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

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

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

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

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

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

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

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

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

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

What GMAT or GRE score is needed?

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

What else do you look for in a candidate?

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

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

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

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

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

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

When should candidates apply?

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


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


Contact us today:

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


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

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

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

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.

Message to a prospective student

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

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

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

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

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

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

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

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

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

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

Nobel laureate in economic sciences to visit campus next week

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

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

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

Remembrance for Mason Carpenter

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

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

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

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

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

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

"The Calculator"

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

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

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

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

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

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

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

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

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

Studying Tax Incremental Financing (TIF) in the field

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

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

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

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

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

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

From the UW-Madison press release:

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


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

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

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

Teaching real-world scenarios through case studies

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

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