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.

Reporting from MIPIM: Cautious optimism

The Graaskamp Center was very glad for the opportunity to contribute to MIPIM's official blog. Prof. Erwan Quintin, along with Wisconsin School of Business Dean François Ortalo-Magné, led the delegation of Wisconsin Real Estate MBA students who attended the international event. He summarized his perspective and his outlook on the week's activities in this post.

As seems to be the case every year, strong themes clearly emerged at MIPIM. First and foremost, participants are looking for signs that the crisis days are over and that investors are once again willing to accept some exposure to real estate beyond the safest, core markets. Investors also want to know which opportunistic markets will benefit the most from the recovery, if and when it comes. And they want to know what lessons, if any, the industry has learned from the crisis experience.

The broad sentiment at MIPIM this year is probably best described as “cautious optimism.” As bearish as they sound about their own markets, European investors appear remarkably bullish about U.S. prospects.

He also offered this:

A near consensus also emerged among institutional investors that the basic investment model in real estate must change in the wake of the recent financial crisis. Capital losses of historic magnitude have prompted large investors to question past practices, demand significant changes in how they interact with partners and fund managers. Investors are demanding more control over how their capital gets deployed, more transparency, and are working harder to align incentives throughout the intermediation chain. A new and improved real estate fund model should result from this phenomenon.

To continue reading Prof. Quintin's outlook, visit the MIPIMWorld blog.

Wisconsin also contributed these posts:

• A Political Perspective on the Euro Crisis: Students and faculty from the Wisconsin School of Business are attending MIPIM 2012 this week. Bashar Elayyan reports on his experiences and takeaways from Day 3.
• MIPIM: The Students’ View: The Wisconsin School of Business gears up to cover MIPIM 2012.

For more of Wisconsin's Reporting from MIPIM here on the Wisconsin Real Estate Viewpoint, click on the "MIPIM" tag.

Reporting from MIPIM: Risk Aversion

Reporting from MIPIM:

François Ortalo-Magné, Albert O. Nicholas Dean of the Wisconsin School of Business, gave the keynote wrap-up address at MIPIM this year. Alongside Mark Roberts, Global Head of Research for RREEF, Ortalo-Magné spoke on the key themes heard at MIPIM during the conference.

One of the key points of Ortalo-Magné's talk was that throughout the conference, a general theme of risk aversion, with a focus on stable returns was consistently heard. Cities that were promoting themselves at MIPIM utilized this message in selling themselves as low-risk investment locales. This was a far cry from the dynamism with which cities had previously marketed themselves at MIPIM.

Levels of risk were a dominant theme of conversations in the MIPIM halls. "What has been striking this year at MIPIM is that major cities are using their low-risk credentials as a selling point to international investors," noted Francois Ortalo-Magne, Albert O. Nicholas Dean of Wisconsin School of Business. "It used to be that the cities would sell themselves as exciting and dynamic markets, now the low-risk card is being played to the maximum."

PR Newswire picked up Ortalo-Magné's comments regarding the nature of how cities are pursuing real estate investment and posted on their website.

For the full presentation from the wrap-up keynote, click here.

Reporting from MIPIM: Day 3: A Political Perspective on the Euro Crisis

The Wisconsin School of Business is proud to partner with MIPIM World to bring you updates and developments from the show. Bashar Elayyan (MBA '13) reports on the official blog on his experiences and takeaways from Day 3.

Bonjour from Cannes!

Day three of MIPM is nearly over, and it remains a beehive of activity in what is currently the de facto center of the real estate universe. I had more time to walk about the booths today and I can inform you that it is a dazzling carnival of renderings, animations, techie pavilions and shiny models. You are enveloped and bombarded by a mosaic of competing ambitious projects screaming for your attention. Your eyes simply can’t have enough of this feast of monumental aspirations that radiate national pride.

Read more at MIPIM World.

For more coverage check in with us on the Viewpoint or follow @UW_GraaskampCtr on Twitter.

Reporting from MIPIM: Who will "win" in distressed investing in Europe?

