James A. Graaskamp Center - Wisconsin School of Business

Annual Report
2006-2007 Fiscal Year
James A. Graaskamp Center
for
Real Estate
UW‐MADISON SCHOOL OF BUSINESS GRAASKAMP CENTER FOR REAL ESTATE STAFF Tim Riddiough Academic Director Mike Mihelbergel Executive Director Lee Gottschalk Associate Director for Education and Outreach Francois Ortalo‐Magne Associate Director for International Programs Sharon McCabe Assistant Director (focus on recruiting/career services) David Shulman Assistant Director of ARESAP Dawn Hamre Center Assistant UW‐MADISON SCHOOL OF BUSINESS GRAASKAMP CENTER FOR REAL ESTATE STAFF Tim Riddiough Academic Director Mike Mihelbergel Executive Director Lee Gottschalk Associate Director for Education and Outreach Mary Brost Program Associate Francois Ortalo‐Magne Associate Director for International Programs Sharon McCabe Assistant Director (focus on recruiting/career services) David Shulman Assistant Director of ARESAP Dawn Hamre Center Assistant TABLE OF CONTENTS
The James A. Graaskamp Center for Real Estate……………………………………………… 2 Letter from the Center Director……………………………………………………………..…… 4 2006‐07 Key Accomplishments………………………………………………………………….. 5 In Memoriam…………………………………………………………………...………………….. 12 The MBA Program in Real Estate……………………………………………………..…………. 13 International Studytrips………………………………………………………………………….. 15 Student Enrichment………………………………………………………………………….……. 18 Curriculum………………………………………………………………...……………………….. 22 Ensuring Quality…………………………………. ………………………………………………. 23 MBA Career Services and Job Placement………………….……………………………………. 24 Board Membership and Programs……………………………………………………………….. 25 Center for Real Estate Board of Advisors……………………….………………………………. 27 Marketing……………………………………………………………………………….………….. 32 Executive Education Update………………………………………………………………………35 In the Classroom…………………………………. ………………………………………………. 36 Grainger Hall Addition……………………………………………..…………………………….. 37 Young Alumni Perspectives…………………………………….……………….……………….. 38 Key Facts……………………………………………………………………………………...…….. 39 THE JAMES A. GRAASKAMP CENTER FOR REAL ESTATE The University of Wisconsin‐Madison Center for Real Estate was established in 1971 to foster excellence in real estate education, research and outreach through community and professional partnerships. In April 2007, the Center was renamed after legendary real estate professor James A. Graaskamp, the finale to a remarkable fundraising effort by over 600 alumni and friends. Historically, the Center’s main goal has been to serve as a link between the Real Estate faculty and students, alumni, the real estate professional community, governmental agencies and the general public. This core mission continues, but has recently expanded to include administering the MBA Program in Real Estate. The MBA Program delivers a multi‐disciplinary approach to learning and offers the most comprehensive curriculum of any real estate program in the country. The Center also creates outstanding networking events for students, board members, alumni, faculty and professionals to meet and share their knowledge and expertise. These events are designed to complement classroom learning, and include the Center’s Board of Trustees meetings, an Executive‐in‐
Residence lecture series, the new E.J. Plesko Distinguished Speaker Series in Real Estate Development, and programs that are co‐sponsored with the Wisconsin Real Estate Alumni Association, Real Estate Club, and private and non‐profit organizations. The Center and Department have an involved and experienced staff that caters to the individual needs of students, board members, alumni and employers. We provide advising and mentoring to help match students with appropriate career opportunities. Scholarships and fellowships are available to qualified students, along with occasional opportunities to work on consulting projects with faculty. We hope to instill our students with our core values and create a valuable, life‐long network for learning and professional growth. In essence, our goal is to educate and mentor socially responsible leaders of the real estate profession. Components of Center Activity • The MBA Program in Real Estate • Board of Advisors • Executive Education and Professional/Community Outreach • Research The Center’s Primary Mission • To attract first‐rate MBA students and transform them into competent, creative and collaborative professionals who are prepared to be leaders in the real estate industry. • To build and retain an extensive member base of real estate industry leaders through our Board of Advisors. • To preserve, promote and support the philosophy of the Wisconsin Tradition of excellence in real estate education. -2-
THE JAMES A. GRAASKAMP CENTER FOR REAL ESTATE (continued) The Center’s Core Values • Depth: Apply logic and analytical tools to develop a thorough understanding of relevant issues and problems • Breadth: Comprehend interconnections between issues and processes which, when combined with competent technical analysis, leads to sound business decision‐making; • Leadership: To provide an environment and culture that instills leadership principles and the development of leadership skills; • Diversity: Seek a broad array of people and experiences that enhance the overall learning experience. (left) A group photo of the MBA students attending the MIPIM Conference in Cannes, France. The trip was led by François Ortalo‐
Magné, Professor and Robert E. Wangard Chair in Real Estate. (right) Students analyze a proposed development during the MBA study trip to China. The development was a project for Hongkong Land Ltd’s Bamboo Grove, an 8 million‐square‐
foot planned mixed‐use development along the Jialing River. An article about the MBA student project is published in the August issue of Urban Land Institute (ULI) Magazine. The trip was led by Professor François Ortalo‐Magné, Senior Lecturer Rod Matthews and Senior Lecturer Sharon McCabe. -3-
A SUCCESSFUL YEAR IN BUILDING TOWARD THE FUTURE Dear Center Members: It’s been an incredible year, topped off by the $6 million in funds raised by alumni and friends to rename the Center after James A. Graaskamp. This renaming and the associated financial resources are vital to our success, as it will allow us compete effectively against other well endowed Real Estate Centers located throughout the country. A total of over 600 alumni and friends donated to the capital campaign, many of whom who are also center members. All of us associated with the Center owe particularly deep gratitude to Bryant Wangard and Mike Arneson for providing the initial push forward with a $1.7 million challenge donation, to an anonymous donor and Chuck Heath for their respective $1 million donations, and to the capital campaign steering committee of Jim Curtis, Jim Haft, Craig Manske, and Jim Smith. An additional cornerstone of the fundraising effort was the establishment of the Plesko Speaker Series in Real Estate Development, generously endowed by E.J. Plesko. We are also indebted to the Wisconsin Realtors Association for their continued financial support. Many of you attended the dedication ceremony last April, which was a terrific and tremendously moving event – really one of the highlights of my professional career. The Graaskamp name connotes tradition and excellence. It will be our job here in Madison to be caretakers of the Graaskamp legacy, with the added responsibility of innovating to meet the challenges of constantly changing real estate marketplace. People and organization are a key to our success, and will be an important focus going forward. As many of you know, Morris Davis, a prominent economist and former advisor to Alan Greenspan at the Federal Reserve, joined our faculty just over a year ago. David Shulman, Graaskamp award winner formerly of Lehman Brothers and one of the most respected economists on Wall Street, is a visiting professor and assistant director at the Center who also runs our Applied Real Estate Investment Program. Sharon McCabe, an alum and a long‐time instructor in the Program, is now an assistant director of the Center in charge of the MBA student experience. We are currently in the market for a new faculty member that specializes in finance and investment. Our intent as we reorganize is to steadily raise the bar through a relentless focus on excellence in everything that we do. We have added approximately twenty new members since this spring. They are a diverse group of high‐
quality firms and individuals that we believe you will be proud to be associated with. Many of you had a hand in helping bring in new members (thank you again), and the exposure and goodwill generated through the naming of the Graaskamp Center has also been a big contributing factor to our success at retaining and expanding membership. Our MBA students are competing for and obtaining some of the most sought‐after positions available in the marketplace. From a recruiting perspective, we continue to attract new firms from every part of the country, representing all corners of the real estate professional world (some of you are those firms!). Our success in placing students comes in large part from their exposure to the best and brightest in the real estate industry during their two years in the Program. An invaluable component of that exposure is the networking opportunities made available at our twice‐a‐year center board meetings. Our continued overriding objectives are to provide you, our members, with unique, high‐quality educational and networking opportunities. This coming year promises to be exciting and eventful, as we seek to solidify our leading position in the real estate educational and professional market. All the best, and we at the Graaskamp Center look forward to working with you over the coming year. Sincerely, Tim Riddiough, Director -4-
