Wisconsin Real Estate Viewpoint

UW-Madison Ranked in Top Ten Best Values

2012-02-10T11:52:00.004-06:00

The University of Wisconsin-Madison was ranked fifth among public universities and colleges by the Princeton Review in their 150 Best Value Colleges in 2012 report. The rankings were comprised of 75 public institutions and 75 private institutions. Criteria for the selections were excellence in academics, a relatively low cost of attendance and/or generous financial aid programs.

"Offering a high-quality public education at an affordable price is one of the bedrock principles of UW-Madison," says UW-Madison Provost Paul M. DeLuca Jr. "But even with the success of such efforts as the Madison Initiative for Undergraduates to deliver additional need-based aid, we will strive to make a UW-Madison education possible for all students."

The guide was developed for students and parents seeking the best value for their money – somewhat of a Consumer Reports on universities.

Stats for the University of Wisconsin-Madison are as follows:

In-State Costs: $21,772 (includes room, board, books and fees)
Out-of-State Costs: $37,521 (includes room, board, books and fees)
Avg Debt at Graduation: $22,837
Avg Need Based Grants: $6,456
Avg Need Based Loans: $3,917
48% of students borrowed
22.5 of freshman receive grants that do not have to be repaid
Avg High School GPA: 3.69

The Princeton Review used cost, academics and financial aid data from surveys of school administrators, as well as student assessments of professors and financial aid awards, to compile the list.

The University of North-Carolina at Chapel Hill was named the nation's best value among public colleges and universities, while Williams College was the top private college. UW-Eau Claire and Beloit College also made the list. UW-Madison was the only Big Ten institution among the top 10 public universities.

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.

Brad Olsen Visits Real Estate Club

2012-02-03T11:05:00.006-06:00

Brad Olsen of Atlantic Partners spoke at the Real Estate Club meeting to kick of the spring semester and help prepare the students for the upcoming Real Estate Club job fair. Olsen is a longtime friend of the Real Estate program and has been coming to speak since 1983. In an effort to date his start with the program, he cited an early talk he gave as being the impetus for now retired Senior Lecturer Rod Matthews’ efforts to transform UW into a hub for international real estate. He asked for a show of hands from the 100+ students and staff in attendance as to who possessed a passport. All but three had a passport, whereas at the beginning of Olsen’s relationship with UW, only two individuals had possessed passports. In no uncertain terms, Olsen made it clear how broad-ranging the scope of the program has come.

Olsen did his undergrad work at Princeton and received his JD from Harvard. Following six years in law, he moved into the real estate arena, where he helped Richard Ellis to raise money for investment into real estate funds. In 1994, Olsen got tired of living in Chicago, so he left Richard Ellis and moved to Florida, where he subsequently played 66 rounds of golf in three months. He and his wife eventually landed in Raleigh, North Carolina, where he formed Atlantic Partners.

At Atlantic Partners, Olsen works to link global capital with US real estate. Most recently, he’s been working with USAA to raise money in Europe for a fund that is buying government-leased office buildings. As Olsen describes it, “I’m eHarmony for real estate investors. I’m in the business of relationships.” Olsen spends 70% of his time raising capital and 30% advising European investors on US Assets.

Following his history and current dealings, Olsen began coaching the students on how to best prepare for the upcoming job fair. He first asked the students for a show of hands of who had reviewed his website when they learned that he was coming to speak. He used this to transition into the importance of reviewing the 30+ employers coming to the career fair and honing in on those in which you’re interested. He then advised students to be looking for a connection point with the potential employers. He cited the ability it gives you to differentiate yourself in the eyes of recruiters from other candidates. As a follow up he advised students to always send a thank you email and to not be afraid to follow up periodically, but to be sure that the follow up is substantive as opposed to simply a “tickler” email. He recommended that if a student found an online article which he thought would be of particular interest to a person, to email that article to their contact along with a brief note. Olsen closed by citing the overall strength of the Wisconsin Real Estate Alumni Association, and its spot as one of the top alumni associations in the US. He urged students to join and to utilize that tool.

The next morning, Olsen met with the 1^st year MBA students to discuss strategy for their upcoming visit to the MIPIM conference in Cannes France, at which Dean François Ortalo-Magné will be giving the wrap-up keynote address (click here to see our past coverage of MIPIM). Then the Global Real Estate Masters (GREM) students joined in the second hour and Olsen dialogued on international topics such as German life insurance groups’ movement into investing in real estate debt.

The University of Wisconsin Real Estate program was honored to have Brad Olsen come and invest his time and is perpetually thankful for his selfless commitment to the program.

MBA Global Trip: South Africa

2012-01-30T14:58:00.006-06:00

As part of our Meet Our Current Students series, first-year real estate MBA student Andrew Toby reports on student real estate activities and life in general. Also, news stories such as this are available in our monthly newsletter, which you can sign up to receive via Constant Contact.

Each year, the Wisconsin School of Business provides students the opportunity to take an international business class that focuses on a specific country. In this class, the economy and business environment of the particular country are researched and discussed in anticipation of actually traveling to the country and visiting local businesses.

I, along with fellow Real Estate student Jay Jambor, joined 8 other WSoB students in one of this year’s International Business courses: South Africa. Each week in October and November we met for an hour and took turns educating each other on the pressing issues that the South African economy currently faces: post-apartheid racial segregation, unemployment, educational barriers and disparity, distribution of wealth, crime, AIDS epidemic and other healthcare issues, etc. These classes enabled us to having a better foundation of knowledge prior to visiting local companies and allowed us to ask more pertinent, focused questions during the presentations.

The trip to South Africa (“SA”) began in Johannesburg. During our 3 days in SA’s largest city, our company visits included Eskon (the dominant electricity provider for the country), Munich RE, the American Chamber of Commerce, and the Johannesburg Stock Exchange. Each organization began with a comprehensive overview of their operations as a preface to the most pertinent question: what are the challenges of doing business in SA? We found it very insightful to hear the opinions of the executives that we spoke with (which included both men and women of different ethnic backgrounds). In fact, most of these viewpoints on the pros and cons of their country’s economy were drastically different from one executive to the next. While opinions on certain issues remained consistent (the fact that near 40% unemployment is unhealthy and the AIDS presence is overwhelming are facts that are pretty easy to agree upon), other topics brought on entirely different perspectives.

This however, in reality, doesn’t come as a surprise. As time passed in Johannesburg, I became more and more acutely aware of how divided the population is. Joburg seemed to function as a relatively normal city would (with perhaps an even greater amount of expensive cars on the highways – another thing I discovered is that the South Africans opt to display their wealth in the form of a BMW or Audi). However, when traveling to the nearby town of Soweto to visit Nelson Mandella’s old home, we were amidst a sea of shanty towns, a level of poverty beyond anything I had seen. Our driver put it into perspective when he said this: “Take this man here [pointing to a black man sitting in the back of a pickup truck driving down the street]. I know nothing of this man’s life, his background. I have no idea what he does to operate in this country, to make a living for himself, but I can be almost certain that the way he operates in this country and the way that I operate are entirely different, even though we live in the same city. We speak different languages. We both exist here, but we exist separately”. A fact to consider here is that South Africa has 11 official languages, which doesn’t even include a plethora of local dialect differences. This, coupled with decades of legal racial segregation that just ended in 1994, create a divide that makes it no wonder why the population disagrees on political issues.

Johannesburg served as an extreme juxtaposition to our next destination within the country: Cape Town. In between cities, however, we made a quick weekend trip to a game reserve in Kruger Nation Park, or “The Bush” as it is known locally. I suppose a trip to Africa isn’t complete without seeing the “Big 5” - the elephant, leopard, lion, rhino, and buffalo. Our adventures out on the jeep provided us with up close interactions with all of these animals and many more.

With its stunning beaches, beautiful landscape, and expanding vineyards, Cape Town easily draws tourists from around the globe despite its remote location. Although too far for many to have a weekend getaway home, we found that many of the rich and famous of the world opt to buy a second home in the spectacular Clifton area of the city (pictured). I asked around to get an idea of what some of the prime pieces of real estate cost in that location, and was given the answer of about R30-R40 million (The “R” stands for Rand, the local currency which trades at about 8:1 with the US dollar currently). Still pretty pricey, but given the fact that the cost of living is far cheaper that in America, I can see how it is an appealing option for those who can afford it.

Our main company visit in Cape Town was Lomold, the largest plastic recycler in the country. While plastic recycling may not seem all that interesting, what sets this company apart is what they are doing with the recycled plastic. They’ve spent over a decade pumping their earnings into the research and development of a machine that will create complex long-fiber plastic palettes. The longer the fiber, the stronger the plastic, and according to the company founder, Lomold is the first company to be able to produce such a strong plastic in a complex form (that is, rather than just sheets of plastic or other basic molds). It will be interesting to continue to follow this company as it hits the global markets with its revolutionary product.

Further highlighting our stay in Cape Town was a boat trip out to Robben Island, where Nelson Mandella was imprisoned for about 27 years. Similar to Alcatraz but on a larger scale, Robben Island imprisoned the individuals whom threatened or otherwise spoke out against the Apartheid government.

Adding in some leisure time for beach lounging, wine tasting, fine dining, and even a cage dive with great white sharks, the trip really rounded out to be an amazing experience both personally and professionally. A big shout out goes to our class advisor, Assistant Dean Blair Sanford, whose steadfast leadership kept us organized and was key in the trip’s success.

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.

Wisconsin full-time MBA ranks in top 25 in new survey

2012-01-23T08:40:00.000-06:00

In case you missed this item last month from the Wisconsin MBA program, here is some good news from a new survey of U.S. MBA programs:

The Wisconsin School of Business placed 24th in Poets and Quants’ MBA rankings for 2011. Last year, the school held 30th place. This six-point gain was the most notable increase in the list's Top 25.

P&Q’s list is a composite of the rankings done by Bloomberg BusinessWeek, The Economist, The Financial Times, Forbes, and U.S. News & World Report. These rankings, in turn, rely on surveys of recruiters, graduates, and deans - as well as other qualitative and quantitative data.

Poets and Quants is headed by John A. Byrne, former BusinessWeek.com editor-in-chief and creator of BusinessWeek’s rankings of business schools.

This is the first time the Wisconsin School of Business has placed among P&Q’s Top 25. Click here to see the Top 100 U.S. MBA Programs of 2011.

Click here to visit the Newsroom at the Wisconsin School of Business.

What's next for the economy?

2012-01-12T10:46:00.006-06:00

The Graaskamp Center publishes a monthly newsletter on issues and events in the real estate industry and UW real estate community. The January 2012 issue includes this look at the year ahead by members of our faculty and executive Board of Advisors.

With 2012 upon us and a presidential election fast approaching, many of us are trying to make sense of economic news and data that alternately points to a potential stabilization and recovery or to a double-dip recession and a global debt crisis. What should the next administration do about to support economic growth? And how will the spill over from the debt crisis in Europe impact the U.S. economy now and in the future?

To get a better idea of what to expect, we asked a panel of Graaskamp Center board members and our own faculty experts to share their insights and wisdom on these important topics.

David Neithercut, President and Chief Executive Officer (CEO) and a Trustee of Equity Residential, assumed the CEO title on January 1, 2006 and has served as President since May of 2005. From January 2004 to May 2005 he served as Executive Vice President of Corporate Strategy, leading the company's Transactions, Portfolio Management, Development, Condominium and Research groups. From 1995 until August 2004, he served as Equity Residential's Chief Financial Officer. In this role he was responsible for all of the company's capital market activities and participated in debt and equity offerings as well as merger and acquisition activity with a combined value in excess of $10 billion. Mr. Neithercut is a member of the Board of Directors of General Growth Properties (NYSE: GGP), a leading owner and operator of shopping malls.

Timothy Riddiough is the E.J. Plesko Chair of Real Estate and Urban Land Economics, Director of the Applied Real Estate Investment Track (AREIT), and Professor of Real Estate at the Wisconsin School of Business. He teaches courses in Real Estate Finance, Real Estate Capital Markets, and Microeconomics and is best known for his research on real options, mortgage pricing and strategy, and land use regulation. Professor Riddiough is best known for his work on credit risk in mortgage lending, mortgage securitization, real options, REIT investment and corporate finance, and land use regulation.

Michael Robb is Executive Vice President for the Real Estate Division of Pacific Life Insurance. He joined Pacific Life in 1976 and after holding a variety of executive positions with the company, Mr. Robb was elevated to his current position of Executive Vice President of Real Estate Investments in January of 1995. He is responsible for managing a real estate portfolio of commercial mortgage loans, commercial mortgage backed securities, unsecured REIT debt, equity real estate, and servicing portfolios of over $19 billion dollars.

