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New Faculty Interview - Alina Arefeva

Posted By David Walsh, Greystar, Tuesday, December 4, 2018

Assistant Professor Alina Arefeva joined the Department of Real Estate and Urban Land Economics faculty in May of 2018. Prior to UW-Madison, Arefeva taught real estate investment and development at the Johns Hopkins Carey Business School. She received her BA in Economics from Higher School of Economics (HSE) and MA from New Economics School, both in Moscow, and her Ph.D. in Economics from Stanford University. She has served as a Summer Economics Fellow at the Federal Reserve Bank of Chicago, and currently focuses her research on implications of search frictions for house prices.


Dr. Arefeva, welcome to the University of Wisconsin-Madison. After studying, researching, and teaching in such diverse locations, what excites you to join the team at the Wisconsin School of Business?

My colleagues here are the leaders in real estate research and their feedback is crucial for my work. I have the opportunity to teach smart students who are passionate about the same topic as I am - real estate.


How have your global experiences impacted your view on real estate, research, or academics?

When I have searched for my first home in Moscow, I realized how long it takes to buy and sell a home, and this time is related to the sales prices. Moreover, market could be either completely stale or very hot with many transactions.  I have got excited in studying the interaction of the search frictions and the price formation process which is my research agenda.


Would you please explain to WREAA Blog readers your research focus of residential real estate search frictions?

I work on real estate, finance, and macroeconomics. I am focusing on how buyers and seller interact in the housing markets, and how this affects the final prices. In recent years, we see more frequently bidding wars between buyers, i.e. when there are many buyers interested in the same house. Buyers decide on their best offers and submit to a seller, and the seller typically sells to the highest bidder. I study the implications of this process for the formation of prices. For example, in one of my papers, I show that the price volatility is higher if houses are sold in bidding wars as opposed to one-to-one negotiation which helps to understand the puzzle of the excess volatility of house prices. In another paper, I study how the seller should structure the selling procedure to get the highest house price.


In a still young career, you have already been given numerous awards and grants and been invited to present at many conferences. What stands out as a highlight of your career thus far?

It is always the people: my colleagues and students.  


What has been a highlight of your fall in Madison?

Meeting the UW students and faculty! They are incredible, and I am happy to be part of the school.


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Incoming Real Estate Club President Justin Kremers

Posted By David A. Walsh, Thursday, November 29, 2018


Justin Kremers, 2019 MBA Candidate, will be a Co-President of the Real Estate Club next semester. Justin is from Wheaton, Illinois, and graduated from Calvin College in 2012 with degrees in English and Architecture. In this brief interview you’ll find out what brought him to UW, what his goals are for post-graduation, and his hobbies and interests!


What is your career experience prior to the Wisconsin MBA program?

Upon graduating from Calvin College, I worked as a business manager for a large painting contractor and ran operations in the Grand Haven area of Michigan for about a year. After that I worked as a project manager in the Meijer corporate offices in Grand Rapids, working on private label branding projects. I was at Meijer for about 4 years before coming back to school to get my MBA.


What motivated you to pursue an MBA in Real Estate?

While I enjoyed my job prior to coming back to school, I did not feel like it was the right fit long term and wanted to pursue a different career path. I have always been interested in real estate and the built environment and had been researching several different MS real estate programs and MBA programs. For me, the Wisconsin program was the perfect fit as it gave me the business education along with a very comprehensive real estate education.


What topics within real estate interest you the most?

I’m very interested in private equity investment/acquisitions and commercial development.


What are your post-graduation goals?

Geographically I am primarily looking at either Chicago or Michigan, specifically the Detroit or Grand Rapids area. I am open to other locations but will be targeting those two areas. Ideally, I would like to find something in development or in private equity on the acquisitions side and I would love to work for a company that does a variety of different projects within different asset classes. My ideal role, post-graduation, would be either a development associate or acquisitions associate.


How has your WREAA membership been beneficial so far?

I have used my WREAA membership to reach out to graduates of the program, both MBA and BBA. The strong network within the real estate program is one of the reasons I chose Wisconsin for my MBA education and have found it very helpful. The connections and advice I’ve received from WREAA members has been invaluable for me.


What has been your favorite experience with the Real Estate Club or WREAA?

My favorite experience with the Real Estate Club was last fall when we had the opportunity to tour the new Wrigleyville development in Chicago. I grew up going to baseball games at Wrigley so being able to tour the new hotel development and work going on at the field last November was very exciting.


What are your interests and hobbies outside of school?

Living in Wisconsin for the past year and half, I have really grown fond of eating cheese curds and playing darts with other MBA students. When I’m not doing school work, I enjoy staying active, playing soccer and golf and training for triathlons (although I haven’t had much time for that while in school). I also have been playing guitar since the 8th grade and really enjoy playing/recording music when I have time.

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Incoming Real Estate Club President Brian Cleary

Posted By David Walsh, Greystar, Tuesday, November 20, 2018


Brian Cleary, Spring 2019 Co-President of Real Estate Club, is from Arlington Heights, Illinois. Brian received a Bachelor of Science in Architectural Engineering from the University of Colorado-Boulder in 2011. Read on to learn more about one of the club’s new leaders!


