Gary Beban of CBRE Accepts Innovator Award

In front of a capacity crowd at the UW-Madison Pyle Center, CBRE Executive Gary Beban received the Wisconsin Real Estate Program’s Innovator Award on Thursday, September 27, jointly awarded by the UW Real Estate Club and the James A. Graaskamp Center for Real Estate. The award was presented by Michael Brennan, Executive Director for the Graaskamp Center, and aims to celebrate the innovative achievements of key individuals within the real estate industry.

Gary began his presentation titled “Supporting Innovation” by tracing the trajectory of the company, which is now known as CBRE,  from 1971, his first year with the company, through the current year. Drawing on his experience as a history major during his days at UCLA, Gary brought a holistic approach to real estate throughout his career, noting that in order to be most effective, one must "understand your vertical". Put differently, you should know where your industry and company have been and where it currently is in order to create an innovative strategy for future growth. 

This strategic framework guided Gary, especially when he was named President in 1987, in his pursuit of repositioning the brokerage firm into a global, vertically integrated leader within the commercial real estate sector. Gary achieved this by understanding and capitalizing on two critical changes that would hit the industry: 1) the global circulation of capital; and 2) global corporate real estate services. With strategic acquisitions around the globe that linked CBRE offices across time zones, Gary established a formidable network through which CBRE employees were producing at every hour of every day, a far cry from a company with one office in San Francisco back in 1906. Furthermore, these acquisitions pushed the brokerage's vertical integration to new levels, as evidenced by the acquisition of Insignia that provided CBRE the industry's largest proprietary market research arm.

As was appropriate considering the student-focused setting, Gary provided a strategic industry look-ahead providing a look into CBRE’s Workplace Strategy. The basis of this strategy is acknowledgement of the original dynamics of developer, investor, user, and capital, synthesized with the more recent trends of advanced technology and telecommunications. Simply put, firms now view reducing costs inherent with occupying space as strategic strategies in their long-term planning. CBRE fits this within their vision by assuming increasingly mobile teams and occupancy square foot per employee from 350 to 50 to better serve their client base.

His closing remarks included words of wisdom for the attending students: stay current with global developments, and hone your financial skills and vertical knowledge. These certainly have proved fruitful for Gary throughout his impressive career at CBRE. The Wisconsin Real Estate Program was proud to welcome Gary to our UW-Madison campus!

Jonathan Brown comes to Madison from Washington, DC, where he managed downtown Class A office buildings for Tishman Speyer. Jonathan plans to leverage his prior experience with financial and analytic tools gained during the MBA program to develop and invest in urban commercial properties.

Innovator award recipient Michael Ashner shares career insights with students

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


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

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

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

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

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

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

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

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

Hersch Klaff Receives the Real Estate Club Innovator Series Award

Today we have another entry in our Meet Our Current Students Series:

At the Real Estate Club’s first spring semester meeting on Thursday, January 28, Michael Brennan, executive director of the Graaskamp Center, presented the Innovator Award to Hersch Klaff, managing director of Klaff Realty, a Chicago-based privately owned real estate investment company. Mr. Klaff is the fourth recipient of the award which was established to recognize outstanding individuals who have made a creative mark on the real estate industry.

Klaff moved to the United States from South Africa in 1978 to begin a career in accounting. After learning about the real estate industry from his clients, he left accounting and pursued his real estate broker’s license in Illinois. Klaff Realty was started in 1982. He closed his first deal, the $12 million acquisition of a former Marshall Field's building, after reading about the owner’s desire to sell in a newspaper, camping out at their office for three days waiting for a meeting and convincing them to give him a few days to find buyers. The deal closed in one month.

The focus of his speech was the constant search for new ideas and opportunities. Klaff began the first part of his real estate investment career acquiring large corporate assets in the Chicago Loop and repositioning them into multi-tenant buildings. After the real estate crash in the early 1990s, he saw an opportunity to buy distressed assets in suburban Chicago from banks that were eager to sell. While the locations of these assets were outside of his comfort zone, he used the same investment guidelines he had always used to produce returns of around 20% in a three to five year timeframe.

His next move was to team up with companies that specialized in liquidating retail stores, where the stores’ inventories were the focus and the real estate was rarely considered. This strategy involved acquiring assets from bankruptcy court, another first for Klaff. Going through and understanding this process gave Klaff a niche opportunity as the only real estate company utilizing this avenue for acquisition opportunities.

Klaff is currently searching for his next great idea, which may involve real estate in South America or a return to Chicago (Klaff was a strong bidder in the 2009 sale of the Chicago Cubs, which, believe it or not, was a real estate play). While many would see the obstacles in investing in a new arena such as a foreign nation or a baseball team, Klaff sees the opportunities that no one else can.

The Innovator Award was conceived from the paper entitled "Tradition and Innovation," written by Stephen Malpezzi, academic director of the Graaskamp Center. The paper's central theme is that a rich history cannot be established without continually implementing innovation. The award, sponsored by the UW Real Estate Club and the Graaskamp Center, is typically handed out each semester.

Eric Dowling is a first-year MBA student in the James A. Graaskamp Center for Real Estate. Eric plans to combine his previous real estate experience with his MBA education to establish a career in private equity investments.