David Shulman is Adjunct Professor and Advisor to the Applied Real Estate Investment Track (ARIET) for the Graaskamp Center for Real Estate. He is also Managing Member of David Shulman, LLC. Shulman was formerly a REIT analyst and managing director at Lehman and was employed by Salomon Brothers, Inc. in various capacities. Professor Shulman has been widely quoted in the national media and coined the terms "Goldilocks Economy" and "New Paradigm Economy." In 1990, he won the first annual Graaskamp Award for Excellence in Real Estate Research from the Pension Real Estate Association.

Question: Since becoming President, Barack Obama and his administration have implemented many fiscal/economic programs and initiatives to jumpstart the U.S. economy. In your opinion, what were the actual results of these programs? Have they helped or hurt the economy?

Neithercut: I think that much of what took place at the onset of the financial crisis was necessary to avoid a total collapse of the global financial system. The government did what it needed to do to stop the problem. From that point forward, I think the government's programs have not harmed nor helped but have been totally ineffective and is a pretty clear example of the government impeding the market's ability to right itself.

Riddiough: At the macro level, results have been mixed at best. Let me focus on one of his particular initiatives, as it illustrates what I believe has been Obama's biggest problem with managing the economy. His whole approach to addressing the foreclosure crisis, although well intentioned, has been confusing and inconsistent. Worse, it has been ineffective and has created additional uncertainty in housing and banking markets. Ineffective and inconsistent policies have created additional uncertainty in an already very uncertain economy.

Robb: I have seen no result whatsoever. There is the Canadian shale fracking project "shovel ready" which would create thousands of jobs which he and the environmentalists won't approve. The housing fix or lack thereof is a joke and he still does nothing but blame the Republicans for the mess we are in.

Shulman: The initial stimulus marginally helped, but the whole notion of "timely, temporary and targeted," is very difficult to implement. Moreover too much of the spending represented the accumulated wish list of the House Democrats. Indeed the support for state and local government probably hurt because it delayed the ultimate restructuring that has to take place. The biggest failure is that "reform" is the enemy of economic growth in the short run. As a result the healthcare legislation likely slowed the economy along with all of the uncertainty associated with the energy bill that failed in the Senate.

Question: Given the current state of politics and the economy, what should Obama or the next administration do to improve and stabilize the economy? In other words, where do we go from here, and how do we avoid making the same mistakes in the future? Please outline three or four points that you feel are most pertinent to you as a real estate professional or to the real estate industry in general.

Neithercut: The answer to our problems can be found in economic growth. We can't tax our way out of it and we can't spend our way out of it. Growth is the answer and I think that growth has been hampered by uncertainty on tax policy, etc. Real estate needs growth to prosper--growth in jobs, growth in income and spending, etc. Economic growth is not evil but is the means by which all else is possible. We need to facilitate credit to small business and have a tax policy that is consistent and fairly applied.

Riddiough:This is a hard question to answer because there is a big difference between what should be done in theory and what will actually get done in the current political environment. Given that the U.S. economy does not slip back into another recession, I do not expect that Obama will be able to get much done until after the next election (should he be reelected). I anticipate that only the Fed will execute policy initiatives over the next year in an attempt to improve and stabilize the economy.

Robb: Approve the Canadian shale project. Spend money to retrain factory workers for 21st century job skills. Do away with ALL tax deductions, including mortgage interest , and only keep ones that actually create jobs and finally, go to a 3 or 4 simple tax rate structure, again with virtually no deductions and exempt from taxes anyone making less than $50,000, but force people off the welfare rolls by getting them the under $50,000 jobs. A lot to ask for but would stimulate both individuals and corporations.

Shulman: Policy is trapped because we probably live in world of "Ricardian Equivalence" which means that deficits today mean tax increases and/or program cuts in the future. A new administration should be supportive of domestic energy and the Keystone XL Pipeline should go forward. A real program would include a major infrastucture expansion that would waive or fast track environmental approval and waive the prevailing wage requirements of the Davis-Bacon Act.

Question: Do you think the Europe and United States are headed toward a debt crisis? If so, how will this affect the real estate markets?

Neithercut: Is there anyone who doesn't think that Europe has a debt crisis?!? And we will have one soon if we are not awfully careful. To not learn from the mistakes in western Europe would be criminal. A debt crisis will inhibit growth and that will be very bad for the real estate markets.

Riddiough: There is already a debt crisis, and it has already shut down the CMBS market after that market had reemerged over a year ago. All very bad news. Be aware of the coming crisis in refinancing a mountain of commercial real estate mortgage debt coming due over the next five to six years.

Robb: They are not headed towards a debt crisis; they are IN ONE. Will only hurt real estate if rates go way up-right now, in this artificial low rate environment, it is actually helping commercial real estate.

Shulman: Europe is in a recession. The U.S. will escape its worst effects providing the Euro crisis does not morph into a banking crisis. Obviously a banking crisis would bring back memories of the Lehman crisis in 2008.

The Graaskamp Center's newsletter The Real Estate Connection is published monthly. You can subscribe (via Constant Contact) here.

Terence Wall Articulates the Entrepreneurial Mindset to the REC

2011-12-19T16:23:00.003-06:00

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”.

Mustache Season Has Ended

2011-12-12T15:30:00.004-06:00

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.

MBA Team Project

2011-12-09T11:54:00.004-06:00

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.

Roses and Badgers are red!

2011-12-05T15:33:00.004-06:00

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

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

2011-12-02T12:06:00.002-06:00

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

UW-Madison delegation finds optimism and opportunities in Asia

2011-11-28T08:43:00.003-06:00

“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

Graaskamp Center Thanksgiving holiday hours

2011-11-21T11:34:00.004-06:00

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

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

2011-11-17T14:11:00.005-06:00

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:

Open publication - Free publishing - More china

MIPIM Asia: Macroeconomic outlook and implications

2011-11-15T15:52:00.006-06:00

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.

Real Estate Students Embrace "Movember"

2011-11-14T15:09:00.006-06:00

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.

Real Estate Club Build Day with Habitat for Humanity!

2011-11-09T13:32:00.017-06:00

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.

From full-time employee to full-time student

2011-11-02T13:43:00.018-05:00

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.

Mortgage REITs: too hot to touch?

2011-10-27T11:41:00.003-05:00

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.

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

2011-10-19T09:26:00.006-05:00

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.

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

2011-10-07T10:40:00.007-05:00

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.

Innovator award recipient Michael Ashner shares career insights with students

2011-10-05T11:54:00.006-05:00

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.

Message to a prospective student

2011-09-30T16:08:00.011-05:00

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.

Nobel laureate in economic sciences to visit campus next week

2011-09-29T12:49:00.001-05:00

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.

Remembrance for Mason Carpenter

2011-09-27T12:37:00.004-05:00

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.

"The Calculator"

2011-09-23T11:12:00.008-05:00

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.

Studying Tax Incremental Financing (TIF) in the field

2011-09-19T10:56:00.003-05:00

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

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

2011-09-14T11:32:00.004-05:00

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.

Teaching real-world scenarios through case studies

2011-09-12T12:37:00.005-05:00

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.

Chart(s) of the Week: Housing Starts Redux

2011-08-26T12:40:00.012-05:00

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.

Are interest rates low enough to get the housing market moving again?

2011-08-19T10:39:00.007-05:00

Yesterday, Madison's Channel 3000 News interviewed Professor Stephen Malpezzi on the outlook on the housing market given historically low mortgage interest rates. (Homebuyers Take Advantage Of Low Mortgage Rates, Aug 19, 2011 - video embedded below)

While the added incentive will likely pickup the housing market, experts don't expect it to be enough to pull the U.S. out of its slump."Getting employment back up is going to have a lot to do with getting that housing market problem healed and getting us back on track," said Steve Malpezzi, a business professor at the University of Wisconsin-Madison.

Professor Morris A. Davis was interviewed on Wisconsin Public Radio on Monday (Mortgage Rates Drop, But Getting a Good Rate Can Be Tough, Aug 15, 2011 + audio): while mortgage rates have reached record lows,

Morris Davis, Associate Professor in the Department of Real Estate at UW-Madison's School of Business, says there's a catch, "It's harder to get a mortgage than it used to be. Underwriting standards are much more strict than they were just a few years ago."

However, (from Channel 3000)

What Malpezzi does caution against right now is flipping a home. He said home values are still fluctuating and could even dip, so it would be difficult to buy a home, fix it up and sell it for a profit within a couple of years.

Welcome MBA Class of 2013

2011-08-16T09:03:00.004-05:00

This week marks the kick-off of orientation activities for the incoming Class of 2013 MBA students in Real Estate and other specializations at the Wisconsin School of Business. We call this orientation period The Wisconsin MBA Experience.

The official beginning of a student’s career as a Wisconsin MBA student is the Wisconsin MBA Experience, an interactive pre-MBA program that takes place prior to the start of formal classes. Over the nine-day experience, students are introduced to the facilities, resources and technology available at the Wisconsin School of Business. They also get to know faculty advisors and fellow classmates, including those in the respective career specialization. Students gain a clear view of the expectations and demands of the Wisconsin MBA program, as well as its policies and procedures.

The 2011 Wisconsin MBA Experience is scheduled for August 17 – August 25 and is mandatory. Classes begin on Friday, September 2, 2011.

Scheduled activities for the 2011 Wisconsin MBA Experience include:

Career Resources
• Overview of MBA Career Development
• Resume Review and Guidance
• Employer Panel Discussion

Teambuilding Events
• Team-building activities led by Facilitator [including the Badger Dash scavenger hunt for Real Estate students--more on that to come!]
• Student, Faculty and Staff Dinner

Review Sessions
• Case Study Analysis and Presentation Review
• Seminars on Leadership, Communication, Strategy
and Teams.
• Math and Excel Review sessions

Enrollment and Advising
• Academic Program Advising
• Payroll and Benefits Review (Merit- Based Aid Recipients)

Click here for more information on the 2011 Wisconsin MBA Experience.

Click here to past stories on this blog about student orientation activities.

And welcome back to the Class of 2012!

Comments on the economy

2011-08-09T13:57:00.013-05:00

It's been an active few days and weeks for economic developments around the world, and everyone wants to know what it all means. Experts on all sides have been weighing in.

Paul Krugman's Sunday column "Credibility, Chutzpah and Debt" has generated a lot of buzz in the media and blogosphere. Associate Professor and Graaskamp Center Academic Director Morris A. Davis says he agrees with about two-thirds of the article.

[And] Neither do market participants ... Treasury yields fell today! So the decline in stocks is about risk or a revision on future growth expectations. (I don't agree with Krugman's assessments that our budget problems are so painlessly fixed).

Davis also notes that the S&P is down nearly 17% in the past 2 weeks which may signal the start of Europe's (2nd) financial crisis and wonders if the big European banks are insolvent.

The housing market continues to depress the U.S. economy ("Why the housing market is still dragging down the recovery," Washington Post, 8/9/11)

A weak housing market can have other adverse effects, too. Some 28 percent of homeowners with a mortgage owe more than their property is worth. That’s bad for obvious reasons—those homeowners are more likely to default and be foreclosed on—but it can also hurt economic output, if it prevents people from moving to take jobs. “A homeowner who is underwater might hesitate to take an opportunity in a different location, because they’d have to move and write their bank a check at closing,” says Morris Davis, an associate professor of real estate and urban land economics at the Wisconsin School of Business—though, he cautions, this effect still isn’t entirely visible in the data.

Beyond wondering about the big picture, the next question people are asking is what does it mean for consumers? See "Downgrade on US debt could translate into higher interest rates on credit cards and mortgages" from yesterday's Washington Post.

And just like a lower consumer credit score implies that a borrower is a less reliable, a lower credit rating for government bonds implies there is more risk involved in lending money to the government.

Prices for U.S. government debt rose in the first few hours of trading on Monday, a sign of increased demand despite the downgrade. But it is unclear what will happen in the long term, because of the unprecedented nature of the lower rating and the decisions by Moody’s and Fitch to keep their highest ratings for now.

S&P’s downgrade may have several implications for homeowners.

For starters, early Monday S&P downgraded the credit ratings of mortgage giants Fannie Mae and Freddie Mac, which are both backed by the U.S. government. That could mean higher mortgage rates for new borrowers.

Variable rate mortgages and home equity loans could become more expensive as well.

The high failure rate for adjustable rate mortgages during the housing meltdown means that today the number of new home loans with adjustable rates is minimal — less than 5 percent of the market, according to Stephen Malpezzi, an economics professor at the University of Wisconsin Business School who follows the housing market.

But Malpezzi still has concerns. Consumers should be aware--even in the best of times, but especially now--of the terms of their financial contracts like mortgages and credit cards. "An amazing number of people don't even know if they have an ARM or a fixed rate," said Malpezzi.

Start with these questions from the Associated Press's article "How to learn if the US downgrade could affect you"

Do you have a fixed-rate mortgage or an adjustable-rate mortgage? What might cause your interest rate to change? How often could it adjust? And what about your credit cards? Do they have a fixed or variable rate?