2006‐07 KEY ACCOMPLISHMENTS “Create the Future” Campaign Establishes the James A. Graaskamp Center for Real Estate In January of 2007, the University of Wisconsin‐Madison Center for Real Estate proudly announced that nearly 600 alumni and friends raised nearly $11 million in donations and will renamed the Center after the late professor James A. Graaskamp, a legendary figure in real estate education. The program is more than halfway toward its goal of raising $20 million over five years to maintain Wisconsin as the premier real estate program in the nation. Private gifts will help the Center strengthen current offerings, such as required overseas study tours to France, China and other countries, feasibility and development project analyses, and a $1 million portfolio of REIT stocks that students manage as part of the Applied Security Analysis Program. The Center will also augment its staffing levels as we expand programs to meet expectations set by our faculty and stakeholders. The initiative began with a challenge by Bryant Wangard, BBA ‘77, MS ’79; and Mike Arneson, MS ’81, as well as other principals of TOLD Development, who donated $1.7 million to rename the Center and encouraged other alumni to follow suit. An anonymous donor contributed $1 million, followed by Chuck Heath, BBA ‘81, MS ’83, and his wife, Kathleen, who also gave $1 million. More than 600 other financial pledges have been received from donors young and old, signifying remarkably broad support for the renaming project. “I would not be where I am today without the influence of Jim Graaskamp in my life,” said Chuck Heath. “Now is the time to formally connect his name with the UW Real Estate program forever.” The Wisconsin Real Estate Alumni Association provided an incredible foundation for the fundraising effort and was led by four dedicated individuals: Jim Curtis, Jim Haft, Craig Manske, and Jim Smith, all graduates of the real estate program under James Graaskamp. They were supported by many other dedicated alumni and friends throughout the country. Michael Knetter, UW business school dean, was pleased at the outpouring of support for the Center’s goals. “I have been impressed with the way that real estate alumni have stepped up to take this outstanding program to even higher levels,” he said. The Wisconsin Real Estate program consistently ranks as one of the top three real estate programs nationwide and is widely recognized for its rigorous curriculum, top students, outstanding faculty and extensive alumni network. In 2004, as part of a school‐wide strategy to develop specialized MBA programs, the Center absorbed administration of the Real Estate MBA. The additional resources now available to the new James A. Graaskamp Center for Real Estate will allow it to compete even more effectively with the dozens of existing and new real estate programs that have recently emerged around the country. -5-
2006‐07 KEY ACCOMPLISHMENTS James Graaskamp, who taught real estate at the University of Wisconsin‐Madison from 1964 to 1988 and was program chairman from 1968 until his death in 1988, was instrumental in creating the modern real estate curriculum and elevating the discipline to a position of national prominence. Working with legions of graduate students, he promoted new thinking about feasibility analysis, development and risk management, eschewing traditional economic models in favor of instruction through practical field studies. Through his teachings, Graaskamp instilled a concern for ethics and a comprehensive approach to improving the quality of the built environment. Today’s UW‐Madison Real Estate program honors and builds on that ethic, offering a multi‐disciplinary approach to real estate with a focus on development, international topics, feasibility analysis, finance and investment, valuation, law and urban land economics. The donations will allow the Center to move forward with its goals, said Timothy Riddiough, director of the Center for Real Estate. “We are extremely grateful to our alumni, Center for Real Estate Board of Advisors, and friends for helping us achieve this important outcome,” Riddiough said. THE NAMING AND DEDICATION CELEBRATION On April 25 and 26, 2007, a special two‐day ceremony to rename the Center was held in conjunction with the Center’s board meeting at the Fluno Center and Monona Terrace in Madison. Right: Board member and real estate alum Chuck Heath donates an original print of James Graaskamp to Dean Michael Knette at the Naming and Dedication Celebration. The print is currently displayed in the MBA student lounge in Graaskamp Center for Real Estate. The ceremony included a tribute to Graaskamp the man and mentor, as well as close looks at his professional career. Speakers and panel discussions included: • Alumnus Stuart Ackerberg, (B.S. 1979), CEO of The Ackerberg Group of Minneapolis, who inaugurated the Plesko speaker series with an eloquent portrayal of the lessons he learned as a Graaskamp student. • An inspiring and informative presentation on Graaskampʹs life was created and shown by alumnus Jim Curtis (M.S. 1976), principal of The Bristol Group, San Francisco. • At a panel titled, “Graaskamp’s Legacy,” alumni Arun Bhatia, Stephen Jarcho, Jim Smith, and Bryant Wangard alternated between amusing and poignant as they related stories of time spent with their former teacher. • A panel on “Recent Innovations and Macrotrends in the Real Estate Industry” featured Geoff Dohrmann, Larry Duggins and Leanne Lachman, who discussed market trends, the significance of securitization and the prospects of “greener” construction. -6-
2006‐07 KEY ACCOMPLISHMENTS (continued) •
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A little‐known facet of Graaskamp’s life—his time on Wall Street—was recounted by David Shulman, who met Graaskamp while he was directing real estate research at Salomon Brothers in the late 1980s. A final panel focused on the discussions behind the recent Equity Office/Blackstone transaction, and featured alumni Brian Berry, Michael Casey, Kevin Crummy, Bruce Johnson, and a special guest appearance by Roy March, CEO of Eastdil Secured, who was involved in the negotiations. As a ceremonial nightcap, music by “The Contractions,” a group of economists toting rock’n roll instruments instead of calculators, played to a standing‐room only crowd at Madison’s King Club. Prof. Morris Davis, who joined the real estate program in 2006, was on bass. (left) Paul Gilbert, Jim Curtis, and David Shulman greet each other at the Graaskamp Naming Celebration (Below) Graaskamp Center Director Tim Riddiough and Stuart Ackerbert discuss Graaskamp’s legacy at the Graaskamp Naming Celebration. -7-
2006‐07 KEY ACCOMPLISHMENTS (continued) E.J. PLESKO DISTINGUISHED SPEAKER SERIES IN REAL ESTATE DEVELOPMENT A new lecture series, the E.J. Plesko Distinguished Speaker Series in Real Estate Development, to be presented once each semester, was funded by a gift from developer E. J. Plesko, a Center advisory board member and president of E.J. Plesko & Associates, a real estate development and management company based in Madison. The new speaker series was created to bring the considerable real‐world development expertise of our alumni and board members to all Wisconsin real estate students. The selected speakers will feature developers who embody The Wisconsin Tradition in their spirit, ethics, imagination, entrepreneurial skills, and enthusiasm for improving the quality of our built environment. Each speaker for the new lecture series will also be the recipient of the new E. J. Plesko Distinguished Professional in Real Estate Development Award to be presented twice a year. Alumnus Stuart Ackerberg, (B.S. 1979), CEO of The Ackerberg Group of Minneapolis, inaugurated the Plesko speaker series with an eloquent portrayal of the lessons he learned as a Graaskamp student. He also received the first E. J. Plesko Distinguished Professional in Real Estate Development Award. MBA PROGRAM ƒ The MBA Program in Real Estate enrolled a total of 29 MBA students, making it one of the largest specializations within the School of Business. ƒ The MBA Class of 2006 had excellent job placement with 93% locating employment within three months of graduation. The average starting salary was $91,692 with an average signing bonus of $22,750. ƒ The Center offers the most in‐depth international experience of any real estate program in the country. First‐year MBA students participated in the fourth annual trip to the high‐level, European‐based MIPM Conference in France. The trip was led by François Ortalo‐Magné, who wrote report with students for the MIPIM administration and secured free entry for next year. (We are the only program that receives complimentary admission). ƒ Second‐year students participated in a fantastic studytrip to China with stops in Beijing, Shanghai and Chongqing. The trip was led by Francois Ortalo‐Magne, Rod Matthews, and Sharon McCabe. ƒ Francois Ortalo‐Magne fostered an exclusive relationship with Association of Foreign Investors in Real Estate (AFIRE) and our MBA students are now the only university students allowed to attend AFIRE events at a discounted rate. This connection with AFIRE has provided excellent opportunities for our students to connect with top executives in the international real estate market. More information on AFIRE is include in the Outreach and Executive Education Section below. ƒ Approximately $108,000 was awarded through the Center in recruiting scholarships, fellowships and program assistantships to graduate students. ƒ A number of curriculum innovations are underway; for example, development of new “Green Development” modules (grad and undergrad), shifting MBA urban economics to a broader “real estate economics” course, stronger analytics including deeper training in Excel, VBA, ARGUS. -8-
2006‐07 KEY ACCOMPLISHMENTS (continued) ƒ
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A special Argus training session was offered to all MBA students. ARGUS is the industry standard commercial real estate cash flow projection, transaction analysis and asset valuation solution. As always, prominent developers, consultants and other industry leaders visited campus to speak in real estate classes throughout the academic year. This provides students with a forum to interact with and learn from real estate professionals and alumni. REAL ESTATE CLUB ƒ The Real Estate Club also hosted many speakers and the 2007 Annual Career Fair that boasted its highest recruiter attendance ever. The Club is one of the most active School of Business student associations, and is an integral part of the educational experience for real estate students at UW‐
