s enthusiasm for his subject was evident to his friends on the faculty as well as to the many students he touched.

A true believer in a boundary-free UW and “lifetime learning,” Mason liked to open up his teaching beyond the classroom to anyone who would take a little time; the second best way to remember him is to have a look at some of his teaching materials that he thoughtfully posted here and here.

Here you’ll find a wealth of practical and experiential material, on topics like how to build a more productive network, effective mentoring, and deeper ways of thinking about diversity. Those of us who teach will find material on how to be a better teacher. Mason was a great producer and collector of multimedia; the websites will connect you to many of his own lectures on YouTube as well as lessons from clips from Dr. Strangelove, Glengarry Glen Ross, and of course The Onion.

So, what’s the best way to remember Mason Carpenter? I can think of no better way to honor Mason’s love of learning than to consider contributing to his children’s education. A fund for the future educational expenses of his sons Zachary (13) and Wesley (9) has been established. Donations may be directed to the Carpenter Family Fund, M&I Bank, 7447 University Ave., Middleton, WI 53562.

Friday, September 23, 2011

"The Calculator"

by Stephen Malpezzi, Professor and Lorin and Marjorie Tiefenthaler Distinguished Chair in Real Estate

In the midst of all the to-ing and fro-ing over Hewlett Packer's boardroom issues, it's nice that yesterday's FT contained a paean to the HP 12-C, on the iconic financial calculator's 30th anniversary. (Handheld device that remains a must-have, Financial Times, 9/22/11)

Sherlock Holmes used to refer to Irene Adler as simply "The Woman."

Readers of a certain age -- who cut their teeth, as I did, on their trusty K&E slide rule, and punching cards in the middle of the night for a mainframe -- will understand why for thousands, the 12-C is still "The Calculator." It's a modest little gadget, roughly the size of a larger smartphone, but it gave us hand-held power and reliability that used to require signing up to a computer services bureau.

I'm an Excel freak now, and rarely turn my calculator on in anger. But for quite a while, anything important in Excel was also checked using my HP 12-C.

One morning a decade ago, I found that I had dropped my beloved 12-C under my equally beloved La-Z-Boy the previous evening; and some heavy rocking had put a deep curve in the case. To my astonishment, when I turned the deformed unit on, except for a switch to European notation (which wouldn't turn off), everything else continued to work. My trusty 12-C gave two more years of service, before the battery died and the twisted case made it impossible to change the battery.

With regret, I replaced it with a HP 17-BII. Why? Because many students couldn't follow my examples while using Reverse Polish Notation. (If you know what RPN is, you also know that to know RPN is to love it).

The 17-B can switch from RPN to "regular" algebraic logic, so I can help students one minute and go back to RPN the next.

But it's not the same. I'll bet HP's beleaguered stock gets a little pop this month from a few thousand of us giving into our nostalgia and buying another 12C.

Monday, September 19, 2011

Studying Tax Incremental Financing (TIF) in the field

By Erwan Quintin, Assistant Professor of Real Estate at the Wisconsin School of Business

On Sunday, The Wisconsin State Journal published an opinion piece on the use of Tax Incremental Financing in general and in the specific context of the controversial Edgewater hotel project. The discussion caught my eye as something that could be really useful to my Real Estate Finance students (RE 410 and 710).

It makes for a great read if you have a moment: Get the facts on Edgewater funding, WSJ, 9/18/11

Wednesday, September 14, 2011

Real Estate at UW-Madison again ranked #2 by U.S. News

The real estate program at the Wisconsin School of Business was again recognized among the top three in the country in this week's U.S.News & World Report's 2012 rankings of Best Colleges.

The University of Wisconsin-Madison ranked 10th among public institutions. The undergraduate business program was tied for 14th overall. In 2011, the university ranked 13th among public institutions.

From the UW-Madison press release:

"These rankings are an important national tool used by students and their families when choosing an institution of higher education, and it's an honor for UW-Madison to be recognized among the nation's top universities," says Provost Paul M. DeLuca, Jr.


The strength of the university's undergraduate experience was recognized by its peers, who were asked to nominate institutions with strong programs in certain student academic service areas. UW-Madison was again among the top five most mentioned institutions when it comes to learning communities and undergraduate research/creative projects.