Research shows many people can't answer these questions.

Consumers need to check the fine print of mortgage documents and credit card agreements.

Here are some questions to ask as you try to assess whether your loans could be affected by the market turmoil:
Can my interest rate increase?
What benchmark or index is my loan or card tied to?
How much might my monthly payments increase?
How many times per year can my rate adjust?

Davis does see a glimmer in the unemployment figures.

...unemployment rates among professionals remain much lower than the overall unemployment rate. The nation's jobless rate was 9.1% overall in July but 4.7% for management, professional and related occupations, according to the Bureau of Labor Statistics.

That relatively strong job market for professionals bodes well for developers building upscale apartments, said Morris Davis, University of Wisconsin-Madison associate professor of real estate.

Wisconsin MBA is hitting the road

2011-08-02T14:48:00.006-05:00

The Wisconsin MBA program is hitting the road, participating in MBA forums around the country and-for the first time-across the Atlantic in London (this Thursday!).

This year we are participating in the Kaplan Road to Business School and the QS World MBA Tour in cities including London, Atlanta, Dallas, Chicago, Seattle, San Francisco, LA, Boston, DC, New York, Minneapolis, and Salt Lake City.

So come to a forum in a town near you, meet with us, and find out how you can put our unique specialized MBA to your advantage. Wisconsin Real Estate alumni will be on hand in several cities to talk about their experience in our program and answer your questions.

Visit our Facebook page for the complete list of cities and dates. Then say hi to Erin and Maria when you see them!

Charts of the Week, Mark II: A Quick Look at the Federal Budget, Past, Present and Future

2011-07-26T10:14:00.005-05:00

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

Yesterday we started a new feature, "Chart of the Week," with a bellwether chart on housing starts over six decades.

Last night, while watching President Obama, Speaker Boehner, and many others opine on our fiscal situation and the debt ceiling, I was moved to re-consult two charts I've used in class recently.

The first chart shows history: it looks at actual outlays and receipts as a share of GDP, annually, from 1950 to 2010. From this we see we have the largest deficit since WWII, because we've managed to combine the highest spending since WWII (Medicare, Medicaid, two wars, "stimulus,"... with: the lowest revenues, as a share of GDP (thanks to the deepest recession, large tax cuts, and a complex set of tax expenditures that beggar belief).

The second chart is a forecast: it shows CBO projections of what would happen to major elements of the budget if past trends in health costs meet the aging boomers. Like all forecasts, in fact more than most, this is a "what-if;" personally I don't think we'll ever see such an untrammeled increase in national income devoted to Medicare/Medicaid in 40 years, but it does tell us we have work to do to fix it. Note also the scary rise in interest paid is despite very conservative assumptions about interest rates, assumptions that may be blown out of the water very shortly.

Presumably our political leaders on both side of the aisles know about these charts. But you wouldn't know if from their recent statements and (lack of) actions.

Our blog presents a range of viewpoints, and you should know that our faculty have a range of views on exactly how to close these gaps. These are not simple questions.

But there is no disagreement on the basic facts in these two charts.

There are lots of ideas out there about how to tackle the deficit issue. My personal views run more along the lines of the Rivlin-Dominici and Bowles-Simpson plans, because Chart 1 reinforces my own view that both revenue increases and spending cuts will be required within a few years to fix this.

What revenue increases, what spending cuts? There is no shortage of ideas and info out there; I have learned from the Brookings Institution as well as our friend Menzie Chinn's (and James Hamilton's) Econobrowser, one of the best macro blogs.

In fact, this morning I noticed that Menzie has a recent entry presenting a version of our first figure (quarterly, with a slightly shorter time span).

Don't like the plans out there? Build your own! The Congressional Budget Office offers "Reducing the Federal Deficit: Spending and Revenue Options" with details, including good estimates of savings, of over 100 options. Last year I assigned my undergrad class the task of building their own plan from this source; feel free to turn your own plan in to me for grading!

Until recently, I thought we had some time to rein the deficit in, though we faced a version of Zeno's paradox: we have to start sometime. The urgency of this posting was originally because of the looming impact of the Federal debt ceiling. This could have extraordinarily serious effects on the economy and on real estate markets. Bertrand Renaud, my good friend and former World Bank colleague, recently pointed me towards "Mortgage Professor" Jack Guttentag's take on this.

But recent reports from the ratings agencies suggest I was too sanguine about the timing of a credible deficit reduction plan, and that a downgrade could come soon; see

Debt Drama Blocks Out Big Picture on Credit, NYT DealBook, 7/25/11

or

Downgrade Threat Looms, WSJ, 7/26/11 (subs required)

Frankly, I'm worried. Bond markets (and stock and real estate markets) could be facing big hits very fast from a default on U.S. debt, "technical" or not, and a rating agency downgrade would be serious stuff even in the absence of default. You've probably heard the current saying, "If you liked September 2008, you'll LOVE August 2011."

Let's shortcut that prediction. We need to put the heat on Congress and the Administration to get a deal done to preserve the U.S.'s credit standing. Now.

Chart(s) of the Week

2011-07-25T14:47:00.008-05:00

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

"Knowledge that is not quantifiable is of a meager and uninteresting kind."
Lord Kelvin

"Any figure that looks interesting is probably wrong."
Sir Claus Mosley, Presidential Address to the Royal Statistical Society

Today we start a new feature, the Chart (or charts!) of the Week.

My students and colleagues can confirm that I'm a numbers freak. I also like to provide students and colleagues with my constructive -- some might say annoying -- suggestions for improving their data presentation.

Recently I've been spending some time working on a new edition of A Primer on U.S. Housing Markets and Housing Policy, coauthored with my friend Richard Green (also impresario of Richard's Urban Blog). For the second edition, we're pleased that Paul Carrillo joins us as the third coauthor.

What better place to start than updating the iconic chart of U.S. housing starts back to 1890! To quote my fellow chart-freak H. Ross Perot, "I find this fascinatin'."

Imagine jumping into the TARDIS and returning to look at these data in, say, 1960. Analysts of the time could have quite reasonably thought of the postwar boom up to a level approximating 1-2 million starts per year as a temporary phenomenon, while the country caught up to the backlog from the 30s and 40s. It would have been a farsighted thinker indeed who would have foreseen how broad postwar increases in income, changes in building technology (think Levittowns and other innovations in development and construction) as well as the expansion of the availability of housing finance, along with the baby boom and other demographics would have lead to the higher, if very volatile, levels of housing starts for another five decades.

Let's dig a little deeper. Chart 1 has three lines: the red line shows private housing starts; the green line shows public housing starts; and the blue line shows manufactured housing placements. All three are in thousands of units started (or placed). We'll focus mostly on private starts at first.

Around the turn of the century -- pardon me, I'm an old person, around the turn of two centuries ago, 1900 -- housing starts were bumping along at around 300,000 units per year; around 1905 they bumped up to around 500K per year. Students of The Panic of 1907 will be interested to find that this financial crisis had minimal impact on housing starts, maybe partly because at the time few households took out mortgages, and those were usually for perhaps a third of the purchase price. Housing starts did start to fall a few years before the U.S. entered WWI; and the 1918 trough in starts, 118K, remains the record low for the 120 years of data we examine.

Post WWI, starts boomed, hitting a quite substantial peak of 937K in 1925. They started to slide well in advance of the stock market crash of 1929, and fell further during the early years of the Great Depression, bottoming at 134K in 1932. Slowly they climbed back during the rest of the 1930s. GDP and unemployment data from that period are subject to larger-than-usual errors, but taking data in hand at face value, after declining by perhaps 30 percent between 1930 and 1933, with a concomitant rise in unemployment to perhaps 36 percent (!), overall GDP clawed back half that loss from 1934 to 1937, while unemployment fell to maybe 20 percent. The economy then took a second hit in the double dip of 1938, with a 4 percent decline in GDP and a return to rising unemployment. Things began to get better the following year, but with continued weakness in employment (Sound familiar? Well, it was, but much worse!)

During the war years, 1941 to 1945, GDP rocketed up by perhaps 70 percent, and unemployment fell to under 2 percent, while housing starts plummeted, as the nation shifted production from housing and consumption goods into military necessities as the U.S. economy became, in President Roosevelt's words, "the arsenal of democracy." Starts hit a trough of 142K in 1944. Then bounced back a bit in 1945 (the war ended in August), and shot up to an unprecedented 2.3 million in 1950.

After that boom, we settled down, but to a much higher plateau of around 1.5M units per year in the 50s and 60s, with substantial swings: peak-to-trough, housing starts varied by a factor of 2 to 1 or sometimes a little more! Housing, as our friend Richard Green has documented more carefully, became the leading edge of many business cycles. (Follow the Leader: How Changes in Residential and Non‐residential Investment Predict Changes in GDP, Real Estate Economics, 1997). Private starts hit their all-time high in 1972, with 2.4 million units underway.

U.S. housing starts took a big hit during the post-S&L boom recession at the start of the 90s; starts hit a low point of about a million in 1991. They then started a long, fairly steady climb back to a peak of 2.1M in 2005. They started to fall in advance of the 2007 Great Recession, plummeting to below 600K in 2009 and 2010. Ouch! These are the lowest levels of housing starts since 1945.

What about public housing starts? These have always been a small part of the market, albeit one that is an important concern of HUD, taxpayers, and of course the families that live in those units. Public housing starts rose during the later years of the Great Depression, maxing out at 87K in 1941. Along with other housing starts, they collapsed during WWII, bouncing back to 71K in 1951, bumping around at 50K or less for most of the 60s and some of the 70s. They declined to nearly nothing in the 70s as the U.S. shifted from "supply side" subsidies to "demand side" housing subsidies, with the creation of Section 8 Certificates, the precursor to today's housing vouchers. You can read more about those policy shifts in the Primer. We haven't built any public housing to speak of in over three decades, but of course we still have a stock that requires management. All in, public housing itself peaked at under 2 million units three decades ago, and now stands at about a million units, or roughly 1 percent of the U.S. housing stock.

Manufactured housing as an industry came into its own in the 60s, peaking at 576,000 placements in 1972 (the same year as the peak year in housing starts; all in, about 3 million units started). For much of the next two decades placements bumped along near 200K, not at all negligible; they hit their second peak of 354K in 1998, then slid; the slide accelerated with the collapse of the housing market in the Great Recession, to a low of around 50K in 2010.

Quite a story, and still not all there is to say about housing starts. In future posts we'll examine monthly data, talk about seasonal adjustment, and relate starts to some basic demographics and other determinants. But for now, contemplate 120 years of housing starts.

What will the next decade, and century, bring?

A few observations on the evolution of our Program and School

2011-07-14T15:55:00.005-05:00

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

We've had two significant changes in the staffing and organization of the Wisconsin School of Business and our real estate program in the past few weeks. On July 1, Associate Professor Morris Davis took the reins as Academic Director of the Graaskamp Center, implementing a succession plan that we've had in place for some time. A very short description of the Graaskamp Center's main functions are to provide a home for the MBA program in real estate, and to implement the Wisconsin Idea by connecting our program more deeply to the worlds of business practice and policy outside the University. Morris' movement into this position is a natural evolution after he so successfully took on leadership of the MBA program last year; now he adds the outreach functions to his portfolio. With the support of the faculty, Center staff, Executive Director Michael Brennan, and the rest of the UW real estate community, Professor Davis is well placed to move the Center to the next stage of its evolution. Morris' deep and probing approach to the study of real estate, and his enthusiasm and out-of-the-box thinking, augur well for our future.

Our second change is even more significant, as on September 1 our esteemed Department Chair François Ortalo-Magné becomes the Albert O. Nicholas Dean of the Wisconsin School of Business, succeeding our program's good friend Mike Knetter. During his tenure as Department Chair, François has worked tirelessly and effectively to move our program and the School ahead, in ways large and small. Most of you know at least the outlines of the Global Real Estate Masters (GREM), our innovative partnership with HEC, INCAE and Hong Kong University of Science and Technology to offer dual degrees to students from those top schools, in the process exposing our MBAs and undergraduates to repeated cohorts of future fellow global leaders in real estate. Perhaps fewer people outside Madison know about many of the other innovations François has pioneered in the "blocking and tackling" of the program, e.g. our marketing, financial stewardship, and curriculum. François has shown repeatedly that he is one of those rare leaders who excel at both the development of innovative strategies and their careful execution.
Right now, the highest priority for our real estate program has to be moving ahead in concert with the Wisconsin School of Business, and I am completely confident François is the right person to build on the contributions of Mike Knetter, (interim dean) Joan Schmit and other leaders of our School.