What is your career experience prior to the Wisconsin MBA program?

Prior to coming to UW, I worked for a private Building Engineering firm in San Diego.  As a Professional Mechanical Engineer, I designed mechanical, electrical, and plumbing engineering systems for a variety of property types including Government (NAVFAC, USACE), Hospitals, Office Buildings, and Life Sciences.  I also helped start a Construction Management division representing municipalities who manage multiple properties.


What motivated you to pursue an MBA in Real Estate?

I wanted to move from the consulting side to the owner side.  I also wanted to work on my financial skill set and thought a Real Estate focused MBA would provide me with the best opportunities.  Being from Chicago, I had heard so many great things about the UW program and the alumni connections it provides.  After speaking with some alumni, my decision became fairly easy.


What topics within real estate interest you the most?

With a background in construction, development of sustainable buildings has always interested me.  I also have an interest in international real estate investment. 


What are your post-graduation goals?

I plan to work in acquisitions and development.  This summer I worked for a private equity real estate fund working on value-add acquisitions which I really enjoyed.  The mix between finance and construction is great.


How has your WREAA membership been beneficial so far? 

It has been great.  The alumni base is very strong and always willing to take time for a coffee chat or phone call with a student.  I have contacted several alumni who are in WREAA for career advice and mentorship.  I know WREAA helps us in planning our semi-annual Real Estate Club trips which is very appreciated.


What has been your favorite experience with the Real Estate Club or WREAA?

The Real Estate Club trips are by far my favorite experience.  Last spring the Real Estate Club went to Boston which was very interesting.  We met with such a great variety of companies that gave us broad exposure to the Real Estate Industry.  We hope that in addition to the Real Estate Club trip in the spring, we can do another trip to Milwaukee or Chicago to give more club members an opportunity to interact and hear from industry professionals.  The classroom is important, but applying this to the real world and hearing from practitioners is invaluable.


What are your interests and hobbies outside of school?  

I have a Shepard/Husky mix dog that takes much of my time outside of school.  I stay active and play basketball and golf as much as I can.  I travel internationally whenever I can.  I have an Advanced SCUBA Certification and have dove all over the world.   

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New Faculty Interview - Dr. Mark J. Eppli

Posted By David Walsh, Greystar, Tuesday, November 6, 2018


Dr. Mark J. Eppli was appointed Director of the James A. Graaskamp Center for Real Estate this Fall. Dr. Eppli returns to UW-Madison, where he received his BBA, MS, and Ph.D. degrees, after serving as a professor of finance and Bell Chair in Real Estate at Marquette University and teaching at the George Washington University for eleven years. While at Marquette, Dr. Eppli started the real estate program and brought it to national recognition by U.S. News and World Report. There Dr. Eppli also served as Interim James H. Keyes Dean of Business Administration from 2012-2015. He has co-authored two books on real estate, been recognized as a foremost real estate policy expert and Distinguished Fellow by NAIOP, and received awards for his efforts to attract minorities to the real estate profession.


Dr. Eppli, welcome back to the University of Wisconsin. After a very impressive tenure at Marquette University, what excites you most about your return to the Graaskamp Center for Real Estate?

Thank you, it’s great to be home. I’m surrounded by very welcoming and impressive colleagues, so it feels great to be back. Two of my primary responsibilities here are to put together a three to five-year strategic plan and steward the MS degree proposal through the University approval process alongside Sharon McCabe, both of which I’m excited to work on. The MS proposal is well underway, and the three to five-year strategic plan is in its early stages but will heavily consider the desires of our alumni. I’m excited to get on the road to visit our alumni and ask what they are passionate about, and then brainstorm how to get those initiatives into our program. We want all of the stakeholders on board with our mission, vision, and strategic plan.


As you mentioned, you are leading the efforts to reestablish the MS degree as soon as the fall of next year. What is the reasoning behind offering an MS degree again and how will it differ from the currently offered MBA program?

It helps to start by asking why the MS degree went away. It went away in 2005 when the school folded all the master’s degrees into the focused MBA program we have now. Now 13 years later, we have a new generation of young adults who, with the current state of the economy and job availability, are less interested in going into the work force for two years before returning for an MBA. A fair number of students want a quick hit degree, maybe in the format of a four plus one (i.e. four years of undergraduate and one year of graduate study). By quick hit degree I mean a program with a focused curriculum where students learn the technical aspects of commercial real estate and apply them. Think of it as a great complement to an engineering or economics degree, among many others here at the University of Wisconsin-Madison. Also, the UW system graduates over 5,000 business majors each year.  The MS is a great way to round out an education, after four years at a school in the UW system to come to the flagship university for the additional year and degree. We’re really going back to the future. A clear majority (90-95%) of our master’s grads before 2005 were MS students. The alumni want to bring the MS back, and I think the University and School want to bring it back as well.