Reporting from MIPIM on Wednesday's session on Private Equity: European Distressed Investing

The latest European credit crisis has created an interesting scenario involving apprehensive real estate private equity investors and deleveraging commercial banks. The facts are clear: large European commercial banks will be forced soon to unload billions of dollars of real estate debt from their books due to tightening regulations (Basel, Solvency, etc.) in the near future. There is enormous pent-up demand among investors for these assets, with current fundraising in the tens of billions of dollars.

This would seem to represent a significant opportunity but so far, European banks have been reluctant to shed real estate assets at “fire sale” prices. Will supply loosen up to meet this demand? And what will it take?

In the heat of the crisis, European investors fled to core assets. The investment focus was on gateway cities such as London, Paris, and Frankfurt. Now, many feel core assets in these locations are over-valued, reaching yields as low as 3-4%. So this area does not currently present significant opportunities in Europe.

An interesting side note to this situation is the relative outlook by European vs. U.S. investors. U.S. investors seem to be far more pessimistic on the future of Europe than are European investors. European optimism is based in knowledge of the history of their markets, and confidence in the structures in place to fix the current crisis. So does that mean American investors may miss out on deals on distressed assets?


For more coverage of discussions and developments at MIPIM, check our blog and visit the official MIPIM blog. And follow us on Twitter (@UW_GraaskampCtr) and on Facebook.

Reporting from MIPIM: A "perfect storm" for investment in the U.S.?

Reporting from MIPIM:

The U.S. is poised at a "perfect storm" of factors aligned to drive investment in the country. Factors including the US dollar which remains the world's default currency, the continued appetite of U.S. businesses for new opportunities and American consumers' continued reign as the top worldwide consumers of goods and services.

On Tuesday afternoon, presenters from the Association of Foreign Investors in Real Estate (AFIRE), CBRE, the Paramount Group and Metzler Real Estate spoke on what many analysts foresee as an influx of investment capital coming into the U.S. over the next five years. This confluence of factors points to the U.S. as a safe haven.

Primary points from the discussion included the continued dominance (some would say stranglehold?) that the U.S. has as an investment destination and as the best option for capital appreciation. U.S. cities make up three out of the top four cities for global investment: New York, London, Washington DC and Sao Paolo. Additionally, total U.S. transaction volume has reached its 2004 volume, there are downward sloping unemployment numbers in the US, the return on real estate is 500 basis points over that of bonds, and foreign investors and pension funds are currently buying U.S. REITs: More elements of a "perfect storm," even in the face of anticipated uncertainty in market confidence from November's U.S. presidential election.


For more on investment trends for 2012, read more about the survey conducted annually by the Graaskamp Center of members of AFIRE: New York, DC and Then...Sao Paulo? The 5 Top Cities for Investors

And for more coverage of discussions and developments at MIPIM, check our blog and visit the official MIPIM blog.

MBA Global Trip: South Africa

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.

Sixth annual MIPIM trip brings optimism and global connections to students

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

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.

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

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

Reporting from MIPIM 2011

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?

A whole, new world

In January, second-year Wisconsin Real Estate MBA students traveled to Hong Kong and Seoul. The tour included meetings with UW alumni and local officials and site visits to significant properties in each market. Students brought back networking contacts, souvenirs, and, most importantly, a new perspective on real estate markets beyond the U.S.

That international perspective is an important component of our real estate MBA program. The trip is part of the second-year curriculum. First-year students will attend MIPIM in Cannes, France in March. It's the Wisconsin viewpoint that the world needs passionate, talented and socially responsible people to develop, finance and improve the urban environment. The Wisconsin Real Estate Program challenges the next generation of leaders to reach their potential.

Students have additional opportunities to travel within the U.S. and abroad through the Wisconsin School of Business and with the UW Real Estate Club.

Check out this video, made by one of our students, of the highlights of the trip:

CNBC: Foreign Investors Betting Big on US Real Estate

James A. Fetgatter, chief executive of AFIRE, the Association of Foreign Investors in Real Estate, appeared on CNBC to discuss the results of the annual survey of its members by the James A. Graaskamp Center for Real Estate. The survey was conducted in the fourth quarter of 2010 by Professor François Ortalo-Magné with assistance from first-year real estate MBA students at the Wisconsin School of Business.