Naturally, we will have some other changes to announce in the weeks and months ahead as we adjust the roles of faculty and staff in response to these exciting developments. For now, let me simply congratulate Morris and François on their new roles, and convey my own enthusiasm about the possibilities these changes open up for the Graaskamp Center, the entire Wisconsin Real Estate Program, and the Wisconsin School of Business. I have had, and continue to enjoy, the privilege of working with Morris and François and our other faculty and staff, and so many of you who embody those attributes and values that make the Wisconsin Tradition what it is today: intellectual rigor, an ethical approach to our business, great enthusiasm for our students, "continual and fearless sifting and winnowing." I know you will join me in supporting Morris and François in their new roles. On Wisconsin!

Congratulations Dean Ortalo-Magné

2011-07-14T15:10:00.006-05:00

Please join us in welcoming Wisconsin Real Estate's own François Ortalo-Magné as the new dean of the Wisconsin School of Business. The announcement came on Friday July 8. Ortalo-Magné, Robert E. Wangard Professor and chair of the Real Estate and Urban Land Economics Department at the University of Wisconsin-Madison, will begin his new role as the Albert O. Nicholas Dean of the Wisconsin School of Business on September 1. Visit the school's website for the full announcement and more information. Here are a few quotes from the official announcement:

“I am convinced the Wisconsin School of Business is capable of greatness. And we do not have a choice,” says Ortalo-Magné. “We must respond to the globalization of higher education and the revolution in information technologies. I am excited about the opportunity to lead our school, building on our values and the strength of our specializations, renewing and reinventing how we partner with the world and colleagues around campus.”

“François has the intellectual energy and ambition to help the School of Business reach new levels,” says UW-Madison Chancellor Biddy Martin. “I am impressed by his work on the international front and am confident that he will consolidate and enhance the gains made under Mike Knetter’s leadership."

The Financial Times carried news of the announcement on Monday, "Wisconsin-Madison appoints Ortalo-Magné as next dean."

And the Milwaukee Journal Sentinel ran a profile, "UW-Madison names new business school dean," including comments from Bill Malkasian, president of the Wisconsin Realtors Association.

"He sees no boundaries. He certainly understands the world. ...He brings a global perspective."

Congratulations to François and on Wisconsin!

UPDATED 7.15.11

BusinessWeek reported today "Wisconsin Gets a New B-School Dean." Read the article here.

UW's Daily Cardinal also writes ("Ortalo-Magné named B-School dean") that Ortalo-Magné:

intends to strengthen leadership within the business school, continue to learn about how the school functions, and build relationships with other business school deans.

Ortalo-Magné said it is imperative for the business school to respond to worldwide changes in information technologies and higher education, and he looks forward to helping it do so.

Photo: Valerie Caviness

"Sifting and winnowing" at the Wisconsin Real Estate & Economic Outlook Conference

2011-06-13T10:49:00.006-05:00

On Thursday, June 9, the Graaskamp Center held our annual service conference for the state, the Wisconsin Real Estate and Economic Outlook Conference. Academic Director Stephen Malpezzi delivered the following opening remarks:

I'm very proud to be associated with this conference. I want to thank all the speakers and presenters, and especially all of you in the audience, for making this conference a success.

The Wisconsin Idea tells us that the University needs to be connected to real problems and issues faced by Wisconsinites as well as those beyond our physical borders, in the rest of the nation and indeed around the globe. It is our basic job description. As I look over the agenda I think we've put together a meeting that does meet the test of the Wisconsin Idea.

Two years ago we changed the name of our annual conference from the Wisconsin Housing Conference to the Wisconsin Real Estate and Economic Outlook Conference, to recognize the deep connections among housing, other kinds of real estate, and the economy in general.

Over the next few years, as Morris Davis provides the academic leadership for the Graaskamp Center and Mike Brennan leads our connection to the industry, I'll be spending part of my time to strengthen the focus of the Graaskamp Center on economic development.

Details will follow in the months ahead. Today I want to simply bring this effort, and indeed this conference, back to the touchstone of "sifting and winnowing" that is part of our inheritance from our intellectual and institutional forbearers, beginning with Richard Ely. Most of you have heard the phrase, and many of you have seen the plaque atop Bascom Hill, from a century ago:

Whatever may be the limitations which trammel inquiry elsewhere, we believe that the Great State University of Wisconsin should ever encourage that continual and fearless sifting and winnowing by which alone the truth can be found. Taken from a report of the Board of Regents. 1894 [slide of the plaque projected]

As many of you know, this quotation, famous on campus and off, came out of a fierce debate about (of all things) unionization, in 1894. In brief, Ely supported unionization, and some of the Regents did not. They never, to my knowledge, reached agreement on the specific issue, but they did, in the end, establish a firm principle that at Wisconsin, people had a right to speak on different sides of important issues; a right to be heard; and that we owe those with whom we disagree, as well as those with whom we agree, a duty to listen.

To be clear, "sifting and winnowing," doesn't mean that every idea is equal; but rather that ideas should be heard, and examined on their merits, rigorously, rather than reflexively. As Daniel Moynihan famously put it some years ago, everyone is entitled to their own opinion, but not their own facts. Sifting and winnowing helps us establish the facts, and helps us form opinions that are grounded in those facts as well as our values.

Now, in light of the principle of sifting and winnowing, today we aim to have some constructive conversations about housing, real estate, and our state's economic development.

I'm a professor, and I do research on these subjects. But economic development is not simply an abstraction, or merely an academic subject. It touches all of our lives, and our children's lives. Economic development is not just about economics, not just how much stuff we can produce or buy. It's also about how well housed we are, whether we're educated to reach our full potential, how well we attend to our health. It even touches on our basic security, and at the national and global level, questions of war and peace.

The key to understanding economic development is to start by understanding there is no key to economic development. There is no silver bullet. Economic development is complicated.

Unfortunately we live in a world where simple solutions get the headlines. All too often, we talk past each other, cherry picking research and arguments that support our preconceived notions, and ignoring research that challenges our preconceptions. Psychologists call this confirmation bias, and it's a very powerful part of human nature. We're all subject to it. We have to fight it, every day. The best way to fight confirmation bias is to hold to rigorous standards of evidence, and hold your own opinions to the same standard to which you hold others.

For example, if you're a Republican, or a fiscal conservative of whatever persuasion, you might think state tax cuts are a silver bullet. It's important that you know about the substantial body of research that tells us simple tax differences between states explain virtually none of the variation in state economic performance.

To pick another example, if you're a Democrat, or someone who worries about providing enough resources to schools, you might think that more dollars to our schools, perhaps for smaller class sizes, are a silver bullet. It's important that you know that of a number of careful studies done on this issue, so far I've only found one that finds statistically significant relationships between class size and performance, and that only in a few grades. Most careful studies are unable to find a simple relationship.

I can list another dozen silver bullets that aren't really silver. School vouchers, charter schools, passenger rail, spending on roads, less regulation of business, more regulation of business.

It gets even more complicated here. None of these is a silver bullet. None, by itself, are magic beans that take us up the stalk to Economic Development Nirvana. Yet each of these ideas contains some germ of truth, or at least can help us think harder and better about what kinds of things are likely to work, and in what combination. Tax cuts can help if we find ways to preserve essential services while reducing taxes. As a society, we haven't had that conversation yet. Some charter schools, and some public schools, do work as advertised; we need to make sure we figure out why, and replicate and encourage them. As a society, we haven't had that conversation yet. It's not about how much regulation we have so much as what kind of regulation, how we make regulations and taxes and other government interventions smarter. As a society, we haven't had that conversation yet.

Recognizing that some of the best ideas will come from people with whom you disagree, is an important step towards making these true conversations, productive conversations. We need, as Ely and the 1894 Board of Regents taught us, to sift and winnow. Fight your confirmation bias; help me see mine, but in a constructive way. Don't paint yourself, or others, into corners. Determine the facts, and what works, without regard to ideology; and then act on it.

This is why we are here today. Join us in a day of sifting, of winnowing, of learning. Let's move these conversations forward today. Listen, as well as talk. Do recognize that, if we're honest and careful about it, sometimes we'll initially be uncomfortable with what we find. Challenge yourself as well as others. Let's move the conversation ahead, not only today, but over succeeding weeks and months and years. Let's get Wisconsin's economy, and our people, moving FORWARD.

On Wisconsin!

Postscript: Several conference participants and colleagues have asked for more details on Malpezzi's claims that research rarely supports "silver bullet" approaches to economic development. In the next several weeks we'll post some details and references, and seek comments and further conversation.

The Progressive online has begun the conversation, with a commentary on Malpezzi's introductory remarks, and his own brief reply, at Progressive.org.

More "sifting and winnowing" to come!

School of Business dean finalists to visit campus

2011-06-06T12:12:00.005-05:00

From the office of University Communications:

The three finalists for the position of Albert O. Nicholas Dean of the Wisconsin School of Business at the University of Wisconsin-Madison will be on campus in coming days.

Each finalist will spend two days on campus visiting and meeting with people at UW-Madison as the final part of the search-and-screen process.

During their visits, the three finalists will have contact with the broader campus community, from meetings with Chancellor Biddy Martin and Provost Paul DeLuca to gatherings with academic deans, shared governance groups, and students, faculty, staff, alumni and other members of the Wisconsin School of Business community.

The candidates will also hold open sessions in Grainger Hall, 975 University Ave., to answer questions from those interested in the future of the Wisconsin School of Business.
Monday, June 6: Michael Trick, professor of operations research and associate dean for research in the Tepper School of Business at Carnegie Mellon University, 10:30 a.m.
Wednesday, June 8: Anil K. Makhija, Dean's Distinguished Professor of Finance in the Fisher College of Business at The Ohio State University, 2:30 p.m.
Wednesday, June 15: François Ortalo-Magné, Robert E. Wangard Professor of Real Estate at the Wisconsin School of Business, 10:30 a.m.
Live webcasts of the candidate presentations will be available at http://www.bus.wisc.edu.

This morning was the first of the presentations, with Michael Trick. As part of his presentation, he mentioned two books on the future of graduate level business education. I thought this was a good fit for our Reading for Life series (originated by Prof. Stephen Malpezzi, see previous entries in the series here).

The first is Rethinking the MBA by three Harvard researchers Srikant Datar, David A. Garvin, and Patrick G. Cullen; and the other is From Higher Aims to Hired Hands by Harvard professor Rakesh Khurana.

There certainly is no shortage of books on the subject of higher education. Have you read either of these books? What do you think of them? Please share your thoughts in the comments.

Local concerns over housing prices affected by national outlook (video)

2011-06-03T11:29:00.006-05:00

UW Real Estate Professor Morris A. Davis was interviewed yesterday for a story on local concerns about trends in housing prices. Here is the video (via Channel 3000):

Register before June 1st

2011-05-31T10:18:00.007-05:00

Tomorrow is the registration deadline for the 2011 Wisconsin Real Estate and Economic Outlook Conference.

The theme for 2011 is: New Partnerships: Government and Real Estate
When: Thursday June 9, 2011
Fluno Center for Executive Education, Madison, WI

With an exciting roster of panelists and keynote speakers including Governor Scott Walker, U.S. Rep. Paul Ryan, and UW Foundation President Michael Knetter plus Patricia McCoy from the Consumer Financial Protection Bureau, a capacity crowd is expected. Reserve your spot now, click here to register.

Panel discussions will address:
The New Regulatory Realities: What Can You Expect?
The Budget and Financial Reforms: What's on the Horizon?
Financial Reforms and Affordable Housing: What Works

For the full agenda, visit the conference website.

ICSC survey shows salaries and hiring rates on the rise

2011-05-23T09:55:00.006-05:00

An article in this month's issue of Shopping Centers Today (subs required) had good news from the retail real estate sector.

"Nearly 70 percent of the companies that participated in ICSC's most recent survey of North American retail real estate compensation said they were expecting to raise base salaries, and just over a quarter of participants considered boosting staff levels last year."

ICSC's chief economist and director of research said the results "were encouraging and reassuring for 2011 as well, with expectations of continued wage gains across a broader range of the industry."

A full report on the salary survey is available for purchase for ICSC members.

And check out our ad on Page 201!

The International Council of Shopping Centers (ICSC) RECon 2011 convention is taking place this week in Las Vegas. The Wisconsin Real Estate Program is participating.

Stop by our table in university row in the Grand Lobby between the North and Central Halls of the Las Vegas Convention Center.

And join Wisconsin real estate faculty, students, alumni and friends at a networking reception tonight starting at 5:30 in the Bistro Lounge at the Las Vegas Hilton Hotel. For details, visit our Facebook page.

New partnerships at the Wisconsin Real Estate and Economic Outlook Conference

2011-05-10T09:24:00.005-05:00

Wisconsin Real Estate and Economic Outlook Conference:
New Partnerships: Government and Real Estate

Thursday June 9, 2011
Fluno Center for Executive Education, Madison, WI
Register today!

In the wake of one of the worst financial crises in recent history, the Federal government has revamped the U.S. regulatory architecture responsible for safeguarding the financial system. Perhaps the most influential, and controversial, of these reforms is the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Some believe that the new laws and regulations will curtail risk-taking necessary for innovation and growth, while others believe that the new laws change the incentives that encouraged banks and other financial-market participants deemed too-big-to- fail to take excessive and socially undesirable risks.