As for why we are planning to offer the degree, I think it rounds out our curriculum offering. This year, we have 449 BBAs in real estate. In 2011-2012 there were 134. The growth in real estate majors is amazing.  One reason might be because the BBA program in real estate was ranked the best public-school real estate program in the nation by US News & World Report, second best overall. We have Wharton one ahead of us, and Berkeley one behind us on that list –  That’s a great pack to be running with. Our MBA program is great for students looking for a degree that enhances broader business decision-making and leadership skills, but students typically need to have several years of business experience to be eligible for the MBA program.  In summary, the MS is a great complement to our popular BBA and strong MBA programs.


Your research, leadership, and community involvement have been recognized by numerous organizations. Can you tell us about a particularly proud moment of your career?

I always start with the idea of being a servant leader. As a professional, you can only do as well as those around you, and I have been really lucky to have great people around me. So, I am thankful for those that I have worked with over the years at Marquette University, the George Washington University, and others. A point of pride for me is the establishment and operation of the ACRE program in Milwaukee, but once again, it took many great folks to make it happen. ACRE stands for Associates in Commercial Real Estate, and the program mission is to educate, place, and network minorities in commercial real estate. Our goal is to change the face of the commercial real estate industry by being more inclusive of minorities. The lack of diversity in commercial real estate is striking and worse than almost all other professional fields. I do not mean to suggest that this is driven by racism, but many firms are small, and when they go out to hire talent, they don’t have large interview lists on a campus. They ask within their existing informal networks for recommendations, and those networks sometimes aren’t as diverse as you would like to see. ACRE consists of six credits across one academic year, where the curriculum focuses on financial and real estate decision making skills. The program has graduated over 250 students. They’ve collectively developed over 1,000 apartment units, three are now aldermen in the city of Milwaukee, three are executive directors for Business Improvement Districts (BIDS) in Milwaukee, and three brothers who all went through the ACRE program started JCP, a minority owned construction company.  In closing, it was the willing support from philanthropic donors to wise instructors to the students themselves that collectively made the ACRE program a success.  


What is your current research focus?

I’m currently looking at holding period analysis for investment portfolios. You learn in finance courses stocks are riskier than bonds, but the standard deviation metrics are for one year, and rarely do we hold retirement portfolios for one year – so why use one-year standard deviation to measure risk.  A more relevant measure of risk is over the likely holding period of the investment. Across time, stocks and real estate returns mean revert, to their long-term return averages, say eight to nine percent. Over a seven-year holding period, average stock annual standard deviation goes from about eighteen percent to six percent and real estate return risk also drops precipitously.  This lower risk profile for stocks and real estate has important implications for the makeup of a long-term investment portfolio and long-term expected returns. 


What has been a highlight of your fall in Madison so far?

As you may know, I have rented an apartment near the Capitol Square and kept our house in Milwaukee until my daughter graduates from high school.  So, my commute each day has me walking past the Capitol and up State Street to the great University of Wisconsin-Madison, which brings back any range of great reflections daily. Also, getting back to the terrace with friends as they return to campus and thinking back on our time here as students is a treat – popcorn is the same, beer selection is better!  

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Fall 2018 Real Estate Club Update

Posted By Mandy Kaegy, Wisconsin Real Estate Alumni Association, Inc., Friday, November 2, 2018
Updated: Thursday, November 1, 2018



As Co-Presidents of the Real Estate Club for the 2018 fall academic semester, we are honored and excited to help shape the future of the Club. Thanks in large part to tremendous support from the WREAA Board, its membership, and the Graaskamp Center faculty and staff, we believe the Club is stronger than ever. Out of a pool of approximately 350 BBA and 18 MBA real estate students, we are proud to have nearly 200 active Club members.


 Fall Speaker Series

The Real Estate Club kicked off the fall semester with a meeting on September 20th, featuring Tan Phillips, Head of Real Estate Strategy at Regions Bank, as our keynote speaker. The meeting was informative and educated students on banking’s role in the real estate process. The second meeting on October 4th was designed to help Club members understand the real estate investment environment within the retail sector. Our keynote speaker was Luke Petherbridge, President and CEO of ShopCore Properties, who did an outstanding job of describing the problems the retail industry is experiencing and how his firm is identifying investment opportunities within the sector. Our most recent meeting occurred on October 25th where Club members were afforded the opportunity to hear from a panel of CEOs representing firms outside of the four most common property types. Panelists included Bill Bayless, CEO of American Campus Communities, Ben Moreland, Executive Vice Chairman of Crown Castle, and Tom Heneghan, CEO of Equity International. Our very own Tim Pire (1990 MS, 1984 BBA) did an excellent job of moderating the panel, and he was able to provide a unique perspective given his experience as a former Managing Director at Heitman and current positions as a Board Member of Monogram Residential Trust and Director of the University of Wisconsin’s Applied Real Estate Investment Tract (AREIT).


The Club will be meeting again on November 15th to present the E.J. Plesko award to James D. Letchinger, President and Founder of JDL Development. Michael Brennan, CEO of Brennan Investment Group and Executive Director of the Graaskamp Center, will be in attendance to present the award to Mr. Letchinger.  Finally, our last meeting of the semester will be on December 4th, and will feature Matt Lucas, a Project Manager with Sterling Bay, who will be highlighting the developments the company is doing in the city of Chicago.