The survey was also mentioned on the The Today Show last week.

Welcome to Global Real Estate Master students!

The first students in the Global Real Estate Master (GREM) program at Wisconsin arrived over the weekend. They began their orientation activities this morning.

The Global Real Estate Master brings students from three of the world's leading business schools--HEC Paris, Hong Kong UST, and INCAE (Costa Rica)--to Madison for an intensive semester of real estate training at the Wisconsin School of Business. This unique degree program is the first and only graduate-level business program designed to provide students with a set of skills and experiences that will prepare them to be leaders in global real estate. We are glad to welcome the inaugural class to campus.

The 13 students starting the program today come from a variety of backgrounds including finance and investment banking, economics, real estate development and civil engineering. They all share a passion for real estate and a desire to advance their careers with a unique skill set in real estate.

The GREM semester includes coursework in the real estate process, real estate valuation and feasibility analysis, urban economics, capital markets, and commercial real estate development; plus a field trip to a major U.S. real estate market. There is one intake per year for the spring semester. Learn more about the program and admission at www.bus.wisc.edu/grem. There is also a list of students in the January issue of our newsletter.

The world needs passionate, talented and socially responsible people to develop, finance and improve the urban environment. The Wisconsin Real Estate Program challenges these people to reach their potential, building on a 100-year long tradition in research and education. The GREM initiative is just one example of Wisconsin's commitment to global leadership.

U.S. Cities Lead Way for Global Foreign Real Estate Investment

Results of the 19th annual survey of members of the Association of Foreign Investors in Real Estate (AFIRE) conducted by the James A. Graaskamp Center for Real Estate were published this week.

The survey has 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. Survey respondents hold more than $627 billion of real estate globally, including $265 billion in the U.S. The survey was conducted in the fourth quarter of 2010 by the Graaskamp Center led by Professor François Ortalo-Magné with assistance from first-year real estate MBA students at the Wisconsin School of Business.

"Global investors express strong confidence in their favorite US markets: New York City and Washington, D.C.," said Ortalo-Magné. "The trend we have observed of a broadening interest in emerging market strategies beyond China is in line with what our Global Real Estate Master students heard at MIPIM Asia two months ago."

Among the survey results (click here to visit AFIRE):
• More than 60% of respondents, a margin of 54 percentage points over second-ranked China, indicate that the U.S. offers the best potential for capital appreciation. This is the highest positive response to this question since it was first asked in 2000; this number is a dramatic reversal from 2006 when it reached a lowest level of 23%.

• Investors overwhelmingly chose New York and Washington, D.C. as the two top global cities for their real estate investment dollars.

• 72% of respondents say they plan to invest more capital in the U.S. in 2011 than they did in 2010.

• When ranked among countries targeted for real estate investment in 2011, the U.S. score was quadruple that of the second-ranked U.K.

“As the fear of a double-dip recession has faded, investors are becoming more enthusiastic about the prospects for the U.S. economy and are taking aim at real estate investment opportunities in the U.S.,” said James A. Fetgatter, chief executive of AFIRE. “However, their strategy is more akin to a rifle than a shotgun. Except for multi-family housing, they are not scattering their interest throughout the U.S., but rather narrowly targeting it to New York City and Washington, D.C., to an even greater extent than in previous years.”

Other U.S. Real Estate Trends
2011 Perspective: An Improving Market
When asked about their perception of the U.S. real estate market as a conduit for their investment dollars, responses underscore a continuous improvement over the last year:

• 40% said they were more optimistic than they were at the start of 2010
• 55% said they felt about the same
• 4 % said they were more pessimistic.