What we know for sure right now is that it will take some time for businesses to fully assess how they will be affected by the new laws and rules. How will the new Bureau of Consumer Financial Protection affect how real estate and finance professionals do transactions? How will new rules support buyers and sellers, lenders and borrowers? How will the proposed replacement of Fannie and Freddie affect the cost of and access to mortgage credit, and what might the secondary mortgage market of the future look like?

At the 2011 Wisconsin Real Estate and Economic Outlook Conference, we will explore how the new regulatory landscape will affect the size and scope of activity in the real estate and financial services industries. The conference will include thoughts and analysis from experts from the public and private sectors, from government, business, and academia, all of whom are on the front lines of housing market research, policy, and practice. Join this important conversation about the current state of the national housing market and how financial reform efforts will affect the real estate and financial services industries.

Keynote Speakers

Elizabeth Warren, Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau (invited)
Scott Walker, Governor of Wisconsin (invited)
Michael Knetter, President and Chief Executive Officer of the University of Wisconsin Foundation and former dean of the Wisconsin School of Business

Panel Topics

New Regulatory Realities: What Can You Expect?
Budget and Financial Reforms: What's on the Horizon?
Financial Reforms and Affordable Housing: What Works

Click here for the full agenda and to register.

The conference is brought to you by:
James A. Graaskamp Center for Real Estate
Wisconsin Housing and Economic Development Authority
Wisconsin Department of Commerce
Wisconsin Realtors Association
Wisconsin Bankers Association

Corporate sponsorship opportunities are available. Contact Lee Gottschalk at lgottschalk at bus.wisc.edu for more information on how your company can reach a wide variety of professionals and policy makers and support critical housing and community development issues.

Union South gets it right

2011-04-27T09:19:00.007-05:00

That's what the Isthmus had to say about the new Union South student center which opened this month.

Union South is now a warm, sophisticated, grown-up facility -- but it still has a sense of fun.
Isthmus, 4/21/11

The new building, located on the same site as the previous structure, includes many features and green building techniques, all within the project's guiding principle: "Preserving the past. Building the future." The project has been five years in the making, starting in 2006 when students voted to build the new and improved space which includes dining, recreation, event spaces, a hotel, and more.

The $94.8 million project, designed by Workshop Architects and Moody Nolan and constructed by CG Schmidt, includes 276,664 total sq. ft. Funding came from student fees, donor support, and Union operating revenue.

Doors opened at the new facility on April 15, 2011, accompanied by lots of buzz around campus, most notably surrounding the new tall union chairs. The A/V Club-Madison took a special advance tour and called it, "$95 million worth of fun."

The new building also has a new website. In addition to news and information, it also includes floor plans, newsletters and videos during construction, and other details. Check it out online, but better yet, check it out in person!

The state of the housing market

2011-04-19T14:56:00.006-05:00

"There are signs that the two-year drop in Wisconsin home prices had bottomed out, at least in some regions of the state."

That was one of the takeaways from yesterday's Newsmakers interview on the WisconsinEye Network with Stephen Malpezzi, professor with Wisconsin's Real Estate Program and recognized expert on housing and urban development, and Bill Malkasian, president of the Wisconsin Realtors Association. They also discussed current housing inventory and the advantages offered by continued low interest rates to potential home buyers. Visit WisEye.org to watch video of the interview.

Malpezzi also joined a panel last Thursday on KUOW Puget Sound Public Radio to discuss the role of government in the housing market. He, along with European real estate expert Dr. Joaquin Jorge Piserra Ribera and Vancouver Sun Editor Fiona Anderson, tackled questions including: Should the United States change the way it finances real estate? How do other countries do it? Would changing the government's role in the housing market affect the way we think about houses? Visit KUOW.org to listen to audio of the broadcast.

The housing market and the regional economic outlook will be central topics at the Graaskamp Center's annual June conference.

The 2011 Wisconsin Real Estate and Economic Outlook Conference on June 9th in Madison will feature keynote presentations from Elizabeth Warren, Consumer Financial Protection Bureau, and Governor Scott Walker.

This conference will explore how the new regulatory landscape will affect the size and scope of activity in the real estate and financial services industries. How will the new Bureau of Consumer Financial Protection affect how real estate and finance professionals do transactions? How will new rules support buyers and sellers, lenders and borrowers? How will the proposed replacement of Fannie and Freddie affect the cost of and access to mortgage credit, and what might the secondary mortgage market of the future look like? Join this important conversation. Click to view the agenda and to register.

Sixth annual MIPIM trip brings optimism and global connections to students

2011-04-06T15:35:00.005-05:00

At the 2011 MIPIM conference, Professor Francois Ortalo-Magné spoke about the sun rising after the global financial crisis that rocked so many countries. This year, it was high noon and time to begin feeling optimistic about the markets again.

In March, eleven first-year real estate MBA students from the Graaskamp Center accompanied Ortalo-Magné to Cannes, France to attend MIPIM, the largest real estate conference in Europe with over 18,000 attendees. This was the sixth consecutive year that the Graaskamp Center sent its students to this global gathering of real estate professionals and public sector leaders.

The students quickly immersed themselves in the many learning and networking opportunities at MIPIM. They attended each of the thirty-nine panel discussions and presentations that were held throughout the week to both contribute to the Wisconsin Viewpoint and MIPIM World blogs covering the event and administer the annual survey to MIPIM participants in order to gauge perception of today's markets.

"More than anything else, I was struck by how the event provided a personal touchpoint to events that I otherwise only read about in the media," said first-year MBA student Ben Schmidt. "For example, though it doesn't get the most attention in the US, it's no secret that Russia and Turkey have both experienced strong economies in the past few years. It was no coincidence then that those countries' exhibitions at MIPIM were among the grandest."

The strength of the investment markets in Russia and Turkey were topics of the first day of MIPIM, as well as China and Poland. The day led off, however, with London Mayor Boris Johnson's keynote address on his "City of Regeneration," including details about the upcoming 2012 Olympics.

Students enjoyed some unique opportunities, including the chance to attend the Mayor's Summit, a closed-door event where mayors and city leaders share their experiences, ideas and best practices related to sustainable urban strategy, and networking with industry leaders. Ortalo-Magné also arranged for small-group meetings with professionals from Real Capital Analytics, SEB Asset Management, Allianz Real Estate, the Bjarke Ingels Group, and others. These meetings gave the students the opportunity to learn about the firms' experience and strategy and to get the kind of insights you won't read in the press or hear on a conference panel.

"I learned a lot from talking with these high-level global real estate professionals," said Julia Xia, a first-year MBA student. "We also attended private events hosted by various real estate firms which helped us to expand our professional connections. Through these networking opportunities, I was fortunate to line up some interviews for potential internships."

Ortalo-Magné once again delivered the final wrap-up presentation (video + slides) with senior analyst Philippe Tannenbaum with IEIF (France). He noted that attendees left MIPIM 2011 feeling more optimistic than when they arrived. Breaking the data down along public/private sector lines, about a third of the private sector and over half of the public sector representatives said their experience at MIPIM had changed their outlook for the better. While Tannenbaum observed the key words for 2011 were "risk aversion," the survey results suggested MIPIM participants were ready to explore beyond the core or safe markets.

"I was struck by the optimism of the conference," said Schmidt. "The survey we conducted for Professor Ortalo-Magné certainly bore this out: investors and professionals have seen their business solidify in the past year, and they are excited to look for new opportunities in the coming year."

For detailed coverage of all the MIPIM sessions, read more on the Wisconsin Real Estate Viewpoint. For more news and events from the Graaskamp Center, sign up for our monthly newsletter (via Constant Contact). Read the April 2011 issue here.

Some Thoughts on Internship Seeking

2011-04-01T15:55:00.003-05:00

Some of our first-year real estate MBA students share their impressions and experiences in our blog series Meet Our Current Students:

The spring semester has passed the halfway mark, and we are now busy seeking an internship besides continuing to work hard for our classes. Here I want to share some thoughts on getting prepared for an internship and summarize the resources we have as MBA students in Graaskamp Center.

Get polished. A polished resume is an essential first step. Graaskamp Center Assistant Director Sharon McCabe is a good resource that we can use. She went through my resume, helped me reorganize it and stimulated me in bringing out the shining points of my work experience. My mentor (an alum of the real estate program) was also very helpful to give me some good suggestions from the perspective of practical world. What’s more, I also talked with my communication coach from the School of Business about how to write a good cover letter. All together students are well prepared for the document work.

Start early. From the first day I joined the school, we were taught networking skills, and I believe that we should practice those skills and keep them in mind to find a good internship. The MBA eRecruiting Center, an online job placement tool, often has internship opportunities, even as early as the first semester. We can also broaden our search to the websites of companies we are interested in. Some large financial institutions start recruiting summer intern early in fall, and their deadlines are often end of November or December. So I think it’s a good idea to keep tracking the targeting company’s website and find out any updates on internship opportunities.

Reach out. The Graaskamp Center has all kinds of events that offer good chances to get connections and to find an internship opportunity. Last year I got to know an alumni whose company is enlarging its business in China. The alumni forwarded my resume to the company, and the company showed strong interest. Although it turned out they hired someone full-time instead, my resume was kept for future consideration. It never hurts to reach out and ask whether there is any opportunity.

It’s not easy to find a good internship, especially for an international student like me. But I will keep trying. I’ve learned a lot and will be learning so many more things talking with different professionals in the industry. I wish everybody good luck in seeking an internship.

Julia Xia is a first-year MBA student in the James A. Graaskamp Center for Real Estate. Formerly a real estate consultant and asset manager in Beijing, Julia graduated from Peking University with a bachelor's degree in finance and banking.

McBurney Disability Resource Center dedicated at UW-Madison

2011-03-30T11:00:00.005-05:00

UW-Madison News announced yesterday that the McBurney Disability Resource Center, which advocates for and assists students, families and the UW-Madison campus community in navigating the academic challenges and practical concerns faced by people with disabilities, will dedicate its new space at 702 W. Johnson St. in a ceremony next Wednesday April 6.

Roberta "Bobbi" Cordano ('90 JD LAW), vice president of programs for the Amherst H. Wilder Foundation, and Greg Rice ('77 BBA BUS), CEO and managing partner of Executive Management Inc., will speak as part of the dedication ceremony.

Rice is a former student of James Graaskamp, whose lessons and high expectations guided him as project developer on the McBurney Center.

According to the announcement, the new location offers new opportunities and benefits including a conference room dedicated to Professor James Graaskamp, a legendary figure in the history of real estate education and research at UW-Madison and who promoted the creation of the Center and its dedication to Michael McBurney ('60 BA, '63 JD). The James Graaskamp Conference Room seats up to 20 guests and has enhanced audio/visual capabilities for accessible training and event hosting.

James Graaskamp, paralyzed as a result of polio as a teen, was a passionate teacher known for his devotion to students and intellectual oratory. Stephen Malpezzi, professor of real estate and urban land economics, relates in his paper "The Wisconsin Program in Real Estate and Urban Land Economics: A Century of Tradition and Innovation" that "while Graaskamp made few concessions to his medical problems in his personal and professional life, he was active in improving the quality of life for others facing such difficulties."

The James A. Graaskamp Center for Real Estate in the School of Business was dedicated in 2007. The Graaskamp Center's main goal has been to serve as a link between real estate faculty and students, alumni, the real estate professional community, governmental agencies and the general public, and to administer the Wisconsin MBA program in Real Estate. The Graaskamp Center was proud to share a portrait of Graaskamp, commissioned for the 2007 naming ceremony, to be displayed in the McBurney Center's new conference room.

"Ceremony to dedicate new McBurney Disability Resource Center at UW-Madison," UW-Madison News, March 29, 2011

Join us for the 2011 Global Real Estate Markets Conference in New York on May 2nd

2011-03-24T16:55:00.005-05:00

The Real Estate Program at the Wisconsin School of Business and Toll Brothers are proud to bring together top developers, investors, and service providers who are in the game and on the ground in emerging markets and beyond to discuss the keys to implementing a strong cross-border real estate investment strategy.

Event: 2011 Global Real Estate Markets Conference: Opportunities and Realities
Date: May 2, 2011
Time: 9:30 am-3:30 pm
Location: New York Stock Exchange

The agenda features keynote presentations from
Richard Cantor, Chief Risk Officer at Moody’s, and
Olivier Piani, Chairman and CEO of Allianz Real Estate.

Panel discussions on:

Real Estate Roaring? The View from Emerging Markets
Hear directly from the developers of real estate investment opportunities in emerging markets.

Foreign Capital Flows into the U.S. and U.S. Capital Goes Abroad
Learn from experience with panelists who are driving cross-border investments across multiple platforms.

Building a Global Real Estate Platform
Listen to the managers of global investment platforms and their service providers.