Madison. For the 2006/07 academic year, the club visited Boston and Los Angeles. Coordinated with the local chapter of the Wisconsin Real Estate Alumni Association, the field trips give students intensive ʺhands‐onʺ experience in the realities of the market and extensive contact with the alumni network The Center provides sponsorship funds for Club travel. APPLIED REAL ESTATE INVESTMENT TRACK (AREIT; formerly Applied Real Estate Securities Analysis Program) ƒ David Shulman, former managing director and head REIT Analyst at Lehman Brothers, is the new assistant director of the AREIT (Applied Real Estate Investment Track) for Graaskamp Center for Real Estate. Shulman will teach and oversee a group of three second‐year Real Estate MBA students who to manage a $1.2 million portfolio of publicly traded REIT stocks throughout the academic year. Shulman is also a visiting professor in the Department of Real Estate. ƒ The first program of its kind in the country, AREIT began in 1999 with a pool of roughly $375,000 in donations. Due to sound investment in years’ past, that total has grown to more than $1.2 million for the 2006‐2007 group. ƒ Since inception, students have generated growth of about 20 percent on average each year. BOARD OF ADVISORS ƒ Since January 1, 2007, the Center for Real Estate welcomed 21 new members to the board. Several members also upgraded their memberships to the Sustaining and Sponsor levels providing an additional level of support to the Center. ƒ Successful board meetings were held in the fall and in the spring. The fall meeting focused on professional and academic perspectives on real estate markets. The spring meeting was held in conjunction with the renaming of the Center after James A. Graaskamp. -9-
2006‐07 KEY ACCOMPLISHMENTS (continued) OUTREACH AND EXECUTIVE EDUCATION We give high priority to strengthening our working relationships and friendships with industry professionals, as well as alumni. Center for Real Estate/WREAA Receptions Jointly sponsored receptions are held at three national professional conferences per year: ULI, MBA and ICSC. The receptions help maintain visibility for the Center and the WREAA while fostering a networking opportunity for alumni and associates. Center Sponsors the Land Rich Conference Center sponsored the Land Rich Conference in April 2007 in Charlotte, NC. Asset Builders of America Inc. established the Land Rich initiative to help cash poor land owners to derive greater economic value from their real estate holdings. Land Rich is a national network of individuals, organizations and resources that are committed to assisting inter‐generational land owners in executing their land preservation and development visions in a holistic and collaborative manner. Beijing Delegation Visits Real Estate Program In June 0f 2007, a delegation from Beijing’s Ministry of Land and Resources along with Professor Lou Jianbo of the Center for Real Estate Law at Beijing University, visited the School of Business to learn more about the Real Estate programʹs activities and to discuss areas of potential cooperation. Professors Morris Davis and Steve Malpezzi discussed real estate and land pricing topics with the group. Mortgages and Housing Quality Discussed at UW Real Estate Research Conference, April 27‐28, 2007 The Center for Real Estate sponsored a research conference on mortgages and housing quality in Madison. Presenters included: •
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Chris Mayer, Columbia University, “Private Information and Market Making in the Secondary Mortgage Market” Gilles Duranton, University of Toronto, “Urban Growth and Transportation” Morris Davis, University of Wisconsin–Madison, “Amenities as TFP and the Factor of Four” James Albrecht, Georgetown University, “Directed Search in the Housing Market” Francois Ortalo‐Magne, “Bargaining and Price Determination of Residential Real Estate: Theory and Estimation” Stijn Van Nieuwerburgh, New York University, “Mortgage Timing” Juan Esteban Carranza, University of Wisconsin–Madison, “An Empirical Characterization of Mortgage Default in Colombia between 1997 and 2004.” Forté Foundation Sponsorship The Graaskamp Center provided sponsorship funds to the Forté Foundation, a consortium of major corporations and top business schools that has become a powerful change agent in educating and directing talented women toward leadership roles in business. Their mission is to substantially increase the number of women business leaders by increasing the flow of women into key educational gateways and business networks. - 10 -
2006‐07 KEY ACCOMPLISHMENTS (continued) MARKETING • The Center continues to focus on “brand awareness” through its marketing and PR efforts. The renaming of the Graaskamp Center received news coverage from a wide variety of local and regional media outlets. As always, our faculty often interviewed and quoted in the media. • ULI Magazine published an article written by Rod Matthews which discusses the MBA China Trip. Two major industry organizations, the Pension Real Estate Association (PREA) and the Counselors of Real Estate (CRE) published major features on the news of the Graaskamp Center dedication ceremony in summer in their magazines. The Minnesota Real Estate also published a feature story on Graaskamp. WEBSITE & E‐NEWSLETTER • An electronic newsletter (“The Real Estate Connection”) is being developed and is slated to be complete before the end of the 2007. The newsletter will provide updates on all aspects of the Wisconsin Real Estate Program and will be shared with alumni, board members and friends of the program. • The current Center website is being redesigned to provide more news and feature stories on students, faculty and alumni and multimedia (such as podcasts). NEW GRAINGER HALL ADDITION • A $40.5 million addition to the east side of Grainger Hall will house the Graaskamp Center as well as other MBA programs of the School of Business. The addition, located on Park Street between Johnson Street and University Avenue, is expected to be complete by the time the fall semester 2008 begins. The Wisconsin Real Estate Alumni Association (WREAA) earmarked a gift of $350,000 to upgrade the Graaskamp Center space making it a first‐class facility for students, faculty and staff. - 11 -
IN MEMORIAM Dianne Orbison Dianne M. Orbison, long one of the most successful and active alumni of the School of Business, died April 12, 2007. Orbison was chief investment officer of Securian Financial Group & president of Advantus Capital Management in the Twin Cities. She was a graduate of UW‐Madison, with a Bachelor of Arts in Political Science and French, and a Master of Science in Real Estate Investment Analysis, which she earned in 1977. Dianne was President of the Wisconsin Real Estate Alumni Association at the time of Professor Jim Graaskamp’s death. While uncertainty and turmoil raged, Dianne quietly orchestrated the many conflicting forces while letting others take much of the credit. During this period, Dianne educated University officials about our rich tradition in real estate education, and she convinced Dean Hickman and Chancellor Donna Shalala that this special enterprise should not only be preserved but it should be expanded. A former member of the Dean’s Advisory Board, Orbison remained active with the School of Business, especially the real estate program. She was one of the first speakers in the business school’s Executive Leadership Speaker Series and has been one of the prominent alumni featured in Wisconsin MBA viewbooks. In 2001, she was one of eight women named to the inaugural 2001 list of Twin Cities Top Women in Finance by Finance & Commerce, a local daily newspaper. The Wisconsin Real Estate Alumni Association (WREAA) has established the Dianne Marie Orbison Memorial Real Estate Scholarship Fund in memory of Dianne. - 12 -
THE MBA PROGRAM IN REAL ESTATE The MBA program in real estate prepares students for high‐level management positions in the industry. The two‐year program offers a multi‐disciplinary approach to real estate with about half the total coursework in real estate and half in high‐level business courses such as finance, accounting, management strategy and leadership. Required real estate courses include finance and investments, urban economics, valuation and development. Students take capstone seminars in their second year that expose them to a wide range of high‐level cases and concepts. The curriculum includes hands‐on projects, and students are required to participate in at least one field trip abroad to learn about real estate in other countries and cultures. We believe that students not only must be rigorously trained in real estate fundamentals and analytical techniques, but also must acquire skills in critical thinking, leadership and enterprise management. For the past two years, the Center has successfully delivered a revised MBA real estate curriculum in conjunction with a new school‐wide MBA program structure. The curriculum is the most comprehensive of any real estate program in the country and is made possible by the depth of our faculty, our expert team of adjunct professors/lecturers and support in conjunction with a new school‐
wide MBA program structure. The Applied Real Estate Investment Track (AREIT, formerly the Applied Real Estate Securities Analysis Program) David Shulman, former managing director and head REIT Analyst at Lehman Brothers, is the new assistant director of AREIT (Applied Real Estate Investment Track) for the Graaskamp Center Estate. Shulman will teach and oversee a group of three second‐year Real Estate MBA students who to manage a portfolio of REIT stocks throughout the academic year. Shulman is also a visiting professor in the Department of Real Estate. AREIT is a unique track within the MBA program in real estate where selected students undertake formal coursework in preparation for a year‐long course in which they will actively manage a one million dollar portfolio of publicly traded REITs and real estate operating companies. The program provides state‐of‐