 Fall Semester Club Trip

The Real Estate Club hit the road on October 10th to Minneapolis to get an up close and in depth look at one of most active real estate markets in the Midwest. The Club met with alumni from Ryan Companies, CBRE, Dominium, and Mortenson Development to get a better sense of the market trends within Minneapolis and to tour various projects around the city. Special thanks to Anders Pesavento (2005 BBA), Andrew Twito (2008 BBA), Isaac Accola (2016 BBA), Ryan Watts (2000 BBA), Owen Metz (2006 BBA), Neal Route (2012 BBA), Eric Omdahl (2014 BBA), Nate Podratz (2000 BBA), and Laura Bodine (2012 BBA) for making the trip such a great success.


Over 30 Club members toured ambitious and exciting projects around the city. On the first day of our visit, we led off with Ryan Companies who gave a presentation and tour of their massive Downtown East redevelopment project around US Bank Stadium. Later that morning we met Ryan Watts (CBRE) and his client, Gordy Stofer of United Properties, to learn more about the economic trends affecting real estate and the growth Minneapolis is experiencing in the North Loop submarket. We finished off the day with a presentation and tour of Dominium’s A-Mill Artist Lofts, an incredible redevelopment of the old Pillsbury factory into affordable housing for local artists. We finished off our visit to Minneapolis on Friday morning with a presentation and tour of Mortenson’s apartment development, The Rafter. The Club geared up with hardhats and vests to tour this active development site to get a first-hand look at the construction process and the different amenities being offered in the Class A multifamily developments. Overall, the trip was a tremendous success, and we cannot thank the local Minneapolis alumni and WREAA enough for their critical support.


Other Club Events and Outings

In addition to Club meetings and trips, this semester has also contained numerous networking opportunities for Club members, including happy hour get-togethers as well as a Pontoon Porch outing in late September.  We will be celebrating our graduating seniors with a Graduation Dinner in December, and we have also begun planning our spring semester Real Estate Career Fair, which will be held on February 18th.  If you are interested in hosting a booth for the Career Fair, feel free to reach out to us for more information.


We hope that you will continue to engage with us as we work to enrich the real estate experience at the University of Wisconsin and continue to build upon the strong tradition of the Wisconsin Real Estate Club.  We believe the students benefit greatly from a strong network, and the Club owes a great deal of gratitude for the overwhelming support from WREAA and its membership. In that spirit, we hope now that you have read about our busy semester you will consider engaging with (and hiring!) the Club and its membership. Please reach out to us directly with questions, input, or if you are interested in participating.  Please also feel free to check-in on us via our website at www.realestateclub.org. Thank you!


On, Wisconsin!


Hans Helland (MBA 2019) and Matt Allard (MBA 2019)



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New Faculty Interview - Yongheng Deng

Posted By David Walsh, Greystar, Tuesday, October 30, 2018


Professor Yongheng Deng joined the UW-Madison School of Business Faculty as a Professor of Real Estate and Urban Land Economics, and the John P. Morgridge Distinguished Chair in Business at the beginning of this year. Professor Deng most recently served as the Provost’s Chair Professor of Real Estate and Finance, Director of the Institute of Real Estate Studies, and Head of the Department of Real Estate at the National University of Singapore.


Professor Deng, you had a unique educational experience growing up in China. What happened?

I grew up in China during the “Cultural Revolution.” After one year of high school, then Chinese leader, Mao Tse-tung, closed all schools in China, and I was sent to the countryside to labor in the fields. It wasn’t until 11 years later that I returned to school after Deng Xiaoping reopened them. The hardship of my childhood and disruption in my education have motivated me to work harder and be appreciative of the opportunities I’ve been given. My parents are both educators, and I love being a professor.


How did you become interested in Real Estate?

Deng Xiaoping opened the door allowing Chinese students to study abroad, so I went to UC-Berkeley to attain my Ph.D. in economics. That’s where I met my first mentor, Professor Daniel McFadden, winner of the Nobel Prize in Economic Sciences in 2000, to study Econometrics. I was very fortunate to meet my major advisor and renowned public policy professor John Quigley. He advised me that though I might be at a disadvantage in pursuing econometrics as a theorist compared to my other classmates who were 12 years younger and trained as mathematicians. However, he pointed out that my personal experiences combined with the econometric skills learned from Professor McFadden could make me uniquely positioned to tackle social, economic issues my peers may not consider. Under Professor Quigley’s supervision, I started developing a competing risks hazard model to evaluate the prepayment and default risks in the United States mortgage market. My first job was with the US government in the Office of Federal Housing Enterprises Oversight (OFHEO) before I began teaching at USC.


Your teaching, research, and honors have taken you around the globe from Berkeley to Wharton,  Singapore, and China, only to name a few. What encouraged you to come to Wisconsin?

Following ten years tenure at USC, I taught for nine years at the National University of Singapore. They wanted to grow the real estate program, and I had maintained an interest in the Asian housing market, so I joined their team as the Director of the Institute for Real Estate Studies. I helped recruit talented staff and built one of the leading real estate programs in Asia. Now the program is well regarded, and I was ready to move closer to my family, who live in the United States. Wisconsin real estate program was the right choice because it’s a top program in the nation, I’m close with and respect the faculty here, and I was ready for new challenges.