Registration is now open. Space is limited. For the full agenda and registration information, please visit the conference website at http://www.bus.wisc.edu/grem/conferences

Home-Price Outlook for the Year

2011-03-22T13:38:00.005-05:00

The Wall Street Journal today published the results of a survey of economists and housing analysts conducted earlier this month by MacroMarkets. Among those surveyed was Abdullah Yavas, professor of real estate and urban land economics at the Wisconsin School of Business.

The quarterly survey shows how attitudes for a housing recovery have soured: Last June, economists expected prices would gain by 1.3% this year. “The sentiment among our expert panel regarding the U.S. housing market outlook continues to deteriorate,” said Robert Shiller, the Yale University housing economist who co-founded MacroMarkets.

Around one-third of panelists expect home prices to increase in 2011. Bill Cheney, chief economist of John Hancock Financial, and Abdullah Yavas, and professor of real estate at the University of Wisconsin, are calling for a 3% annual gain.

"No Home-Price Recovery This Year," WSJ, 3/22/11

Final wrap-up from MIPIM 2011

2011-03-17T10:21:00.003-05:00

Professor François Ortalo-Magné, chair of the Department of Real Estate and Urban Land Economics at the Wisconsin School of Business, delivered a wrap-up keynote presentation at MIPIM last week with Philippe Tannenbaum, senior analyst at IEIF (France).

For more coverage from MIPIM 2011, keep reading the Viewpoint and visit MIPIM World.

MIPIM 2011 – Wrap-up keynote address

2011-03-11T09:06:00.005-06:00

MIPIM World, the official website featuring content from this year's MIPIM conference, posted video of today's keynote presentation by Prof. François Ortalo-Magné, Robert E. Wangard Chair in Real Estate at the Wisconsin School of Business, and Philippe Tannenbaum, Senior Advisor with IEIF France. Click to visit the MIPIM website and watch the video and view the slides from the presentation.

And please check out the rest of our coverage of MIPIM 2011 here on the Viewpoint and at MIPIM World.

Meaningful response to the global housing shortage

2011-03-10T19:25:00.002-06:00

Reporting from MIPIM 2011 Day 3: "Participating in a Meaningful Response to the Global Housing Shortage."

We hear quite a bit these days about the moribund recovery in the U.S. housing market. There is often talk of oversupply and lack of demand for houses on the market. Yet globally, there is immense demand for even the most basic of housing. Global Housing Foundation (GHF) is a U.N. partner working to fill this need for basic housing around the world. Today at MIPIM, GHF sponsored a panel of industry players who are currently developing in markets that are perhaps a bit beyond the eye of the average institutional investor.

The biggest challenges to addressing the need better housing around the world, however, are lack of capital and the unwillingness of large capital sources to get involved in the markets where need is greatest. Some of that is due to issues around getting clean title to land (which is a dealbreaker), but oftentimes it is a simple belief that projects won't be successful. But it can be done, by building communities not just houses. And even though residents are poor, creating product that improves their lives that gets residents investing for the future.

Our coverage of MIPIM wraps up tomorrow with the "wrap-up keynote" presentation by Prof. François Ortalo-Magné and Philippe Tannebaum with IEIF on Friday.

Target: Turkey

2011-03-10T19:21:00.001-06:00

Reporting from MIPIM 2011, Day 3:

Turkey, with the world's 15th largest economy and 17th largest population, occupies a position centrally-located not only at the door of the EU, but also between North Africa, Asia, and Eastern Europe. Turkey boasts strong banking sector and pre-crisis fiscal performance and is forecasted to be Europe’s largest population and the the world's 9th largest economy by 2050.

Turkey’s economic conditions are favorable. CPI is currently down to 4% and is continuing to fall. Its GDP is rising and should continue to rise. Average annual real GDP growth projections are the highest of all OECD countries despite an inflation rate six-plus percent. All of which make Turkey currently the 15th most attractive FDI location.

How to make resort hotels profitable?

2011-03-10T19:09:00.003-06:00

Reporting from MIPIM 2011: How to make resort hotels profitable?

Typically resort hotels require a higher investment per room than city hotels because of the expectations that come with resorts. For instance, resort hotels are expected to have larger rooms to accommodate for longer stays. Additionally, resorts are expected to provide a more vacation friendly setting. Resorts also require an increased investment in restaurants, spas and other amenities because of their remote locations.

One way in which hotel developers are working to increase profits is by developing resorts that are both vacation and business friendly. By accommodating business travelers and vacationers, resorts are able to increase their profits during the off-peak days of the year. In order to attract the business traveler, resort developers look to provide spaces that can function as both event and conference facilities. The transition to combine business amenities with resort amenities has seen success in some markets. However, it is important to note that this strategy can not be utilized in markets that have little business interaction in the surrounding areas. Golf, spa services, and the attraction of sporting events can also be key drivers of profits during the off-peak season.

Video via MIPIM World. For more, visit the official conference blog at blog.MIPIMWorld.com.

Emerging trends: signs of cautious optimism

2011-03-10T17:36:00.003-06:00

Reporting from MIPIM 2011, "Real Estate Roulette: Winners & Losers: Emerging Trends 2011"

Adapting to the European market, which is facing challenges in the sovereign debt crisis, regulations and a weak lending market, is a challenge in itself. More equity is expected to flow in 2011. However, the substantial undersupply of debt is expected to continue through 2011 and be worse than previous years, making refinancing more difficult. But still, after a very gloomy prognosis for 2009, 2010 showed signs of cautious optimism. Core investment will remain king. More concerns are about the transparency, regulations and the real economy growth from investors.

More coverage of the sessions at MIPIM on the Viewpoint.

So where will investment take place in the U.S. in 2011?

2011-03-10T15:15:00.003-06:00

Reporting from MIPIM Day 3:

After watching the U.S. property markets collapse following the financial crisis and negative returns continue into 2010, optimism was surprisingly high in the panel "US Property Markets: Where are the Opportunities?" NAREIM President Stephen Renna led the panel of investment managers to try to answer to the question Where will investment take place in 2011?

The short answer was multifamily properties in core markets. These markets, including Washington DC, New York City, Boston, Los Angeles, San Diego and the Bay Area of California, all command premium rents, have strong employment growth, and high populations of the younger demographic with a higher propensity to rent.

Read the rest of our coverage of the sessions at MIPIM on the Viewpoint. Visit our partner the official MIPIM World blog for video and other exclusive content from Wisconsin.

Distressed or distressing investments? MIPIM 2011

2011-03-10T15:11:00.001-06:00

Reporting from MIPIM 2011:

Distressed or distressing is the question in investing these days. However, the market's worst fears of massive default did not come true. And the bulk of distressed assets have appreciated enough during the recovery of the last twelve months to remove themselves from the distressed category before any workouts were required. The optimistic view is that the worst is over.

But while things appear better to those in the know, the public at large still does not know where many banks' balance sheets stand. Further, it is very possible that there are more faltering property owners who are trying to keep their status under wraps. The lack of transparency is an impediment in determining whether we are truly in the clear yet.

Roubini on the recovery: the glass is half full AND half empty

2011-03-10T14:38:00.004-06:00

The outlook on the global economic recovery is mixed, best described as a glass half full and half empty, at the same time, says Dr. Nouriel Roubini is his keynote address on Thursday at MIPIM.

Here are the pluses, the strong and important factors driving optimism today: Not only have we seen positive growth but accelerated positive growth in the last few months. Risks of default in euro zone and double-dip recession are decreasing. The balance sheets of high-grade companies in the US and Western Europe are strong.

But there are minuses, too, macro uncertainties driving pessimism: mid-east turmoil and its effects on oil prices; problems from public debt and foreign liabilities in the private sector; and significant problems in the U.S. including high unemployment and modest job growth, risk of a double dip in the housing sector, and significant deficits at the state and local levels.

After this and three days of meeting and greeting and listening and learning, how are you feeling about the global recovery? Is your glass half-full or half-empty?

Our coverage of the rest of Thursday's sessions at MIPIM will continue. Plus we'll have the wrap-up keynote presentation by Prof. François Ortalo-Magné on Friday.

Healthcare sector is healthy

2011-03-10T14:09:00.002-06:00

Reporting from MIPIM 2011:

Even during the economic recovery, healthcare is one sector that continues to grow. Currently 10% of worldwide GDP, second only to housing, it attracts investors with aging demographics, long lease terms with owner-operators, and high cash returns. Investments in the sector have been equated to government bonds because governments in Europe pay the bulk of health care bills. However, this could represent a major concern as debt levels and budget deficits rise around the world, health care spending may be put, at least in part, to the wayside.

Building a standard for measuring sustainability

2011-03-10T13:53:00.003-06:00

Reporting from MIPIM, "Common causes, common measures:"

Countries around the world have varying standards for measuring sustainability, from LEED in the United States to BREEAM in Europe. Further, governments are instituting laws designed to force investors and developers into incorporating energy saving measures. Forces which are combining to demonstrate the clear need for a common standard of "sustainability" for commercial properties. The lack of coordination in the industry across the world is greatly reducing transparency; it is nearly impossible to compile statistics for energy savings achieved across the world due the implementation of these programs because the standards vary so widely.

Photo courtesy of Reed Midem.

Rocky and rolling recovery at MIPIM 2011

2011-03-10T08:55:00.003-06:00

Reporting from MIPIM 2011 Day 2:

Recovery from the global financial crisis took hold in early March 2009, when US central bank told the world that they will make sure the financial market would not crash, said economists on Wednesday's keynote panel on economics and the road map to the future.

Interest rates are as low as the can go, and inflation also quite low, meaning that real rates are very low. The natural course of events is a very strong economic upswing that will grow in strength over time (though not stronger than 2010). But increases in interest rates and oil prices are needed in order to slow down the now rapid economic expansion in the westerns world.

Real estate will benefit from the recovery because real estate is generally highly correlated to the broader economy. But real estate investors are still nervous. Real estate was an attractive asset class in the years leading up to the crash, and it still is really, notwithstanding the full impact of Solvency II which remains to be seen.

The sleeping tiger is massive government debt that will have to be addressed with higher taxes and lower spending which have a particularly negative affect on the recovery, already on a "rocky road."

We'll have more from Day 3 at MIPIM a little later today here on the Viewpoint and on Twitter @UW_GraaskampCtr.

Stay connected with the Wisconsin Real Estate Program, long after MIPIM, by connecting with us on Facebook.

Icons are made not built, at MIPIM 2011

2011-03-09T22:25:00.004-06:00

More from MIPIM 2011 Day 2:

Real estate developers and architects may not always be the happiest of bedfellows, but the architects' keynote panel at MIPIM is always a highlight, providing a jolt of starpower.

This year's focus was on "Iconic Architecture for the 21st Century." Icons exist, but they are not built--and shouldn’t be designed with the idea of being an icon in mind. Icons are created over time. And icons are needed to create connections between people on a fundamental, emotional level. If a building can connect with people, than people can create stories about that city, place, and time. So it is people who create icons, not architects. But an architect who is open to the needs of a space for interactivity can create possibilities, the places where people can connect with one another. Ultimately it is the people who come to "own" these spaces.

Ancient architecture are easy iconic examples, but what about modern icons? What contemporary spaces do you think have reached iconic status? Share your examples in the comments below.

And check out the rest of our coverage from MIPIM on the Wisconsin Real Estate Viewpoint and the official MIPIM World blog for video and other exclusive content.

How to invest in Latin America

2011-03-09T22:18:00.001-06:00

Reporting from MIPIM 2011 Day 2:

Latin America's strong historical growth has long attracted investors. But its favorable climate has been the real fuel for growth through tourism in resort areas such as Acapulco, Panama City, and Punta del Este. For investors interested in sustainability, Latin America, while sometimes "idiosyncratic," is making great strides forward. Efficiency is gaining a great deal of momentum and countries are looking at innovative ways to mix buildings and nature.

Innovating to regeneration in the UK

2011-03-09T21:56:00.004-06:00

Reporting from MIPIM 2011 Day 2:

Following on yesterday's keynote address by London Mayor Boris Johnson, a panel of UK government leaders gathered at MIPIM today to further discuss regeneration efforts in the UK. With the austerity programs recently implemented by the UK government, regeneration efforts in the UK have shifted to the public-private/LEP model. Cities are refocusing their attention on economic matters and seeking business leaders to show the way. It's no small matter, either: with economies in excess of $50 billion annually, each of the panelists' cities are larger than some European countries. Interestingly, city leaders are not limiting their efforts to help from the UK government alone, looking to foreign investment partners. Their successes may become a model for other UK cities.

Video via MIPIM World. For more, visit the official conference blog at blog.MIPIMWorld.com.