Top Five U.S. Cities for Foreign Real Estate Investment
Historically, there has been a fairly even distribution of votes among the top U.S. cities. In this year’s survey, however, New York and Washington scored almost four times higher than third place Boston.
1. New York (#2 in 2010)
2. Washington, D.C. (#1 in 2010)
3. Boston (#4 in 2010)
4. San Francisco (#3 in 2010)
5. Los Angeles (#5 in 2020)

Preferred U.S. Property Types for Investment in 2011
Although, as it has for the last several years, multi-family properties remain investors’ first choice, hotels have come out of three year, fourth- and fifth-place doldrums.
1. Multi-Family (#1 in 2010)
2. Retail (#4 in 2010)
3. Hotel (#5 in 2010)
4. Office (#2 in 2010)
5. Industrial (#3 in 2010)

Global Real Estate Trends
“Compared to 2010, there is definitely a broadening of interest among emerging markets,” said Ian Hawksworth, AFIRE’s newly elected chairman. “For those who were risk averse last year, China seemed a safe harbor for emerging market investments. But, for now at least, investors have become more comfortable diversifying into other emerging markets. Likewise, in the last downturn, London was the first market to recover, and whilst investment in the UK Capital is still very active, it is not surprising that London has dropped to third place as investors expand their search to higher yielding markets such as U.S. gateway cities that offer attractive risk adjusted returns.”

Emerging Markets for Investment in 2011
Since 2009, when it was first ranked as an emerging market of interest, Brazil has held either the first (2009 and 2011) or second (2010) ranking. The trio of Brazil, China, and India dominate this ranking. Russia, which has been among the top five emerging markets in the last two years drops into tenth place.
1. Brazil (#2, tied with India, in 2010)
2. China (#1 in 2010)
3. India (#2, tied with Brazil in 2010)
4. Vietnam (unranked in 2010)
5. Mexico (#4 in 2010)

Top Global Cities Rank for 2011
London, which held sway as one of investors’ top two cities every year since 2001, has been deposed into third place. Shanghai returns to fifth place after dropping into ninth place in 2009. Tokyo moves out of the top five into fourteenth position.
1. New York (#3 in 2010)
2. Washington, DC (#2 in 2010)
3. London (#1 in 2010)
4. Paris (#4 in 2010)
5. Shanghai (#9 in 2010)

Top Countries Targeted for Real Estate Investment in 2011
Although historically, investment targeted to the U.S. earns a substantial margin over other countries, in this year’s survey it ranked nearly five times higher than second place U.K. In 2010, it ranked less than three times higher.
1. US (#1 in 2010)
2. UK (#2 in 2010)
3. Germany (# 3 tied with France in 2010)
4. China (#5 in 2010)
5. France (#3 tied with Germany in 2010)

Countries Providing the Best Opportunity for Capital Appreciation in 2011
Consistent with other answers to this year’s survey, the U.S. claimed an historically disproportionate number of votes, more than six times than that for second place China.
1. U.S. (#1 in 2010)
2. China (#3 in 2010)
3. U.K. (#2 in 2010)
4. Brazil (#4 in 2010)
5. Australia (unranked in 2010)

Countries Providing the Most Stable and Secure Real Estate Investments in 2011
The U.S. continues to provide the most stable and secure real estate investment, but by a shrinking margin over other countries. None of the leading emerging markets are among the top 10.
1. U.S. (#1 in 2010)
2. Germany (#2 in 2010)
3. Canada (#3 in 2010)
4. UK (#6 tied with Australia in 2010)
5. Australia (#6 tied with the UK in 2010)

AFIRE members have a common interest in preserving and promoting investment in cross-border real estate. Founded in 1988, AFIRE currently has nearly 200 members representing 21 countries. www.afire.org

The world needs passionate, talented and socially responsible people to develop, finance and improve the urban environment. The Wisconsin Real Estate Program challenges these people to reach their potential, building on a 100-year long tradition in research and education. Click here to learn more.

Well begun is half done: Pleasant surprises in Madison

The new school year has begun, and we are continuing a series that we started last year called Meet Our Current Students where we hear from current real estate MBA students about their experiences in the program. We kick things off in fall 2010 with a post from Class of 2012 MBA candidate Julia Xia:

This was my first trip to the U.S., and I had expected that adjusting to things would be more difficult for me. However, Madison has had this magic power to make me feel at home, and I fell in love with this city at first sight. In fact, it has never stopped giving me little pleasant surprises throughout my first month on campus.