What new goals do you plan to pursue here at UW?

Sustainable development has gained more attention from real estate developers and academic researchers around the world in recent years. Two years ago, I had an opportunity to co-chair the Singapore Chapter of the United Nation’s Sustainable Development Solutions Network (US SDSN). I am working now with my colleagues at the Wisconsin School of Business, and the Nelson Institute for Environmental Studies on campus to build up a team to make the University of Wisconsin-Madison an academic leader in this emerging field.


You have studied and written about the housing markets in Singapore and China. How do these housing markets differ from the US housing market?

Asian housing markets are unique in many perspectives. Singapore’s government is very active in hands-on managing their housing market, controlling almost 90% of the residential housing market. For example, their leader established a policy which encourages multi-ethnic households to live in the same neighborhood. When a family moves out, they must be replaced by a family of the similar ethnicity to maintain proportions representative of the nation’s ethnic composition within the neighborhood. It’s a way to use housing policy to address ethnic, social issues.

Regarding challenges of housing affordability, Singapore has focused on making housing affordable to the majority, in contrast with the US strategy of making certain housing targeted for the lowest earners. There you can purchase a four- or five-room condo with three to four years’ salary. The Chinese market, on the other hand, has exploded. In Beijing, it costs 15-years couple’s salary to purchase a 90 square meter condo, and families living in some tier-one cities are spending 96% of their monthly income on mortgage payments. Many people think a correction in the Chinese housing market is overdue. I studied this issue and found that it hasn’t happened yet because whereas the US housing bubble burst was largely triggered by over-leveraging, but in China, your first home requires a down payment of 40%. Your second home requires a down payment of 50% or more. As a result, a larger correction is needed to wipe out the equity.

Singapore has also developed a strategy using environmentally sustainable practices in building their urban and real estate space, partly because the city-country lacks natural resource. They’re doing a nice job, and that’s why they are becoming known as a Garden City.


What do we know about China’s housing demands for the elderly, particularly in the wake of the One Child Policy?

The dependency ratio is becoming distorted not only in China but also in other Asian economies, such as Japan, South Korea, and Singapore. With longer life expectancy, lower infant mortality, and delayed marriage, each married couple in China has four parents to take care of. Thus, the retirement savings for the elderly are being gambled in the housing market. Money is passed down to help the youngest married family members purchase a home on the assumption that it will appreciate and provide retirement income. As we all know, real estate is an illiquid investment, so China needs to develop a functional fixed income real estate asset market, such as REITs and MBSs, to meet these investment goals.


You have taught in many academic institutions, received numerous best paper awards across 20 years, and served in leadership positions of many organizations. Can you tell us about an accomplishment that has been particularly special to you?

About five years ago I was asked to chair the World Economic Forum’s Global Agenda Council for Real Estate. That was a unique platform that allowed global stake-holders to discuss challenges facing real estate such as sustainable development and how to finance affordable housing in different parts of the world. It helped me open my eyes to real estate challenges in other parts of the world. Last year, I helped the World Economic Forum to construct the Real Estate Industry Transformation Map which lists eight critical issues in the future real estate industry transformation.


What is one unique part about the University of Wisconsin or the city of Madison that you have enjoyed so far?

I love the farmers' market on Saturday mornings at the capitol, especially the fried cheese!

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An Interview with Distinguished Real Estate Alumnus Award Recipient, David Lenz

Posted By David Walsh, Greystar, Wednesday, October 17, 2018


Dave Lenz, Founder and Chairman of North Central Group (NCG), was awarded the Wisconsin School of Business Distinguished Real Estate Alumnus Award at the 2018 WREAA Biennial. After working as a commercial loan officer, appraiser, and serving fourteen years as an officer in the 115th Fighter Group of the Wisconsin Air National Guard, Dave founded North Central Group in 1981 with the mission to develop, own, and franchise well-known branded hotels. Dave is a graduate of the UW-Madison Real Estate Program, board member of the University of Wisconsin James A. Graaskamp Center for Real Estate, a founding member of the Board of Directors for the Ronald McDonald House of Madison, and volunteers with several other community organizations.


Dave, how did you move from lending and appraisal to development through your career? Was that part of a long-term plan or a goal that developed over time?


I think development is a hard thing to come out of school and start with. It didn’t happen that way in the 70’s, so I needed to get a base first. I majored in real estate and finance, and after taking a two-year break from college to train with the Air National Guard, I came back pretty committed to the real estate path. In my last two years I studied under the great teacher and practitioner Jim Graaskamp and worked part time with a commercial lender. At that time real estate finance had the most jobs open within the industry, and I joined Iowa Securities after graduation. Then a credit crisis hit, and lending dried up. I had the opportunity to go work for a savings and loan association doing appraisal and packaging commercial loans for sale in the secondary market. I got a taste of underwriting in that environment and later got an offer from a mortgage brokerage firm in Madison. A partner at that group was also doing small developments and we decided to do our first motel in 1976 in my hometown of Tomah, Wisconsin, with 90% leverage. I was doing mortgage brokerage and motel development at the same time. When the next credit crunch came in ’79-’80 we had four hotels built. My partner was more of an investor and wanted to focus on the mortgage business, but our hotel work had grown to be worthy of full-time attention. That’s when I founded North Central Group.