Density & the city

2011-03-09T21:39:00.004-06:00

Reporting from MIPIM 2011:

What does density mean for a city--"for better or for worse"? Density itself, or the lack of it, can have an impact. The global population shift from suburban to urban centers means suburban populations are shrinking. Some German cities, for example, have lost 30 percent of their population in two decades. The effects of this shrinkage on the real estate market include high vacancy rates combined with severe drops in value. To address the problems, German suburbs investing in infrastructure, revitalization techniques and even demolishing vacant units. Going forward it will be important to take into account this relocation, the resiliency of plans and the sustainability of projects when considering how to plan for the density within a city.

Our coverage of the sessions at MIPIM continues tomorrow, so bookmark the Wisconsin Real Estate Viewpoint and follow us on Twitter @UW_GraaskampCtr. And be sure to visit MIPIM World blog for video and other exclusive content.

Brazil: open for business at MIPIM 2011

2011-03-09T21:00:00.004-06:00

Reporting from MIPIM 2011:

São Paulo Mayor Gilberto Kassab delivered some of the city's impressive numbers in his keynote address :

4th largest city in the world,
11.5 million inhabitants,
12,500 restaurants,
7.5 million automobiles, and
450 helicopters.

Urban living is not only a necessity but also provides an impetus for the development of humanity, with urban citizens demanding better conditions, better education and improved care at all stages of life. Sao Paulo says it's ready to step up, drawing on the diversity of its communities including the biggest congregations of Lebanese, Italians, and Japaneses outside their home countries.

Sao Paulo is setting the stage for international investment, infrastructure and redevelopment in 2011 with "a one-hundred percent" commitment to best practices in transparency and accountability.

More news on the country came at the Investment Lab panel "Brazil: the present and future of investments." Historically, Brazil has respected all types of international capital flow through very strict laws guaranteeing repatriation of capital. The real estate market, employing more than 4.5 million people, represents 19% of total GDP and grew 11.6% last year. One of the biggest issues Brazil faces is its housing deficit; at 6 million units; one of the highest worldwide. The government is playing a big role in developing new projects over the next decade.

Ultimately Brazil looks to building a lasting legacy from the major events--the 2014 FIFA World Cup, the 2016 Summer Olympics, and perhaps even the 2020 World Fair.

MIPIM 2011: Making green buildings pay

2011-03-09T20:51:00.003-06:00

Reporting from MIPIM 2011:

Green building continues to be a hot topic. And as interest has continued even thru the economic crisis, it would appear the "trend" may be moving into the mainstream. Wednesday's session "Making Green Buildings Pay" addressed sustainability for occupiers.

Operating costs, over a building's life cycle, are approximately 80% of a building's aggregate cost. Developers cannot control interest rates or the price of energy, etc. but can impact energy consumption (running costs).

Tenants, as the drivers of space design, need to see and understand the real economic value, the cost savings, that justify green building investment and share in those benefits from investing in green buildings--one benefit being a positive public image.

Wisconsin MBA students in real estate are reporting from MIPIM. Continue to check this blog for more updates and visit MIPIMworld.

U.S. real estate rebound? MIPIM 2011

2011-03-09T16:35:00.004-06:00

Reporting from MIPIM 2011 Day 2:

In a recent survey of foreign property investors, the U.S. ranked some 50 percentage points higher than its closest competition in providing the greatest opportunities for capital appreciation and 20 points higher offering the most stable and secure property investments in the world.

The robust property markets in New York and Washington are considered signs of recovery of the real estate market. However, data from CRE showed that the vacancy rates for office, retail and multi-family are still at historic highs. Multi-family rents have started to improve while rents for most other commercial properties still soft. There was a nice spike in the real estate transaction at the end of year 2010, but the market is still weak in terms of price and volume. Property prices in New York and Washington were driven up by risk-averse capital investment in trophy properties, and the prices for most other properties are unchanged. Distressed assets continued to be drag for the market. The retail sector offers some opportunities with more bankruptcies and consolidations still to go. Unemployment and political factors represent macro risks for the real estate market.

Secondary markets in the U.S. are considered the next targets with huge potential and opportunities.

This is a topic of particular relevance to the Graaskamp Center and Prof. François Ortalo-Magné who leads an annual survey of the members of AFIRE, the Association of Foreign Investors in Real Estate. The survey, results of which were released in January, revealed that the U.S. real estate market offers a stronger investment opportunity for foreign real estate investors’ money than it has in the last 10 years. Interestingly, there is typically a fairly even distribution of votes among the top U.S. cities for foreign investment. However, in this year’s survey, New York and Washington scored almost four times higher than third place Boston. Click here to read the full story and the detailed survey results.

MIPIM 2011: Understanding what sovereign wealth funds are looking for

2011-03-09T16:18:00.004-06:00

Reporting from MIPIM 2011 Day 2:

Sovereign wealth funds, or investment vehicles created from a country's reserves with the purpose of benefiting future generations, invest across many asset classes including real estate. Traditionally, these funds invest in prime office buildings in "prime" cities like London, New York, and Tokyo, with an interest in their home markets as well. As sovereign wealth funds continue to look for properties with strong fundamentals, there has been an increasing trend to focus on other investment vehicles, property types, and geographies.

Wednesday's panel "Capital Requirements: Understanding What Sovereign Wealth Funds Are Looking For When Investing in Property" highlighted recent investments in hotels and residential complexes, emphasizing that they added diversification to the portfolio. Emerging economies are the targets of increasing interest, particularly markets like Rio de Janeiro, Taipei, and Seoul. A trend that should continue as the changing economies of the world create new definitions of developed and emerging markets.

Despite strong portfolio returns and acquisitions of high-profile properties around the world, transparency concerns exist. Transparency is also something that has different meanings around the world.

German investors on finding the "right" risks at MIPIM 2011

2011-03-09T16:04:00.006-06:00

Reporting from MIPIM 2011:

According to the German real estate investors on Tuesday’s panel session “Between Shock and Profit: the Global Perspectives of German Investors” at MIPIM, changing how assets are valued as well as how risk is managed are the keys to rebounding from the recession. Rather than simple short-term profit maximization, a return to a long-term view of asset management is needed, as well as a focus on correctly calculating risk, especially in open-ended funds which are currently facing redemption issues. In the meantime, the “flight to quality” continues. Portfolios today (and lenders) can accommodate some risk, but the type and allocation of risk has to be just right.

Our coverage of MIPIM continues here and follow us @UW_GraaskampCtr on Twitter.

Video via MIPIM World. For more, visit the official conference blog at blog.MIPIMWorld.com.

Diversifying in Asia: MIPIM 2011

2011-03-09T13:16:00.004-06:00

Inter-regional capital flows have recovered in the Asia Pacific area said a panel of investors and researchers on the Tuesday MIPIM panel "Asian Capital: regional plans, global ambitions." After the downturn in 2008 and 2009, transaction volume in the real estate market has seen an upturn in the year 2010.

Corporate pension funds have invested heavily in the real estate sector while the government invested pension, which is one of the largest pension funds in the world, is pretty conservative in the market. Compared with Japan, Korean institutional investors are very active both in the domestic market and the global market. Diversifying their portfolio beyond their home markets is a priority; they have invested in mature markets such as London, Frankfurt and Paris.

Weighing risk and reward in China at MIPIM 2011

2011-03-08T19:35:00.004-06:00

China was the topic of one of the first panels of the day at MIPIM 2011, in a session looking at "Risk Versus Reward" in the country. Wisconsin real estate MBA students report on the discussion:

China’s strong economic growth, especially its sound performance during the global economic downturn, is driving more and more foreign investors to seek opportunities in China’s real estate market. A report from DTZ proves the point, showing that the proportion of foreign investors increased to 61% in 2010 from 29% in 2009.

However, there are risks in China’s market, including the uncertainty of government policies, a lack of high quality income properties, and the potential for competition from China’s own financial institutions which will become more important players as they explore increased economic freedom.

In addition to recognized opportunities in Tier 1 cities, the MIPIM panel opened a new window to second-tier city Chongqing, one of China’s fastest growing cities. Location, infrastructure, a solid industrial foundation, strong growth in science and technology are some of the elements creating a market with huge potential investment opportunities.

The Wisconsin School of Business is proud to partner with MIPIM World to bring you updates and developments from the show. For more coverage check in with us on www.wisconsinviewpoint.blogspot.com or follow us @UW_GraaskampCtr on Twitter.

MIPIM 2011: New Europe: not east or west but north and south

2011-03-08T19:03:00.005-06:00

Wisconsin MBA students in real estate attended today's major panel sessions at MIPIM. The major story from the one of the last of Tuesday's sessions: "Central Europe: Not Too Hot, Not Too Cold?" was the strength of the investment environment in Poland:

Europe is no longer classified as East and West, but rather North and South. And Northern Europe is emerging with an attractive investment environment.

Poland--specifically Warsaw--has seen a lot of activity, particularly large infrastructure improvements being built for Euro 2012 (the 2012 UEFA European Football Championship). Plus favorable cap rates, interest rates, and afforable debt in Warsaw have created a friendly real estate environment. Poland has earned a spot on the target country list for large institutional real estate investors.

Our coverage of the sessions at MIPIM continues tomorrow, so bookmark the Wisconsin Real Estate Viewpoint. And be sure to visit MIPIM World blog for video and other exclusive content.

Are foreign investors ready to return to Russia? Reporting from MIPIM 2011

2011-03-08T18:18:00.004-06:00

Continuing our coverage from Tuesday's sessions at MIPIM 2011, this time with the outlook on investment in Russia:

Before the recession, foreign funds flowed into Russia into all types of investments in all regions of the country. However, once the downturn began, foreign capital slowed to a standstill. A phenomenon not unique to Russia, this was true throughout Europe with capital “returning to its base.” The struggle now is convincing investors to once again consider Russia.

Regions throughout Russia are actively trying to attract investors. Local governments have made improvements in areas ranging from infrastructure to simplifying the zoning approval process.

And some foreign investors are beginning to return to investments in Russia, sharing a belief and a history of investing in Russia. Such knowledge of the market and of the investment process in Russia is a competitive advantage which gives them an edge in completing transactions now.

Market conditions in Russia are improved today over what they were two years ago, making it seem like a more prudent investment target, but questions remain that will likely keep larger players on the sidelines for now.

For more coverage from the day's sessions, bookmark the Wisconsin Real Estate Viewpoint and visit MIPIM World.

MIPIM 2011: Balancing risk, regulation and recovery

2011-03-08T15:11:00.008-06:00

Wisconsin Real Estate reporting from MIPIM 2011--on the afternoon session "Toward a Better Investment Marketplace: Reporting, Regulation and Risk" led by IPD (UK) Chairman Rupert Nabarro, addressing one of the official themes of this year's conference Finance: Beyond the Credit Crisis:

Much has been discussed about the role that lax regulation and excessive risk-taking played in the financial crisis of 2008. Today at MIPIM, a distinguished panel of experts continued that discussion with respect to the role of regulation and risk avoidance in the real estate marketplace.

While greater transparency is important, could new regulation hurt a fragile recovery? There was no doubt that new Basel 3 capital requirements and Solvency II regulations will have significant impact on real estate investment. Further complicating matters is overlapping and conflicting EU-level and country-level regulations.

The likelihood exists for markets to overheat again and mistakes to be repeated, but it would seem unlikely for the unique circumstances of 2008 to resurface, with or without new regulation.

Video via MIPIM World. For more coverage from the day's sessions, bookmark our blog and visit MIPIM World.

Putting the village back in the city: first sessions at MIPIM 2011

2011-03-08T14:51:00.012-06:00

The Wisconsin Real Estate Program is in Cannes, France at MIPIM this week. Our delegation of real estate MBA students and faculty is reporting the news from the program sessions here on the Viewpoint blog.

The first report we've received is from Mayor of London Boris Johnson's keynote:

Addressing a packed auditorium today to deliver the keynote address, entitled "London: City of Regeneration," London Mayor Boris Johnson began by highlighting the city's recent successes--notably the 2012 Olympics--as well as the developments in Stratford City and the London Bridge Quarter. Other city improvement projects (on full display in the London tent outside the Palais) included the redevelopment of the Royal Docks and the introduction of a cable car spanning the Thames. Mayor Johnson made it a priority to highlight London's forward-looking strategy by discussing the city's "greening" and bike-share programs. He stressed the importance of being a "trusting" city where citizens are not subjected to high theft or crime. This idea goes hand in hand with the mayor's goal to "put the village back in the city," creating a greater sense of community while focusing on longevity of life and stronger education. "The city is the single greatest invention of our society," he noted, making sure attendees at this year's MIPIM understood the legacy that they are part.

The Wisconsin School of Business is proud to partner with MIPIM World to bring you updates and developments from the show.

We'll have more on today's sessions on www.wisconsinviewpoint.blogspot.com.

Video via MIPIM World. For more coverage from the day's sessions, bookmark our blog and visit MIPIM World.