the art education in understanding real estate as valued in exchange‐traded capital markets. Up to 4 students are selected to participate in AREIT during the second year of the MBA program. Beginning in September of the academic year, each team is given two months to form an investment management ʺfirmʺ that has an organizational structure, an economic outlook, an investment philosophy and a disciplined strategy that will be executed throughout the year. The teams present their portfolio management proposal to the AREIT Board of Advisors (the Client) for approval and subsequent release of funds to manage. Following approval from the Client, the teams meet multiple times each week, often with faculty and with the many investment professionals that serve as guest speakers for the program. Individual members of the team are responsible for conducting rigorous company and property sector research, making recommendations on the composition of the portfolio, and participating in the team decision making process for management of the funds. The team also presents their selections and results to the client twice a year after the initial presentation. - 13 -
THE MBA PROGRAM IN REAL ESTATE (continued) The AREIT Program helps students learn and develop important skills: fundamental research and portfolio management; a thorough understanding of real estate and capital markets; successful teamwork skills; polished and professional presentation skills and a skill set that can be applied to either the public or private real estate industry. For all but one year since AREIT’s inception, the student team has beat its sector‐wide benchmark. The chart below shows the ARESAP fund balance since the program’s inception in 1999 AREIT Fund Balances
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
1999‐2000 2000‐2001 2001‐2002 2002‐2003 2003‐2004 2004‐2005 2005‐2006 2006‐2007
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INTERNATIONAL STUDYTRIPS The Graaskamp Center offers the most in‐depth international experience of any real estate program in the country. Wisconsin students again traveled the world in their pursuit of greater understanding of global real estate markets. Trip Overview: Cannes, France Last March, 18 first‐year MBA students traveled to Cannes to attend MIPIM, where 21,000 dealmakers from 75 different countries meet annually to propose and hash out new projects. Wisconsin’s students picked from an array of speakers and 40 separate sessions, ranging from the renowned urban designer Daniel Libeskind, who discussed world architecture trends, to Henri Giscard d’Estaing, CEO of Club Méditerranée. At the panels, topics ranged from the opportunities emerging from the sale of government‐owned property, to investment opportunities in the Balkans, to the emergence of REITs across the world. “MIPIM can definitely yield job opportunities,” says Michael Scotti, a first‐year MBA students. “There are more than 1,000 companies and there were maybe 20 to 30 students at the conference. Students can have a potential field day with those types of numbers. I managed to get a verbal offer from a company based out of Germany.” The students attending MIPIM were led by professor and French native François Ortalo‐Magné, Robert E. Wangard Chair in Real Estate, who also led the trip in 2006. “The big thing this does,” Prof. Ortalo‐
Magné says, “is it re‐sets their objectives. They have preconceptions about the set of opportunities open to them as real estate professionals. Then they go there and see real estate professionals from all over the world, and see things they never imagined.” “I do believe it changes their lives,” he adds. Below are panel discussion topics from just the first day of the 4‐day MIPIM conference, March 13‐16, 2007. UW real estate MBA students took notes from each panel attended and wrote summary papers, which were edited, formatted as one document and sent to MIPIM officials for their consideration. For more information, see http://www.mipim.com. ƒ Daniel Libeskind: ʺWorld architecture trendsʺ ƒ The economics of climate change in the built environment ƒ South Africa: a rainbow investment. The secret is out! - 15 -
INTERNATIONAL STUDYTRIPS (continued) or more information, see http://www.mipim.com. ƒ End‐Users on the Road to Poland & Romania ƒ Where is the money heading? ƒ Emerging opportunities in the Balkans ƒ Putting the world to REITs ƒ Alternative investments today, mainstream tomorrow? ƒ Russia: investing in growth Trip Overview: Beijing, Chongqing, and Shanghai, China The 2007 trip to China began in January with two days in Beijing, home to the Chinese government and the 2008 Olympics. The group of second‐year MBA students and faculty members, including Matthews and Ortalo‐Magne, toured Tiananmen Square and the Forbidden City, then mingled with local residents at a variety of open air and enclosed markets. While in Beijing, the students met Professor Lou Jianbo of the Center of Real Estate Law at Beijing University, who highlighted the issues facing the Chinese government as they privatize land, and summarized new policies about to be implemented. In addition, a representative of Jones Lang LaSalle explained how construction takes place in China. Wychocki learned a lot, she said, “In the United States, buildings are completed from the ground up, with bottom levels being enclosed and finished first. In China, buildings are poured at one time, finish out and close‐ins are done on all levels simultaneously in order to begin the pre‐sale process as soon as possible.” Other cities visited by the students included Shanghai, where they met with executives from Citigroup Real Estate, Morgan Stanley and Hang Lung Development , and toured the Shanghai Planning Museum. Lastly, in the interior city of Chongqing, students were introduced to their consulting job: Hongkong Land Ltd’s Bamboo Grove, an 8 million‐square‐foot planned mixed‐use development along the Jialing River. “Our project is to provide feedback on best practices in the United States that they can apply to that development,” says Wychocki. “Are the demographics in sync with what they’re planning?” Students analyze a proposed development in China Sharon McCabe, a senior lecturer of classes in appraisal and feasibility, also accompanied students to China. She is especially fascinated by the Chinese property rights system, and how it is changing. ʺWhat do you own when you own property in China?” she asks. The government is now issuing 70‐year leases, but there is no discussion of the future beyond that, she says. “Chinese developers don’t see any downside to that, because they haven’t experienced it. It’s all been good times for them.” - 16 -
INTERNATIONAL STUDYTRIPS (continued) Wychocki, who chose Wisconsin’s real estate program partly because of its focus on development, says it was fascinating to glimpse an emerging economy unfold and to see the creative process at work. “And whenever you can get in front of executives at that level, it’s invaluable.” For 2007‐2008, MBA students will travel to China/Japan and MIPIM. An undergrad trip to Munich for Exporeal, another large international real estate conference, took place in October 2007. Traveling abroad gives real estate students “a chance to kick the tires,” says McCabe. “When you travel, sometimes it reinforces what you learned and sometimes it raises more questions. There’s only so much you can teach in a semester.” - 17 -
STUDENT ENRICHMENT Student enrichment activities have always been a part of the Wisconsin real estate tradition. Over the past year, we have built upon an already strong foundation of activities to expand and upgrade our roster of enrichment activities to complement the classroom experience. Here is a sampling of the 2006/07 student enrichment activities: The E.J. Plesko Distinguished Speaker Series in Real Estate Development A new lecture series, the E.J. Plesko Distinguished Speaker Series in Real Estate Development, to be presented once each semester, was funded by a gift from developer E. J. Plesko, a Center advisory board member and president of E.J. Plesko & Associates, a real estate development and management company based in Madison. Alumnus Stuart Ackerberg, (B.S. 1979), CEO of The Ackerberg Group, was the first Plesko speaker. The E.J. Plesko Distinguished Speaker Series in Real Estate Development was created to bring the considerable real‐world development expertise of our alumni and board members to all Wisconsin real estate students. Funds for the series have been graciously donated by E.J. Plesko, a Center advisory board member and president of E.J. Plesko & Associates, a real estate development and management company based in Madison. Guest Speakers Prominent developers, consultants and other industry leaders come to campus to speak in classes throughout the academic year. This provides students with a forum to interact with and learn from real estate professionals and alumni. See page 42 for a list of guest speakers. Alumni Network & Activities A unique aspect of the Real Estate program at UW‐Madison is the extensive support provided by the Wisconsin Real Estate Alumni Association (WREAA), a close‐knit organization that is the envy of the industry. Students have the opportunity to participate in Biennial Conference or the WREAA TRENDS conference in Chicago. Seminars and social events help establish new links with the current student body. Students also have access to the WREAA employment database. Board Meetings The Board of Advisors is the Center’s core advisory and support group and is comprised of some of the top real estate executives in the country, including both the corporate and non‐profit sectors. Board members meet twice a year to network and participate in seminars on important issues facing the real estate industry. The meetings provide a variety of stimulating programs and opportunities for industry leaders to connect with one another, as well as interact with faculty and students. . Real Estate Club The Real Estate Club is one of the most active School of Business student associations, and is an integral part of the educational experience for real estate students at UW‐Madison. In addition to its role in the recruitment process, Real Estate Club members meet frequently throughout the year to network and hear presentations from prominent real estate professionals. Twice a year the club offers a field trip to a major metropolitan area to help students gain insights into a local real estate market. For the 2006/07 academic year, the club visited Boston and Los Angeles. - 18 -