Why did you choose to focus on hotels? What do you see as some of the risks specific to hotels that challenge NCG?


My father had built a small motel in Tomah, so I grew up helping work the family business. That’s where I first got the motel bug, but I didn’t think I’d go back to it later in life. Then when I founded NCG, I stuck with hotels because of my background and the family business. I figured doing more than one asset class would be too much as I didn’t have a team at the time. I decided to learn hotels and do it well.


A challenge with hotels is that they aren’t considered core real estate, so we’ve always been given a much higher cost of debt - probably somewhere around 50-100 bps higher than the traditional asset classes. However, on our end it still utilizes the key real estate principles. We need supreme location, the right brand, appropriate financing, and we have to be careful not to overleverage. Hotels are a cyclical business, and not overleveraging helps make it through those cycles. We got a bit overleveraged before the GFC when we could finance at 80-85% of cost. We were rolling deals one to the next with 1031 exchanges and kept growing until we didn’t need partners. But then the GFC hit and lenders were asking you to pay down the debt when you could barely make your original debt service payment. We made it through and we’re more conservative now.


Can you share a story with the readers of the WREAA Network Blog about a North Central Group project that was particularly gratifying?


One of our newer projects, the AC Hotel Madison Downtown, is a site we turned down at first. The dirt was expensive, and we just couldn’t get enough rooms on the site using Courtyard by Marriott or Hilton Garden Inn to make the numbers work. Then another hotel development group put together a plan for the site, which eventually fell through but prompted us to take another look. That’s when we found the AC brand, which was being purchased by Marriott. That was important to us because we have a requirement that we only build national brands. Being a European brand originally, it had smaller guest room square foot requirements, and we were able to add 30-40 rooms to the site. That made the project feasible, but we still had to push through a tough zoning process. We had to prove exceptional design to get a height variance from the city and prove to a neighborhood group that our project wouldn’t cause additional shadows to fall on a Frank Lloyd Wright building on the block. At that point the rooftop restaurant idea in hotels was taking off, and we found Eno Vino with only one location in a strip center on the west side of Madison. We convinced them to do one more location at the top of the AC Hotel where it is now and made sure it matched the finishes and quality of the hotel. We financed the project with a lender that was there with us in the hard times, and the success has exceeded expectations. Now we’re looking for permanent financing before rates keep going up. I think Wells Fargo did a Real Estate Club outing that looked at how you would finance our project. I was happy to see students participate in a hotel case study.


You’ve mentioned flying with the Air National Guard, can you describe that experience?


I joined the 115 Fighter Group of the Air National Guard in Madison. They were taking one or two new applicants per year to be pilots,, and sent me to the air force to train for a year and half. I came back a fully trained fighter pilot, on alert in Madison. We always had two aircraft loaded at the end of the runway ready for a five- minute scramble. We were tasked with guarding the industrial complexes of this region during the Cold War. Most of that mission was at night, so I’d go over there and do homework and sleep, ready to fly when necessary. I stayed in the unit 14 years flying all sorts of planes before leaving the group to pursue my business ventures.


What is your advice for future founders of companies or hotel developers?


I recommend you get experience working for a company that interests you. You don’t make a lot of money in internships, but the experience is invaluable. Make sure you see the breadth and depth of many deals. It’s a great education.

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Luke Petherbridge, President and CEO of ShopCore Properties, Presents to UW Real Estate Club

Posted By David Walsh, Greystar, Wednesday, October 10, 2018


The Real Estate Club recently hosted Luke Petherbridge, President and CEO of ShopCore Properties. Mr. Petherbridge has over 15 years of experience in finance, global real estate, and management. Prior to ShopCore, he worked as CFO and Treasurer of DDR Corp., and prior to that role was the CEO and a Director of EDT Retail Trust.


At a well-attended meeting, Mr. Petherbridge began by putting the commercial real estate market in perspective for students. Of the $48 trillion or so in real estate (the largest asset class in the US), $16 trillion is commercial, $2 trillion is listed, and $300 billion is listed retail properties. Mr. Petherbridge’s objective with explaining these numbers was to provoke thought regarding the relatively small allocation of major funds and endowments to commercial real estate. An outlier, he explained, is the Yale Endowment, which has an allocation of about 11% for real estate and has seen exceptional growth. While describing it as an over-allocation, Mr. Petherbridge says it does show the increase in institutional capital being invested in real estate.


Mr. Petherbridge went on to discuss specifically the retail environment and his thoughts on the adaptations coming soon. For present day, he used Apple iPhone purchases as an example of a brick and mortar store experience still attracting customers. He asked students how many had iPhones, and then how many went to the Apple store to buy it. Many hands were up, and Mr. Petherbridge cited the excitement and fun experience provided by the Apple store for the results. He predicts that retail will continue moving toward an omnichannel experience, meaning you can buy a product on your phone and pick it up in the store or shop the product in the store and have it shipped home.