Reporting from MIPIM 2011

2011-03-07T16:19:00.001-06:00

Over the weekend a delegation of students and faculty from the Wisconsin School of Business Real Estate Program arrived in Cannes, ready and eager to attend the international property conference MIPIM.

The Wisconsin Real Estate Program has a long history at MIPIM. This is the students' sixth annual trip to the event, participation is actually part of the MBA curriculum. The faculty chairman François Ortalo-Magné has delivered the wrap-up keynote several times at MIPIM--and at MIPIM Asia and MAPIC as well. He is on the 2011 schedule on Friday morning at 10:00 (local time).

As in years past, we will be blogging from the event. Students will be reporting key takeaways from the main sessions and keynotes on the program. We will also be working with the conference organizers on their new blog.

So come back to the blog for in-depth coverage of MIPIM 2011!

And in preparation for tomorrow's conference kick-off, take a look at our coverage from previous shows. How do you think the mood and outlook will be different this year?

Fostering collaboration

2011-03-07T11:16:00.010-06:00

On March 4th and 5th, Wisconsin Real Estate faculty members Stephen Malpezzi, Tim Riddiough, Morris A. Davis and Erwan Quintin attended the fifth installment of the UW-Fed Housing-Urban-Labor-Macro (HULM) conference at the Federal Reserve Bank of Atlanta.

The conference, a bi-annual event founded three years ago by Morris Davis, brings together individuals who are pushing the frontier in all aspects of real estate research. The first part of the conference focused on the causes and consequences of the recent subprime crisis and on the effects of various policy responses to the crisis. The second part of the conference dealt with cycles in the market for land and structures. Details and papers are here.

A unique aspect of this increasingly successful 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. The latter include not only Federal Reserve economists but also researchers from Government Sponsored Agencies. One of the highlights of this year’s event was an intense debate over the merits of loan modification policies motivated by a unique study of Countrywide’s court-imposed modification program.

The next installment of the conference will take place at the Federal Reserve Bank of Chicago in September.

Photo by Lance McCord via Flickr

Join us for an online chat on the Wisconsin Real Estate MBA Friday at 1:00!

2011-03-03T15:34:00.004-06:00

Are you looking to take the next step in your real estate career? Are you interested in earning your MBA in real estate?

Assistant Director Sharon McCabe will be online answering your questions on

Friday, March 4th 2011
1:00pm
Register here.

This one-hour session is for anyone who would like to learn more about Wisconsin's top ranked real estate MBA program. Sharon, a member of the real estate faculty and a practitioner in appraisal and consulting, is able to answer your questions about:

Wisconsin's unique MBA career specialization model which includes real estate,
The breadth and depth of the program's curriculum in real estate,
Admissions and qualifications, and also
Careers in real estate.

Please sign up now for this online session and join us tomorrow or feel free to contact us directly with questions.

Wisconsin full-time MBA Polar Plunge team sets record

2011-03-02T09:00:00.001-06:00

Congratulations to all the Wisconsin MBA students (including real estate!) who participated in this year's Polar Plunge fundraiser for Special Olympics Wisconsin.

According to the Wisconsin School of Business Gazette:

The team consisted of 69 participants who raised $19,012—a record high for them. The team raised the third-highest amount in Dane County.

Click over to the Gazette for photos and video highlights!

Getting ready for MIPIM

2011-03-01T11:06:00.006-06:00

First-year Wisconsin Real Estate MBA students will travel to Cannes, France next week to attend MIPIM. To prepare for one of the most anticipated international real estate events of the year, our students have been doing research and hearing from leading professionals in the industry on how to get the most out of the trip. In this entry in our series Meet Our Current Students, Julia Xia shares her preparations:

It’s only one week away from MIPIM - the world's premier real estate event. All of the first-year Wisconsin Real Estate MBA students are going, and we are busy getting prepared for this important event. One bit of homework that we’ve done is research current hot topics in global real estate, and then present the research to our classmates and share our findings. These topics include, but are not limited to, China’s real estate capital, the emerging real estate market in Middle East, open-ended and close-ended funds in Germany, and sovereign wealth funds.

One particularly interesting topic is the real estate capital flows from China to Europe and the U.S. (The Many Ways Chinese Capital Is Entering US Property Markets, WSJ.com (subscription), 10/12/10) Chinese capital has been very active and powerful in the global real estate market in recent years. (Chinese Investors, Lenders, Quietly Penetrate Foreign Markets, Investment & Pension Funds Europe (login required), 12/7/10) The major sources of capital are the government (sovereign wealth funds like China Investment Corp.), institutional investors and wealthy individuals. For example, $62.6 billion of Chinese investment occurred in U.S. commercial real estate during 2010. The forms of investment include equity investment, debt investment, buying property, buying real estate financial products such as loan portfolios and direct real estate development. The large amount of foreign currency reserves, the domestic inflation pressure and the appreciation potential of RMB are the major forces driving Chinese capital to invest in the global real estate market. Recently, the policy loosening capital exchange restrictions will bring more Chinese capital to the global real estate market.

Another topic I found very interesting is the real estate market in the Middle East. The region can be categorized into three types of markets: stable and more open markets such as Turkey, UAE and Qatar; markets in revolution and conflict such as Tunisia, Egypt and Libya; and government-controlled investment markets such as Saudi Arabia and Iran. Out of these markets, Turkey seems to be the most emerging and booming real estate market. Istanbul ranked as the number 1 city for economic growth in 2010. (Istanbul Favorite European City for Property, Bloomberg, 2/3/11) The economy and the employment rate increased 5.5% and 7.3% respectively in 2010, making it an attractive market for global real estate investment.

MIPIM will be great, just to get connected with the most influential real estate professionals. We are trying our best to get ready to learn, to share and to connect at the event. Hope to see you there!

Julia Xia is a first-year MBA student in the James A. Graaskamp Center for Real Estate. Formerly a real estate consultant and asset manager in Beijing, Julia graduated from Peking University with a bachelor's degree in finance and banking.

The Wisconsin Real Estate Viewpoint will be reporting from MIPIM next week! Check back for updates and key takeaways from all the sessions! You can also follow us on Twitter @UW_GraaskampCtr and on Facebook.

Also, be sure to stick around for the wrap-up keynote presentation at MIPIM on Friday March 11 at 10:00 am (local time). Prof. François Ortalo-Magné, Robert E. Wangard Chair in Real Estate, and Philippe Tannebaum, IEIF, will deliver an overview on Real Estate Investment Post-Crisis: What Have We Learned? What Next?

Women in Real Estate

2011-02-24T09:20:00.000-06:00

Meet Our Current Students, a continuing series featuring some of our first-year real estate MBA students:

It seems there are more men than women working for the real estate industry. How do women survive under the complex and competitive environment and make some self-achievement? I’ve worked for this industry for seven years before I came to business school for an MBA in real estate, and it had been a question bothering me for a long time. However, with the help and communication of the alumni and the faculty of Graaskamp Center, it seems not so difficult to find an answer.

Last semester, in connection with the Wisconsin Real Estate Biennial Conference, alumni Jill Hatton held a special welcome reception for women in real estate. Jill has worked in various leadership positions in the real estate investment advisory business and is a board member at the University of Wisconsin Foundation. It was the first time I had attended a meeting with so many women in real estate. I talked with several women alumni, and they shared with me their stories of life, career and family. Many of them have a very balanced life, enjoying the career success and family life. The meeting with them led me to redefine success for women in real estate. That is to keep a balance for work and life.

Meeting with alumni Pam Boneham helped me learn more about women in leadership in the real estate industry. Pam is the Managing Director and Portfolio Manager for RREEF Real Estate Investment Management. She shared with us her career development at RREEF. She said there might be more difficulties for women to stand out and take lead. However, women had their own advantages in career advancement. Women are more willing to listen, which puts them at an easier position for communication and get more information. The most important thing is always being confident and sticking to your dream.

I’ve learned a lot and understood more about the industry in the past six months, although I am still looking for the perfect answer. Learning in the business school is helping me to be prepared for the real estate dreams.

Julia Xia is a first-year MBA student in the James A. Graaskamp Center for Real Estate. Formerly a real estate consultant and asset manager in Beijing, Julia graduated from Peking University with a bachelor's degree in finance and banking.

Scholarship season

2011-02-23T20:32:00.001-06:00

It's scholarship season for current students in the Wisconsin School of Business, and Wisconsin Real Estate will make several awards this spring.

Thanks to the generous support of alumni and friends of the Wisconsin Real Estate tradition, we have a number of fellowships and scholarships available to MBA and undergraduate students in real estate. The Department and the Graaskamp Center are proud to distribute a number of scholarship awards to real estate students every year.

Current students should apply before the deadline on March 1, 2011.

Other scholarships and grants are available from the Wisconsin School of Business. A single application enables you to be considered for a wide variety of scholarships for business students. A great resources for students is the university's Scholarships @ UW-Madison website.

Real Estate Research Spans Our Campus

2011-02-23T14:13:00.005-06:00

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

One of the defining characteristics of the University of Wisconsin is the breadth of scholarship and teaching across the campus. For example, we teach more foreign languages (more than 80!) than any other university in the world. In previous posts, we talked about the new Discovery Institutes, a public-private partnership that brings together researchers from across campus to work on a range of problems such as epigenetics (how genes are activated or inactivated), tissue engineering (using artificial structures called “scaffolds” to grow cells into substitutes for biological material – maybe that piece of my knee I lost in a long-ago basketball game), improvements in therapeutic technologies, the application of recent advances in the mathematics of optimization to biology and medicine, and a broad look at the “systems level” of biological organisms.

The Graaskamp Center and its associated faculty are in the thick of intellectual ferment in our field, both inside and outside the University. Within UW, our faculty have their academic homes in the Wisconsin School of Business, but our faculty also have formal affiliations with other UW organizations, including Economics, Urban and Regional Planning, the Institute for Research on Poverty, World Affairs and the Global Economy (WAGE), and the Law School, to name a few. In turn, selected faculty from these and other units serve as Faculty Fellows of the Graaskamp Center. Among their many contributions, these colleagues often speak at our events such as the twice-annual meetings of our Board of Advisors and the Wisconsin Real Estate and Economic Outlook Conference.

We’re very fortunate that we can also leverage off each other’s research. Some years ago, Richard Green (then on our faculty) and Michelle White wrote an influential paper “Measuring the Benefits of Homeownership: Effects on Children,” that kicked off a renewed interest among housing economists in the connections between housing markets and social outcomes. More recently, housing economists in the Graaskamp Center have been focused on the connections between unemployment and the economic well-being of families, and our recent problems in the housing market, for example the development of the Wisconsin Foreclosure and Unemployment Relief Plan (WI-FUR).

Thus, we’re very pleased to see a new Wisconsin research initiative on the connections between housing and the long-term health and well-being of children, families and communities from our colleagues at the Institute for Research on Poverty:

FOUNDATION FUNDS HOUSING RESEARCH OF THREE UW-MADISON FACULTY MEMBERS

Three researchers with the Institute for Research on Poverty at the University of Wisconsin-Madison Timothy Smeeding, Lawrence Berger and J. Michael Collins, have received support from the John D. and Catherine T. MacArthur Foundation to explore the role housing plays in the long-term health and well-being of children, families and communities.

Their main thesis is that income benefit policies are also housing stability policies that help families maintain payments for mortgages and rent and therefore avoid forced housing changes. The goal of their research is to identify the most effective policies for avoiding the negative impacts of housing changes on family well-being.

We’re looking forward to learning from this research as it comes online. Read the full press release from UW-Madison News.

Round 3 MBA application deadline is March 15th

2011-02-22T11:56:00.002-06:00

The Wisconsin Real Estate MBA program is accepting applications for the fall 2011 intake. The third round application deadline is March 15, 2011.

If you'd like to learn more about our program, start at our MBA website, then register online here to be added to our mailing list.

And join us on Friday March 4th at 1:00 pm CT for an online chat!

Faculty Associate and Assistant Director for Recruiting Sharon McCabe will share an overview of the program and answer your questions.

Check back for a link to the chat soon!

Chicago alumni happy hour

2011-02-18T15:03:00.003-06:00

Please join Wisconsin Business Alumni for the annual Chicago Alumni Happy Hour. Network with fellow Business School alumni and cheer on the Badger men's basketball team as they take on the Indiana Hoosiers (game time is 8:00 pm).

Thursday, March 3
7:30 pm
Will's Northwoods Inn
3030 N Racine, Chicago

Thanks to our generous hosts (including a couple of real estate alums), this event is FREE, but registration is required. Click here to register.

A not-so polar plunge for charity

2011-02-18T13:20:00.005-06:00

On Saturday, real estate MBA students, along with other Wisconsin MBAs, students, faculty, staff and more, will take "the plunge" into frozen Lake Monona to benefit the Special Olympics of Wisconsin. Temperatures have been unseasonably mild in southern Wisconsin, but it will still be a jump of bravery.

If you'd like to support our students and a great cause, you can pledge here.