STUDENT ENRICHMENT (continued) Coordinated with the local chapter of the Wisconsin Real Estate Alumni Association, the field trips give students intensive ʺhands‐onʺ experience in the realities of the market and extensive contact with the alumni network. The Center provides support for some Club travel expenses. Spring speakers included: January 25th –Jim Curtis of the Bristol Group spoke about his new Los Angeles Center Studios project. February 1st –Paul Muench, Urban Land Interests February 8th – Alex Prombaum, Merrill Lynch Capital February 22nd – Todd McGrath, McGrath Development April 19th – Tom Zale & Paul Hanson, Northwestern Mutual 2007 Career Fair The club also hosted many speakers and an annual Career Fair that boasted its highest recruiter attendance ever. These companies attended the 2007 Career Fair: Allstate Investments Bank of America BlackRock Realty BPG Properties Ltd. CapitalSource Continental Properties Company CSM Corporation CWCapital LLC Dominion Bond Rating Service Dominium Development and Acquisition Duff & Phelps, LLC Ernst & Young, LLP Freddie Mac General Growth Properties GMAC‐RFC Great Wolf Resorts Hammes Company Holliday Fenoglio Fowler, L.P. Hines U.S. Bank Horizon Washington Mutual Integra Realty Resources, Inc. Jones Lang LaSalle Americas, Inc. Kohl’s Department Stores M&I Bank M&I Bank Real Estate Division Merrill Lynch Capital Moodyʹs Investors Service NAI MLG Commercial Northwestern Mutual ORIX Real Estate Capital, Inc. Park National Bank Principal Financial Group Prudential Mortgage Capital Company RED Capital Group Ridge Property Trust Ross Realty T. Wall Properties The Geneva Organization Transwestern Scholarships Approximately $108,000 was awarded through the Center in recruiting scholarships, fellowships and program assistantships to graduate students. Scholarships are used to attract top students to the real estate program and lower their cost of education. Donors know that their support attracts high caliber students − students who will make excellent alumni and future business partners. - 19 -
STUDENT ENRICHMENT (continued) New Grainger Hall Addition A $40.5 million addition to the east side of Grainger Hall will house the Graaskamp Center as well as other MBA programs of the School of Business. The addition, located on Park Street between Johnson Street and University Avenue, is expected to be complete by the time the fall semester 2008 begins. A group of Wisconsin real estate alums have earmarked funds to upgrade the Graaskamp Center space making it a first‐class facility for students, faculty and staff. The new addition will offer centralized resources for MBA students, including state‐of‐the‐art classrooms, MBA Program Office, MBA Career Center, breakout rooms and a unique multi‐purpose Plenary Room. In addition, it will provide upgraded office space and classrooms for the Executive MBA and Evening MBA programs. Funding for this project is provided by: 75% Gifts/Grants 25% State Funds 0% Tuition/Student Fees A $20 million gift, one of the largest in the history of the university, was given by David W. Grainger. In addition to the $20 million Grainger gift, $10.5 million in gift funds and $10 million in general fund‐
supported borrowing will complete the project budget. See page 37 for an architectural drawing of the Graaskamp Center’s space within the new Grainger Hall addition. - 20 -
STUDENT ENRICHMENT (continued) MBA Student Orientation & Social Activities New and returning students meet at the beginning of the semester to prepare for the academic year. Social activities during orientation provide opportunities for students to get to know faculty, staff and returning students. With the recent naming of the Graaskamp Center for Real Estate, this year’s orientation included a special focus on Graaskamp and his unique philosophy and holistic approach to real estate. Students were required to read several chapters of Graaskamp on Real Estate for discussion and both first and second‐year students were each given a CD copy of the presentation on James Graaskamp that was premiered in April at the Graaskamp Center dedication ceremony. The CD was the brainchild of Jim Curtis ((MS 1976) and was produced by his team of experts at the Bristol Group and LA Center Studios. Alums Brant Glomb (MS ’04), Criag Manske (MS ’81, BA ’79), Tonia Rumrill (MS ’03) and Joe Walsh (MS ’92) took time out of their busy schedules to participate in the orientation activities. They shared their perspectives on the Wisconsin Real Estate Program, along with insights and wisdom about working in the industry. The MBA class also met with local alumni at a dinner co‐sponsored by WREAA and participated in the “Badger Dash,” where teams of MBA real estate students raced to locate various spots on campus. - 21 -
CURRICULUM For the past two years, the Center has successfully delivered a revised MBA real estate curriculum in conjunction with a new school‐wide MBA program structure. Our curriculum is the most comprehensive of any real estate program in the country and is made possible by the depth of our faculty, our expert team of adjunct professors/lecturers and support in conjunction with a new school‐
wide MBA program structure. Real Estate Curriculum
Year One Curriculum
First Semester
Accounting
Financial Management
Marketing Management
Data Analysis & Decision Making
Communications
RE Finance & Investment
3
3
3
3
1
3
Second Semester
Operations Management
Economics for Managers
Managing Behavior in Organizations
Business Ethics
REITs
Risk Management & CMBS
Semester Credits
16
Semester Credits
First Semester
Business Strategy
Real Estate Valuation & Feasibility
Real Estate Economics
Contemporary RE Topics
RE Law
3
3
3
3
3
Second Semester
International Real Estate
International Study Trip
RE Development
International Finance
Elective*
Semester Credits
13
Semester Credits
Total Credits
*Elective chosen from RE Law, RE Development, Advanced RE Finance. - 22 -
3
3
3
1
3
3
16
3
3
3
3
3
13
60
ENSURING QUALITY ‐‐ THE RECRUITING AND ADMISSIONS PROCESS Admission to the MBA Program in Real Estate is highly competitive. Our goal is to attract diverse high‐
quality students from across the U.S. and world, so it’s crucial that we determine that the candidate is a good fit for the program. In reviewing potential Real Estate MBA students, the admissions committee evaluates the following areas: a demonstrated passion for real estate, relevant work experience, excellent communication and analytical skills, essays, letters of recommendation, maturity and leadership potential, GMAT scores, and undergraduate degree and GPA. Over the past two years, the Center has incorporated a more focused recruiting process. Executive Director Michael Mihelbergel meets with the applicants and helps them navigate the application process. For 2006/07, the Center enrolled a very talented and diverse group of 12 MBA students from all over the U.S. and abroad who excelled in the classroom and will be valued by our alums and employer partners. An important component of attracting top students is being able to offer financial support. The Center is committed to providing financial support to as many students as possible for a portion of the time they are enrolled. Thanks to our generous donors, we are now offering more Project Assistant positions than ever before. Students who obtain these positions receive full tuition, benefits and a stipend and, in turn, work about ten hours a week for the Center. In addition, most of our MBA students receive some type of scholarship support during their time in graduate school. 2006/2006 Recruiting and Enrollment Statistics 2006 MBA CLASS 2007 MBA CLASS (INCOMING) (INCOMING) Recruiting Statistics Applicants Admits Enrolled Student Profiles Enrolled Women International Minority Average GMAT Score Average Years Work Experience 42 24 17 17 3 3 4 662 2.5 51 25 12 12 2 1 3 643 3.7 - 23 -
MBA CAREER SERVICES AND JOB PLACEMENT MBA career development is a significant part of the student experience. Our students have access to a wide variety of resources to support them during the job placement process. The Center serves as a conduit to disseminate job openings for full‐time employment and internships. Resources available to students include: • MBA Career Services: Helps Wisconsin MBAs to enhance their marketability by providing resources and individualized career advising for students. They offer several online tools, including eRecruiting, the MBA CareerNet, as well as on‐campus recruiting and job postings. • Sharon McCabe: As Assistant Director for the Center, Sharon provides mentoring and guidance to students during the job search process. • Real Estate Club: Hosts an annual career fair in February where many industry leaders recruit and interview students. In addition, the Club holds six meeting per semester with guest lecturers and industry professionals who also recruit. Students also have the opportunity to participate in the two annual field trips to major cities where they can meet and discuss career options with alumni. • Student Resumes: MBA student resumes are available online at through the MBA Career Services Office (http://www.bus.wisc.edu/mbacs/). Job Placement Leading companies regularly recruit Wisconsin real estate students and our MBA students are getting terrific jobs—both at graduation and as interns. The Class of 2007 had 93% job placement for its students. 2007 Summer Internships Continental Properties Company Callahan Capital Partners Bank of America Liberty Property Trust Macquarie Group Ackman Ziff Dividend Capital Group Wachovia Securities Nationwide Insurance Real Estate Capital Partners 2007 MBA Salary Statistics (Permanent Placement) Average Starting Salary: $91,692 Average Signing Bonus: $22,750 Class of 2007 Job Placement Bank of America Bear Stearns & Co., Inc. BlackRock Realty CharterMac Mortgage Capital E.J. Plesko & Associates, Inc. Green Street Advisors Heitman North Central Group Transwestern Realty Finance Partners, LLC Wrightwood Capital - 24 -
BOARD MEMBERSHIP AND PROGRAMS The Board of Trustees is a core advisory and support group for the Center. It is composed of some of the top real estate executives in the country, including the corporate and non‐profit sectors. The board members’ advice and involvement with the students is one of the features that sets our real estate program apart. Members become involved by sharing their knowledge as guest lecturers in the classroom, serving as informal mentors to graduate students, recruiting talent for their firms and attending member board meetings each year. We want to thank all of our members for their generous and continued support of the Center for Real Estate and our mission. Memberships are critically important to our sustainability because the Center is entirely self‐supporting, including all operating expenses and the budget for our staff and a portion of its academic director. As always, one of our top priorities is to elevate and expand the Center membership and revenue base while maintaining a high‐quality membership at the senior level within the industry. As of August 15, 2007, the Center for Real Estate Board Members has 105 members, including honorary, student and lifetime members. The Center welcomed 22 new members since July 1, 2006. New Members in 2006/07 •