Another intriguing topic Mr. Petherbridge covered was the transition being made by e-commerce firms into stores. Using Amazon, Warby Parker, and Bonobos as examples, Mr. Petherbridge blamed shipping expectations of consumers and the related cost to companies. He explained the cost of the “last mile” in delivery and reminded students that Amazon has convinced the population that they should get items in two days and not pay for it. No economic model works for that, Mr. Petherbridge argued.


Other topics of the night included big data, REIT valuation, similarities and differences between the US and Australia (Mr. Petherbridge’s place of origin) retail markets, and more. Undergraduates and MBA students alike enjoyed and learned from Mr. Petherbridge’s engaging presentation.  

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UW Real Estate Alumni Entrepreneurs

Posted By David A. Walsh, Monday, October 8, 2018

Last week, I had the pleasure of speaking with Badger alumnus Malcolm Sina about his career in real estate, and specifically his experience founding a development firm. Check out our interview below!


Malcolm S. Sina is the Executive Chairman and Founder of Sina Companies, a real estate development firm focused on the niche market of healthcare properties. Sina Companies has developed projects in more than 30 states, and has also been involved with commercial office, retail, and hotel projects. Malcolm holds a BBA degree with a double major in Finance and Real Estate and an MS in Real Estate Appraisal and Investment Analysis from the University of Wisconsin-Madison.


  • Please share your work experience after graduating from UW, and how it led you to found Sina Companies.

o   I graduated in 1979 during a recession. There weren’t many job opportunities, but I ended up joining The First National Bank of Chicago working in REIT swapping, construction management, and new business lending. Then I got the entrepreneurial bug and found a job opportunity with Steve Fifield, who was setting up his own development company. I was the third or fourth employee there, and Professor Graaskamp was my reference for the job. I was there for about 7 years as the company grew before I joined Aetna Insurance during another recession on their real estate team in Connecticut overseeing a portfolio of southeastern properties. After a couple years there, I got the entrepreneurial bug again and came onboard with DASCO Companies, a group in Florida getting into medical real estate development. They were developing small medical office buildings of about 20,000 SF each, but within a year or two had a contract to develop six buildings at 50k-100k SF each. I worked there as the Chief Operating Officer while it grew to a national firm. When the founders left the company, we had to regrow the business and at one point we partnered with Lehman Brothers, whose stake was later bought out by a REIT. The company grew to about 117 people before we were approached by an investment bank representing a large international company and we decided to sell. After helping with the transition and abiding by a two year noncompete, I was approached by my two sons to start a new company. We founded Sina Companies three years ago. Now our pipeline has approximately $250M under contract or in predevelopment, representing about 2M SF around the country.

  • What challenges have you faced relating to entrepreneurship and starting your own firm?

o   The real challenge in starting a firm, especially with development, is having the patience to take the time necessary to grow the company. Healthcare organizations typically have a lengthy approval process. It takes a lot of time to go from the initial start up to having enough business in place to grow the firm and add personnel.

o   The timing of adding personnel is also a challenge. You need to balance not bringing employees on too early yet having the staff to adequately service your clients.

  • What differentiates Sina Companies from other healthcare real estate developers?

o   We’re very good listeners and we don’t have a set program outlining how we do business. We listen to the needs and objectives of the hospital or other client and structure a plan to satisfy those needs, rather than using a cookie cutter approach.

o   Being a nimble, entrepreneurial company, we don’t have long drawn out processes. We can negotiate a plan with the client on the spot and commit to it.

o   Our involvement in 9 million SF of healthcare projects across 30 states means we have seen a lot of different situations. That experience across the country is helpful when we talk to a new client about how to meet their needs.

  • When you started Sina Companies, what were your long-term goals and how have they changed over time?

o   Our original business plan was to have just the three of us on the team, not focusing just on healthcare, and primarily doing projects within an hour of our office in Palm Beach Gardens, Florida.

o   We started getting calls from past clients, brokers and consultants who knew of our integrity. Now we’re happily looking at more and larger projects than originally anticipated and thus we’re bringing more people onto the team. We’re also doing non-healthcare real estate. We are excited to venture into senior living and industrial in the first half of 2019.

o   One of the principles we founded the company on was that we would only do projects with people we trusted. We still do most of our work today on a referral basis.

  • How have you been involved with and/or benefitted from your WREAA membership?

o   When we’re going into a new market, one of the first things I do is check the WREAA membership book and see who’s in the area for opinions on a site or connections to a contact at a hospital. Everyone who I’ve called, whether we’ve met before or not, has been very open and willing to provide their advice. You know they came from the same great real estate program, so regardless of age their opinion is worthwhile.

o   We are trying to do our first Connection Fund deal and look forward to giving back in that way.

  • What advice do you have for current students who may wish to start their own real estate firm at some point?

o   Timing is everything when starting your own company. Just because someone is bored or wants to do their own thing doesn’t mean it’s the right time to take the leap.

o   Make a realistic business plan and have someone who has done it before to compare notes with. For any assumptions of timing in the business plan, add 6-12 months.

o   Don’t underestimate the value of working at another firm and learning how they operate. My experience at First Chicago and Aetna allowed me to understand how to approach and work with large firms from that side of the deal.