The first surprise is the high quality of the students and the close-knit community. This year, the Graaskamp Center has recruited 3 international students to the real estate MBA program, all graduates from top colleges in their home countries. All first-year real estate MBA students have strong and diverse professional backgrounds in the real estate industry. They hail from private equity funds, development companies, and consulting firms. During the first week, the second-year real estate MBA students welcomed us with a party at a classmate’s home where I got a detailed introduction to school life. I felt that we were already closely connected, and I am glad to be studying along side these smart people.

The school year started with a nice orientation to help familiarize us with the campus, classmates, professors and resources. During the orientation, we had a great night at a welcome reception hosted by Graaskamp Center Assistant Director Sharon McCabe’s home, meeting and talking to the faculty of the Center. I was impressed by their insightful views about the real estate market not only in the U.S. but also in other emerging markets such as China. We have a small group of real estate MBAs which allows the Center to help me reevaluate my career path one-on-one and set the direction for future improvement.

The supportive alumni of the Wisconsin Real Estate Program also gave me a warm surprise. We had a nice welcome party with local alumni during the orientation week, and we connected with some other alumni after that. They took us to a football game; it was the first time I watched an American football game. It’s a great game and has helped me understand the tradition and culture of Wisconsin better. During the recent meeting of the Graaskamp Center Board of Advisors, I had the chance to talk with several leaders about their fruitful experience in the real estate industry. Again to my surprise, everyone was very patient and helpful and shared knowledge from their real estate practice, which I can’t learn anywhere else.

The class schedule is busy but very useful. In the first semester, we are taking general business courses plus one course within the real estate specialization. I feel that all the courses are designed with a purpose to guide us in the real business world and to help us to make effective decisions in our future careers. I especially like Real Estate Finance and Investment. Professor Abdullah Yavas is skilled at teaching the real world applications of our curriculum.

As we say in my country, “Well begun is half done!” I have had a good start, and I’m looking forward to the next two years of life studying here in Madison!

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.

Wisconsin Real Estate goes to Costa Rica

Wisconsin Real Estate is visiting INCAE in Central America this week! Faculty Associate Joe Walsh, one of the administrators of our Global Real Estate Master program, is on campus in Costa Rica for a series of visits with faculty and staff of the top-ranked business school plus meetings with local industry leaders and students. We're grateful to Guillermo Selva and everyone at INCAE for arranging the schedule for the visit.

Wisconsin's new Global Real Estate Master (GREM) degree program is a partnership between three of the world's top business schools--INCAE, HEC Paris and the HKUST Business School--and the top ranked Wisconsin Real Estate Program. This unique initiative brings students from all corners of the globe to study the best in real estate education in Madison. The inaugural GREM class will arrive on campus in January 2011 for an intensive spring semester of activity.

To learn more about the GREM partnership, visit www.bus.wisc.edu/grem/. Or click on INCAE's GREM program page.

Real estate students travel to South Africa

The Wisconsin School of Business offers many opportunities to study internationally, including trips overseas during winter break. Two separate groups visited Argentina, and the second-year real estate students traveled to Brazil. Five of the first-year real estate students, including myself, participated in an international business course trip to South Africa this January.

There, we had the opportunity to meet with the leadership teams of international companies in Johannesburg. We saw newly implemented processes in a Ford automobile
factory, visited the Johannesburg Stock Exchange, and talked with SAB Miller, the company that acquired Miller Brewing. After traveling to Cape Town, we met with two entrepreneurial companies, one that enables local farmers to produce at living wages, and another firm started by a UW alum that recycles and manufactures plastics.

We also had time to see the unique cultural and natural attributes of South Africa, including Nelson Mandela’s home and the site of his former incarceration. Our trip to Kruger National Park reminded me of Yellowstone, but instead of driving among buffalo and cougars we saw wildebeests and lions. Finally, we visited the wine region of Stellenbosch, sort of the South African Napa Valley.

A couple tips if you find yourself in South Africa: “pap” is a type of corn-based grits that is friendly for your fellow vegan travelers, also, it is illegal to get out of your car when you are in the vicinity of lions.

Travis Campbell is a first year MBA student in the James A. Graaskamp Center for Real Estate at the Wisconsin School of Business. He is glad to be home after extensive traveling over winter recess, but he is apprehensive to start this new semester.