Steve Bailey, Managing Director‐Debt, Heitman, LLC •
Karen Case, Executive Vice President, LaSalle Bank •
Trish Kelly, Executive Vice President, LaSalle Bank •
Robert Chapman, Executive Vice President & Chief Financial Officer, Behringer‐Harvard Property Trust •
Lynn Cherney, Partner, Spencer Stuart •
Vince Cozzi, Vice President Acquisitions, Ventas •
Andrew Deckas, Chief Investment Officer, Opus Corporation •
Larry Freed, President, Joseph Freed and Associates LLC & Barry Kaufman Consultant •
George Gialamas, CEO, The Gialamas Company, Inc. •
Barry Kaufman, Divisional Vice President of Real Estate, Joseph Freed & Associated LLC •
Robert Gifford, Principal, AEW Capital Management, L.P. •
David Joseph, Principal, Walton Street •
Ray Lewis, Senior Vice President, Ventas •
Dave Maki, Head of Capital Markets, RREEF •
David Neithercut, President & CEO, Equity Residential •
Lee Pollock, Director, Stark Investments •
Scott Ransom, President & CEO, Marshall Erdman & Associates •
Milda Roszkiewicz, Senior Vice President, Wells Fargo Real Estate •
David Rubin, Managing Director, BMO Capital Markets •
Steve Semingson, Chief Executive Officer, Civic Partners •
Martin Stern, Executive Vice President and Managing Director, US Equities •
Dave Stroik, President/CEO, Zimmerman Architectural Studios - 25 -
BOARD MEMBERSHIP AND PROGRAMS (continued) Board Meetings One of the most important ways of expanding our membership base is to offer a compelling and high‐
level board meeting experience that provides perspective and insight that is different from that available at the numerous industry meetings and summits. The semi‐annual meetings (held in the fall and spring) provide a variety of stimulating programs and opportunities for industry leaders to network with one another, as well as interact with faculty and students. Fall Meeting At the Fall 2006 board meeting, an array of expert speakers and panelists addressed more than 75 participants with their perspectives on real estate markets. Morris Davis, Francois Ortalo‐Magne, and Stephen Malpezzi shared academic insights into the topic. Doug Poutasse, Chief Investment Strategist, AEW Capital Management, David Shulman, Managing Member, David Shulman, LLC, and Joseph Williams, Principal, Professors Capital presented professional perspectives on real estate markets. Through a program called “Sound Strategies: Understanding the Art of Strategy, Collaboration and Market Insights,” music was used metaphorically at the dinner presentation as a way to teach business strategy. Developed by Kay Plantes, a corporate strategist, and Stephanie Jutt, a professor in UW‐Madison’s Music School, the program joins each partner’s talents in creating a highly original presentation. Violin and flute clash loudly making an important point about the importance of collaboration in creating harmonious chamber music, while reinforcing the importance of collaboration in doing good business. Spring Meeting Our Spring 2007 board meeting was held in conjunction with the renaming of the Center after James A. Graaskamp. To read more, please see page 5. For the 2008, our Spring meeting will be held on April 10‐11, 2008 at the Gleacher Center in Chicago. Based on member feedback, both our meetings were very successful in terms of program topic, speaker quality, venue, and overall experience. We believe that provision of first‐rate programs like this is essential to attract and maintain a first‐rate membership. - 26 -
CENTER FOR REAL ESTATE BOARD OF ADVISORS Lifetime Members (Substantial Gifts to the Center) Michael Arneson, Managing Principal, TOLD Development Co. James Curtis, Principal, The Bristol Group Charles Heath, President & CEO, Horizon Development Group, Inc. E.J. Plesko, President, E.J. Plesko & Associates Fred Petri, President, Housing Capital Co. Bryant Wangard, Partner, Wangard Properties Wisconsin Realtors Association Norman Flynn, President, Norman D. Flynn Associates, Inc. James Imhoff, Chairman & CEO, First Weber Group, Inc. Dan Lee, Vice President, First Weber Group, Inc. William Malkasian, President, Wisconsin Realtors Association Honorary Members Chuck Carpenter, Assistant Investment Director, State of Wisconsin Investment Board Christine Dicks, Director, Wisconsin Real Estate Alumni Association Michael Komppa, President, Wisconsin Real Estate Alumni Association Wendall Kurtz, Managing Director, Allianz of American, Inc. (current WREAA President) Fred Prassas, President and Co‐Founder, Property Management Concepts, Ltd. Robert Severance, Investment Director of Real Estate, State of Wisconsin Investment Board Student Representatives (Co‐Presidents of the Real Estate Club) Jacob Maliel John Minahan Emeritus Members Frank MacDougal Eugene Skaggs, Managing Director, Northwestern Mutual Life Insurance Co. Sponsor Members ‐ $10,000 Annual Gift to the Graaskamp Center E.J. Burke, Executive Vice President, KeyBank Thomas McCahill & James Mazzarelli Managing Directors, Transwestern Realty Finance Partners, LLC Jeff Raymond, President, Raymond & Associates Sustaining Members ‐ $6,000 Annual Gift to the Graaskamp Center Robert Bond, President, Bond Companies Karen Case, Executive Vice President & Trish Kelly Executive Vice President, LaSalle Bank Derek Chen, CEO, Chenco Holding Co. David Clark, Vice President of Real Estate Investment, Northwestern Mutual Kevin Crummy, Vice President, Eastdil Realty Co. Larry Duggins, President and COO, ARCap REIT, Inc. Larry Freed, President, Joseph Freed and Associates LLC & Barry Kaufman Consultant - 27 -
CENTER FOR REAL ESTATE BOARD OF ADVISORS Lynn Gray, Senior Vice President & Raymond Mikulich, Managing Director, Lehman Brothers Jon Haahr, Managing Principal, Silver Portal Capital, LLC Joseph Hoesley, Division Head of Real Estate, U.S. Bank National Association Michael Husman, Managing Principal, Equibase Capital Group, LLC Bruce Johnson, Managing Director & CFO, Regency Centers Corp. Barry Kaufman, Divisional Vice President of Real Estate, Joseph Freed & Associated LLC Stephen Lebovitz, President, CBL & Associates, Inc. David Lenz, Chairman & CEO, The North Central Group Raymond Lewis, EVP and CIO, & Vince Cozzi, Vice President Acquisitions, Ventas Health Care Properties James Martell, President & CEO, Ridge Realty Trust Robert Michaels, President & COO, General Growth Properties, Inc. Daniel J. Minahan, President, Continental Properties Co., Inc. James Muir & Milda Roszkiewicz, Executive Vice President & Senior Vice President, Wells Fargo Real Estate D. Devon Osborn, Senior Vice President, M&I Bank Arthur Pasquarella, Executive Vice President & COO, BPG Properties, Ltd. John Petrovski Managing Director & Rob Kukulka Director, Merrill Lynch & Co. Tim Pire, Managing Director & Steve Bailey Co‐Managing Director, Heitman Real Estate Securities, LLC David Wall, President, GLL Properties, Inc. Patron Members ‐ $3,500 Annual Gift to the Graaskamp Center Claude Ballard Jean Barden, Head of New York Representative Office, DG HYP David R. Brown, President & CEO, ORIX Real Estate Capital, Inc. Michael Cantwell, President, Johnson Capital Group of Colorado Brian Carey, Vice President of Development, United Properties Lynn Cherney, Partner, Spencer Stuart Richard Cline, Chief Executive Officer, Hometown America Gerald Cohen, COO, The Ackman‐Ziff Real Estate Group, LLC Andrew Deckas, Chief Investment Officer, Opus Corporation Steven Disse, Senior Vice President, Colliers, Bennett & Kahnweiler, Inc. Michael Feiner, President, Feiner Enterprises David Friedman, Executive VP, Fund Management, Wrightwood Capital John Gates, Jr., Chairman & CEO, PortaeCo LLC George Gialamas, CEO, The Gialamas Company, Inc. Robert Gifford, Principal, AEW Capital Management, L.P. Mark Goodman, President, Mark Goodman and Associates, Inc. James Grusecki, President, Northern Builders, Inc. James Haft, Counsel, Holland & Knight Patrick Halter, Chief Executive Officer, Principal Capital Real Estate Investors LLC Jon Hammes, Managing Partner, Hammes Company Peter Hitch, Partner, Urban Associates - 28 -
CENTER FOR REAL ESTATE BOARD OF ADVISORS (continued) David Joseph, Principal, Walton Street Robert Karner, Executive Director, Morgan Stanley Daniel Larson, Senior Investment Officer, CUNA Mutual Group David Lentz, Vice President, Green Courte Partners, LLC Aron Levine, Regional Executive‐ Midwest, Bank of America Michael Luecht, President & CEO, ML Realty Partners LLC Duane Lund, Managing Partner, The Geneva Organization Dave Maki, Head of Capital Markets, RREEF Craig Manske, President, Development Solutions James Muir, Executive Vice President, Wells Fargo Steven Myers, Senior VP, AEGON USA Realty Advisors, Inc. David Neithercut, President & CEO, Equity Residential Lee Pollock, Director, Stark Investments Quintin Primo III, Co‐Chairman, CAPRI Capital Limited Partnership Scott Ransom, President & CEO, Marshall Erdman & Associates Kim Redding, CEO, K.G. Redding & Associates James Ring, President, Park Towne Development Corp. David Rubin, Managing Director, BMO Capital Markets Steve Semingson, Chief Executive Officer, Civic Partners Timothy Sherry, Principal and Head of the Real Estate Consulting Group, Suby, Von Haden & Associates James Smith, Managing Principal, Kensington Realty Advisors, Inc. Richard Sokolov, President & COO, Simon Property Group Martin Stern, Executive Vice President and Managing Director, US Equities Dave Stroik, President/CEO, Zimmerman Architectural Studios, Inc. David Tomfohrde, Senior Vice President, Draper and Kramer, Inc. Terrence Wall, President, T. Wall Properties Hugh Zwieg, President and CEO, Wind Realty Partners Faculty Fellows Steve Born, Professor, Urban and Regional Planning, UW‐Madison Daniel Bromley, Professor, Applied Economics, UW‐Madison Richard Heymann, Faculty Associate, Law School, UW‐Madison Jack Huddleston, Professor, Institute for Environmental Studies, UW‐Madison Harvey Jacobs, Professor, Institute for Environmental Studies, UW‐Madison Antonio Mello, Professor, Finance, UW‐Madison Thomas W. Mitchell, Law School, UW‐Madison Harvey Rabinowitz, Professor, Department of Architecture, UW‐Milwaukee Andy Reschovsky, Professor, Applied Economics, UW‐Madison - 29 -