The rankings also noted UW-Madison's undergraduate academic reputation, which takes in to account perceptions from peers and high school guidance counselors. In this category, UW-Madison's score was 30th highest overall and 7th highest among public institutions.


Visit U.S. News & World Report for the full ranking list.

Monday, September 12, 2011

Teaching real-world scenarios through case studies

One of the hallmarks of the Wisconsin Real Estate Program's curriculum is applying business concepts to real-world scenarios through case studies. When students enter one of Senior Lecturer Tom Landgraf's capstone development courses, for example, they aren't faced with a traditional syllabus. Instead, they're presented with a real-world challenge happening right in their own backyard, and spend 16 weeks in small groups working to propose plausible solutions to several development sites. Click to read "Case Studies Bring Learning to Life" in this month's newsletter.

The September issue of our Real Estate Connection newsletter is now available online. Sign up for our email list (via Constant Contact) and you'll get the newsletter delivered to your inbox every month.

Friday, August 26, 2011

Chart(s) of the Week: Housing Starts Redux

by Stephen Malpezzi, Professor and Lorin and Marjorie Tiefenthaler Distinguished Chair in Real Estate

A few weeks ago, when I inaugurated Chart of the Week, we looked at U.S. housing starts using annual data from 1890 to 2010. There is usually more than one way to design a chart, especially for such a key data series. I promised then to do a follow-up with more about starts, and here we are. We’ll use this opportunity to highlight three important elements of charting data: (1) re-expression; (2) periodicity; and (3) seasonal adjustment.

First, re-expression. Two friends -- Nino Pedrelli and Ann Danner -- asked how the key chart would look if we made an adjustment for the changing size of the U.S. population. In 1890, US population was about 63 million; and with average household size of about five, we had about 13 million resident households. Today's population stands at about 310 million, or with a household size of 2.6, about 118 million households.

Let's look at the simple transformation of our annual housing data we presented two weeks ago. (Take a look at that chart first, to refresh your memory.)

Today’s first chart simply divides the annual number of total housing starts by the number of households in the U.S., represented by the thick blue line and the first y-axis. In the starts chart from our first posting, prewar housing starts of half a million to a million didn’t look terribly impressive compared to the postwar starts ranging between 1-2 million and above (until recently). But compared to the number of households, in today’s chart, we see that the 20s were a real boom and bust.


Part of the reason for the relatively high rate of starts many decades ago was higher population growth. Today’s Figure 1 also shows the annual rate of population growth, using the red line and the second y-axis. Pre-Depression U.S. population growth usually ran at 1½ to 2% per year, quite a bit higher than today's 1%. (Note also the decline in population growth during the Depression, and the big one-time shifts in resident population associated with movements to and from overseas during the World Wars). Other factors, not addressed directly in the chart, include changes in the rate of depreciation of typical units, rising incomes and concomitant demand for larger and better units, geographic mobility, and the fact that average household size was declining more rapidly a century ago than it’s declining today.

Next let’s look at the issues of periodicity and seasonal adjustment. Many basic real estate and economic indicators come with varying “time signatures,” e.g. annual, quarterly, monthly and so on. We looked at annual starts before partly because annual data are available for the longest time span, back to 1890. Monthly housing starts data for the U.S. are available after 1959. These are available both as seasonally adjusted, and unadjusted.

Figure 2 presents both these monthly series starting in 1987. We start in 1987 instead of 1959 here simply to allow the reader to see patterns within years more clearly.


Seasonal adjustment arises because when we look at one month (or quarter) of data and compare it to the previous period, we often wish to somehow account for regular and fairly predictable changes in certain months or quarters. For example, weather affects construction – more new houses are started in May than in January for obvious reasons (at least in Wisconsin).

Many time series, then come two ways – seasonally adjusted (often expressed at annual rates), or not seasonally adjusted. The seasonal pattern in Figure 2 is obvious, with unadjusted starts spiking in April or May of most years, hitting low points in December and January.


Figure 3 presents the seasonally adjusted data all the way back to 1959; and our final chart combines all three elements by presenting monthly housing starts per 1000 population.


Two key results are evident from Figure 4. First, we see a declining trend in starts per capita over the last 50 years; this trend remains even if we omit the last few years of data. Second, even after accounting for this trend, recent housing starts are the lowest that we've observed per capita since collection of the monthly data began in 1959.