MEMBERSHIP LEVELS BOARD OF ADVISORS (continued) Sponsor Members: $10,000 • Sponsor members designate two official representatives (total) who are eligible to serve on the Board and on the Executive Committee. • Members will be invited to attend the fall and spring board meetings (at no additional cost) to receive an update on educational and industry‐relevant research initiatives and to meet with colleagues to discuss the important issues facing the industry. • Members also receive invitations to symposia on topics relevant to the industry; and preferential enrollment in our real estate executive education courses at a 20% discount for an unlimited number of their employees. • Members will have access to the Academic and Executive Director of the Center, and through them, to the faculty on matters of specific interest to them or their firms. • Sponsor members can also be involved with certain student projects and receive special access to selected databases through the Center. • Sponsor members will receive special recognition in our newsletter. At the Sponsor Level, you have the ability to designate up to $4,000 (of your $10,000 gift) for the following initiatives/programs: AREIT or International Programs. You will be identified as a sponsor for the selected initiative/program. Sustaining Members: $ 6,000 • Sustaining members designate two official representatives (total) who are eligible to serve on the Board. • Members will be invited to attend the fall and spring board meetings (at no additional cost) to receive an update on educational and industry‐relevant research initiatives and to meet with colleagues to discuss the important issues facing the industry. • Members also receive invitations to symposia on topics relevant to the industry; and preferential enrollment in our real estate executive education courses at a 20% discount for up to ten of their employees. • Sustaining members can also be involved with certain student projects and receive special access to selected databases through the Center. Patron Members: $ 3,500 • Patron members designate one official representative who is eligible to serve on the Board. • Members will be invited to attend the fall and spring board meetings (at no additional cost) to receive an update on educational and industry‐relevant research initiatives and to meet with colleagues to discuss the important issues facing the industry. • Members also receive invitations to symposia on topics relevant to the industry; and preferential enrollment in our real estate executive education courses at a 15% discount for up to five of their employees. We also offer a Non‐Profit Membership for $1,000. Benefits are the same as the Patron level. - 30 -
BOARD MEMBERSHIP AND PROGRAMS What Our Members are Saying About Their Experience with the Center for Real Estate . . . “We live very busy lives. How we prioritize our efforts is critical to each and every one of us. Making the UW Center for Real Estate a priority is truly an enriching experience. What better experience than to see and meet first hand the brightest and best in terms of people talent in the industry from students (our future leaders) to the current industry leadership of alumni and friends of the real estate program. The insights and fresh energy created from this interaction is very special to me as a Board member.” Pat Halter CEO Principal Capital Real Estate Investors LLC Des Moines, IA “Being a member of the Center Board has been very rewarding to me both professionally and personally. Professionally, it provides me with an opportunity to network with the best minds in real estate and stay updated on current trends and industry direction. Personally, it gives me the opportunity to “give back” to the real estate program that provided a life altering experience for me. If I had not met Jim Graaskamp back in 1977, I may not have chosen real estate as a profession. It also allows me to meet the students and assist them with advice and direction that was not available to me when I was in school. We all have a duty to help shape the future and the University of Wisconsin Real Estate Center Board provides me the opportunity to help on multiple fronts.” Craig Manske President Development Solutions Chicago, Illinois - 31 -
MARKETING The Center continues to focus on “brand awareness” through its marketing and PR efforts. The renaming of the Graaskamp Center received news coverage from a wide variety of local and regional media outlets. In addition, several trade groups featured the news of the Graaskamp Center dedication ceremony in summer and fall newspaper and magazine issues. These include The Minnesota Real Estate Journal, the Pension Real Estate Association, and the Counselors of Real Estate. Website and E‐Newsletter The Center’s website is being redesigned to provide more news and feature stories on students, faculty and alumni. An electronic newsletter is being developed and is slated to be complete before the end of the 2007. The newsletter will provide updates on all aspects of the Wisconsin Real Estate Program and will be shared with alumni, board members and friends of the program. Faculty in the News Our faculty often serve as subject experts on housing and real estate. Some of the media features include: Stephen Malpezzi • The Wisconsin State Journal quoted Stephen Malpezzi in an article about the renaming of the James A. Graaskamp Center for Real Estate. Malpezzi said of the late Professor Graaskamp, “He saw real estate development not just as a moneymaking operation but something that had to be done right for the good of society.ʺ April 14, 2007. • The Wisconsin State Journal quoted Stephen Malpezzi and Francois Ortalo‐ Magné, Associate Professor of Real Estate, in an article about putting your home on the market. April 16, 2007. • Stephen Malpezzi spoke to the Madison Downtown Rotary Club on March 8 about possible risks to Madisonʹs real estate market, which involves considerable foreign investment. • The Milwaukee Journal Sentinel quoted Stephen Malpezzi in “Property values in state jump nearly 10%.” The article discusses the recent increase in Wisconsin property values. August 15, 2006. • The Milwaukee Journal Sentinel quoted Stephen Malpezzi in “Housing Values Slow Suddenly.” The article discusses the recent slow down in the housing market. September 5, 2006. François Ortalo‐Magné • A Milwaukee Magazine article about HomeVesters, the company whose slogan is, “We buy ugly houses,” quoted Francois Ortalo‐ Magné. He said of the company, “Itʹs clever, these guys are like used car dealers they facilitate liquidity in the market.” August 1, 2007. • The Milwaukee Business Journal quoted Francois Ortalo‐Magné, Real Estate and Urban Land Economics, about a study he co‐authored on the “for sale by owner” real estate market in Madison. July 6, 2007. • Bloomberg.com featured Ortalo‐ Magnéʹs study about the “for sale by owner” real estate market. August 20, 2007. • The New York Times quoted Francois Ortalo‐ Magné about a study he co‐authored on the “For Sale by Owner” market in Madison. June 8, 2007. - 32 -
MARKETING (continued) François Ortalo‐Magné (continued) • CNN Money reported on a study co‐authored by Francois Ortalo‐Magné, concerning the “for sale by owner” market. June 8, 2007. • The Wisconsin State Journal quoted Stephen Malpezzi and Francois Ortalo‐ Magné in an article about putting your home on the market. April 16, 2007. • The Milwaukee Journal Sentinel quoted Francois Ortalo‐Magne in ʺThe Real World.” The article discusses emerging markets and their expansion potential for teaching and learning by housing professionals. February17, 2007. • The Milwaukee Journal Sentinel quoted Francois Ortalo‐Magne in ʺSmaller lots? Maybe if we offer the neighbors some upside.ʺ The article discusses zoning and how it affects affordability. January 30, 2007. • The Los Angeles Daily News quoted Francois Ortalo‐Magne in ʺForeign Real Estate Investors still like L.A.” The article discusses the preference for foreign investments in commercial real estate in L.A. January 28, 2007. • The New York Observer quoted Francois Ortalo‐Magne in ʺCity Tops for Foreign Commercial Real‐
Estate Investment, Survey Says.ʺ The article discusses the preference for foreign investments in commercial real estate in L.A. January 24, 2007. Morris Davis • The Miliwaukee Journal‐Sentinel interviewed Morris Davis for a series on subprime mortgage woes. ʺEveryone on the property ladder is affected,ʺ he says. ʺForeclosure fallout to spread,ʺ March 24, 2007. • The MSN Money website quoted Morris Davis in ʺNo end to housing slump.ʺ ʺI think we are in for another three years of below‐average (growth) for house prices and residential real estate investment,ʺ Davis said. March 2, 2007. • The Milwaukee Journal Sentinel quoted Morris Davis in ʺNeighborsʹ Two Cents: Too Costly.ʺ The article discusses the acceptance of affordable housing. January 27, 2007. • The Wall Street Journal quoted Morris Davis in ʺLandʹs Slippery Slopeʺ in the December 22 issue. The article discusses the current roller‐coaster ride in land prices. • RealEstateJournal.com cited Morris Davis in ʺLand Prices Increasingly Drive Housing Markets, Fed Study Says,ʺ in the June 22, 2006 edition. The article discusses land prices and their effect on the housing markets. • BusinessWeek Online quoted Morris Davis in ʺLand Swings Home Prices.” The article showcases Davisʹ Federal Reserve research paper ʺThe Price of Residential Land in Large U.S. Cities.ʺ June 26, 2006. • Morris Davis is highlighted in ʺFed Study: Land Prices Increasingly Drive US Housing Marketsʺ in the June 20 issue of the Dow Jones Capital Markets Report. The article showcases Davisʹ Federal Reserve research paper ʺThe Price of Residential Land in Large U.S. Cities.ʺ • Morris Davisʹ working paper ʺThe Price of Residential Land in Large U.S. Citiesʺ was picked up by the Dow Jones News Wire and is highlighted in the June issues of Business Week Online and The St. Petersburg Times. • Morris Davis is cited in ʺHomes for sale but not for a songʺ in the August 17 edition of The Christian Science Monitor Online. The article discusses home prices in the slowing real estate market. - 33 -
MARKETING (continued) Timothy Riddiough • Timothy Riddiough of the James A. Graaskamp Center for Real Estate is quoted in ʺState Sees Cash Cow in Government Buildingsʺ in the February 6 online article from channel 27 WKOW. The article discusses the plan to sell a government building to generate cash and additional property taxes. • The Capital Times quoted Timothy Riddiough in ʺUrban abodes: Downtown condo dwellers love it.” The article discusses the downtown Madison condo market, including commentary from current condo owners. February 2, 2007. • Timothy Riddiough is quoted in ʺSmall Banks, Big Risksʺ in the February 6 online article from channel 27 WKOW. The article discusses the issues that arise from the increased tendency of small banks to make commercial real estate loans. • Keynote speaker at the National Real Estate Forum. • Quoted in a number of media outlets, including the Wall Street Journal, Financial Times, SmartMoney Magazine, and the Chicago Tribune. • Featured in PREA Quarterly on the topic of Human Capital Trends in Real Estate. - 34 -
EXECUTIVE EDUCATION UPDATE During the 2006/07 academic year, six executive education courses were offered by the Center for Real Estate. Course enrollments remained steady and the program produced a profit of approximately $25,000 (includes covering salary/benefits overhead). In addition to providing a small but steady profit, we feel that intangibles such as visibility, industry outreach and public relations are major benefits associated of our executive education program. Also, in the Wisconsin tradition of real estate, our roster of exec ed instructors are outstanding, including alums: Jay Sa‐Aadu and Nino Pedrelli. New applications will no longer be accepted for the Real Estate Certificate Program. This change in direction will allow us to more effectively focus our limited financial and human resources on achieving the goals outlined in our strategic plan. In keeping with these goals, we are reviewing several potential new programming initiatives aimed at the high‐level real estate executive. This may include a new leadership program, targeting different new locations, and extending our training efforts to firm‐specific, custom tailored courses to create new connections with private industry and professional associations. We see custom programming as the most likely “product line” for increasing executive education revenues. 2006/07 Professional Education Courses • Managing Construction Projects • Controlling Construction Costs • Introduction to Commercial Real Estate Development • Law and the Real Estate Professional • Real Estate Investment and Feasibility Analysis • Commercial Real Estate Finance - 35 -
IN THE CLASSROOM: 2006/07 Faculty & Lecturer Guest Speakers The Center gratefully acknowledges the many industry professionals who contributed their time and talent to supporting the Real Estate Program. Some of last year’s speakers include: David Altig, Vice President and Associate Director of Research, Federal Reserve Bank of Cleveland Joe Betlej, VP & Portfolio Mgr, Advantus Capital Mgmnt, Minneapolis (MS 1985) David Bornstein, Vice President, Oculus Development, LLC (MBA 1996) Joe Bowar, Senior Vice President & CIO, Wind Realty Partners (MS 1994) Jim Bradley, President, Home Savings & Loan, Madison Fred Campbell, President/CEO, The Cascade Group (Alum) Susan Chapman, Global Head of Operations, Citigroup Realty Services (MBA 1998) Mike Conaghan, Vice President, Marshall Bankfirst, Madison (MS 1991) Ralph Cram, Vice President, Bond Companies (MS 1987) Jim Curtis, Principal, Bristol Group, INC (MS 1976) Margie Custis, Managing Director, Principal Real Estate Investors Larry Duggins, Executive Managing Director and Co‐Head of the Commercial Real Estate Group at Centerline Capital Group Chris Fiegen, Analyst, Equity International Properties Sally Gordon, Senior Vice President, Moodyʹs Investors Service Jon Hammes, Managing Partner, Hammes Company (MS 1974) Chuck Heath, President & CEO, Horizon Development (MS 1983) Manny Jimenez, Staff Director of the World Development Report Team, World Bank Robert Karner, Executive Director, Morgan Stanley (MS 1989) Paul Lenhart, President, The Lenhart Company (MS 1985) James Martell, CEO, Ridge Property Trust, Chicago (BBA, 1974) Ron Mastalski, Strang Architects, Madison James Mazzarelli, Managing Director, Transwestern Realty Finance Partners (MS 1989) Todd McGrath, President, McGrath Associates Mike Nemlich, Principal, JanMar Realty Kevin OʹDriscoll, SVP & Marketing Mgr. Commercial RE (MS 1996) Brad Olsen, Atlantic Partners, Ltd. EJ Plesko, President, E.J. Plesko & Associates Alex Prombaum, Merrill Lynch Capital Jeff Raymond, President, Raymond Management (MS 1972) Tonia Rumrill, VP, Harrison Street Real Estate Capital, Chicago (MS 2003) Craig Stanley Robert Stoehr, Chairman, RHS Companies (BS 1991) Peter Tan, Strang Architects, Madison Greg Uhen, President, Eppstein Uhen Architects, Milwaukee/Madison Terrence Wall, President, T. Wall Properties Mgmnt Group, Madison (BA 1987, MS 1989) - 36 -
GRAINGER HALL ADDITION Architectural Drawing of the Graaskamp Center on Fourth Floor of the New Grainger Hall Addition
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YOUNG ALUMNI PERSPECTIVES Why do so many of the best and brightest young professionals chose Wisconsin’s MBA Real Estate Program over any other? We’ve asked them to give you the answer. Shampa Bhattacharya MS 2002, Real Estate & Urban land Economics Perry Capital New York, NY Educational Background: B.S. Jadavpur University, Calcutta, 1994 M.S. Architecture and Construction Management from the School of Planning and Architecture, New Delhi, 1996 Professional Experience Shampa joined Perry Capital, a hedge fund based in New York, in 2002. While attending School she worked as a summer intern with the strategic advisory group at Cushman & Wakefield in New York. Prior to that, she worked with ITC Ltd. in India for four years. “The UW Real Estate program shaped me in many ways toward my career. Probably the most valuable part of the program was the strength and depth of the course work and the accomplished faculty, which provided me with a strong knowledge base to start in the industry. Also, I truly enjoyed the camaraderie of the real estate club where I made some great friends and contacts. But the experience, which helped me most directly in my work, was the time spent in the ARESAP program ‐ the practical application focus of the program, the deliberations within the group, as well as the interaction with the distinguished advisory board members provided an invaluable experience and made me well qualified for the intensely competitive industry I am in.” David Gevers MBA 2006, Real Estate and Urban Land Economics E.J. Plesko & Associates, Inc., Associate Madison, WI Educational Background B.A. Architecture, University of Southern California Professional Experience David’s responsibilities include overseeing construction, development and financial analysis of new investment opportunities. During the summer between his first and second year of the MBA program, he interned with the Bascom Group, in multifamily acquisitions. His prior work experience includes design and project management for high‐end apartment renovations in New York City and various commercial projects in New York and Los Angeles. “The best thing about the UW Real Estate program – besides the strong alumni network – is how well the program prepares you for a career in Real Estate. Whether in the public, private, global or local markets – the UW Real Estate MBA program gives you an in‐depth and comprehensive knowledge of Real Estate.” - 38 -
KEY FACTS Top Rankings. Wisconsin is consistently ranked among the very best real estate programs in the country. Our graduate program placed third in the nation in U.S. News and World Report’s most recent ranking of real estate programs. Active Alumni Network. Program graduates stay involved long after graduation. The Wisconsin Real Estate Alumni Association is a strong and active network of more than 1,600 professionals. They play an active roll in networking with students, as well as participating in class lectures and projects. Challenging Curriculum. Our curriculum is the most comprehensive of any real estate program in the country and is made possible by the depth of our faculty, our expert team of adjunct professors/lecturers and support in conjunction with a new school‐wide MBA program structure. The Applied Real Estate Security Analysis Program (ARESAP), a unique track within the Real Estate MBA, is the first program of its kind in the country, providing a team of MBA students the opportunity to manage a $1 million portfolio invested in REITs. Dedicated Staff. The Center and Department has an involved and experienced staff that caters to the individual needs of students, alumni and employees. 100% Job Placement. The MBA Class of 2006 had 100% job placement (not including our two international students who returned to their home countries). Top companies regularly recruit. Unique International Opportunities. The Center now offers the most in‐depth international experience of any real estate program in the country. Both first‐year and second‐year MBA students participate in unique studytrips abroad giving them the opportunity to learn firsthand about current issues in international real estate. Strategic Partnerships with Industry. Students and faculty are connected with top level professionals in industry through the Center for Real Estate Board members. The Center also engages the larger real estate community by developing academic and executive education programs that will meet the needs of the industry today and well into the future. - 39 -
CENTER STAFF & CONTACT INFORMATION Center for Real Estate University of Wisconsin‐Madison School of Business Grainger Hall 975 University Avenue Madison, WI 53706‐1323 www.bus.wisc.edu/wcre Tim Riddiough Academic Director Phone: 608/262.3531 Email: [email protected] Michael Mihelbergel Executive Director Phone: 608/261‐1358 Email: [email protected] Lee Gottschalk Associate Director Phone: 608/265‐2032 Email: [email protected] UNIVERSITY OF WISCONSIN-MADISON
SCHOOL OF BUSINESS
CENTER FOR REAL ESTATE