  • You’ve also worked with faith based, non-profit, and university organizations. How do these special groups present new challenges compared to a typical for-profit client?

o   There are interesting intricacies depending on the organization, such as tenant use restrictions. Also, universities or publicly owned hospitals have certain steps they need to go through before signing on a project. One must recognize there are certain conditions you have to live with and approval processes to go through that you don’t have with other clients.

  • What do you read? Do you have any recommendations for students or real estate professionals?

o   Most of my reading is related to our business. I read journals and emails focused on real estate and/or health care. We need to understand the health care industry as well as real estate so that we can know the expectations of our clients.

o   I’m currently reading I Love Capitalism, by Ken Langone, the founder of Home Depot. It’s a fun read that also covers his days before founding Home Depot.


WREAA extends a sincere thank you to Malcolm Sina for taking the time to speak with Student Ambassador David Walsh. You can learn more about Sina Companies at sinacompanies.com.

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2018 WREAA Biennial Recap

Posted By David A. Walsh, Wednesday, October 3, 2018
Updated: Thursday, October 4, 2018


This September 13-15th, over 500 alumni and friends of the UW-Madison Real Estate program converged on Madison to attend the 2018 Biennial Wisconsin Real Estate Reunion and Conference. Together we heard from industry leaders, presented awards, got an update on the UW Real Estate program, saw old friends, met new ones, and pushed ourselves to consider this year’s theme, “Where are We Now? Continued Growth or Reaching Peak.”


Returning to the newly renovated Memorial Union, this year's reunion was full of great events, generously made possible by sponsors and the hard work of many individuals, including the conference co-chairs Katie Johnson Bergen and Michael Zelin. Following are a few highlights of the event, but certainly not all. We hope that if you attended, you enjoyed your time and found it valuable. If you couldn’t join us this year, we hope to see you at our next conference, the Trends Conference, in Chicago on September 25th and 26th, 2019!



Thursday Highlights

The Conference kicked off when a full field of Badgers and friends teed off at University Ridge on Thursday morning in a scramble format, with the winning foursome shooting -12. Congratulations to Dan Flattery, Stew Cedarleaf, Max Kaminsky and Dan Price!  By late afternoon, a Women’s Networking Event was underway at the Edgewater Hotel, bringing together women in the real estate industry who share common ties to the Wisconsin Real Estate Program. The Student Speed Networking session followed, where students were provided a platform to make new connections with alumni.




Alumni Banquet and 5th Quarter Cocktails on the Plaza

The Alumni Banquet, hosted at The Edgewater Hotel, was informative and entertaining. This year, mentalist Oz Pearlman shocked the crowd in an after-dinner program which included an array of mind reading tricks. In addition, the Distinguished Real Estate Alumni Award was presented to David Lenz of the North Central Group and the Dianne Orbison Memorial Scholarship Award was presented to Alison Petrick. Following outgoing WREAA President Andrew Weir’s remarks, he was presented with the President’s Award. To cap off the program, the UW Marching Band made an appearance and played everybody’s favorite Badger classics including Varsity. After dinner, participants made their way outside to enjoy cocktails and conversation in the new post banquet 5th Quarter event.



Geopolitical Strategist Peter Zeihan

Friday morning commenced with an extremely engaging presentation from Peter Zeihan, a geopolitical strategist, global energy, demographic and security expert. Peter covered a wide range of topics including the history of international trade and security alliances, upcoming trends of available capital, the Trump administration’s staff turnover and relationships with other heads of state and an economic outlook for many industrialized nations.


On economic strength in the short to mid-term future, Peter cautions us that the cost of capital will quadruple. This is driven, he argues, by the baby boomers changing investment needs. He said, “Baby boomers made our economy capital rich, but that will change as they shift to saving.” Peter also claims that millennial consumption is a major reason we’re not currently in a recession. Looking forward to when a correction does come, Peter showed the audience the consumption patterns and investment needs of major countries. Using graphics to convey average ages of populations, Peter discussed how these ages affect the spending in each country. Peter explained that China is the most over credited country in history. He said, “Think Enron in every sector of China, and double in agriculture. It’s all going to crash at the same time.”


Peter also focused on foreign capital flowing into the United States, acknowledging that it’s driving up prices in gateway cities. He’s very optimistic about the strength of the dollar, arguing that there is no true competition to the USD. One example is that trade within the Eurozone is frequently done in USD already. The strength of the USD, Peter claims, will lead to continued deficit spending in the coming decades.


Fireside Chat with Matthew Bronfman, Principal and CEO of Jamestown Properties. Moderated by Dr. Mark Eppli, Director of the Graaskamp Center for Real Estate

Matthew Bronfman spoke on his experience with Jamestown Properties, including their tradition of sourcing capital from Germany. He says that even with poor relations between President Trump and Angela Merkel, capital continues to flow into the US, driven by high returns. He also spoke about owning Chelsea Market, where they started leasing space at $10/sf and grew it to $300/sf. Keys to success with non-commodity assets such as Chelsea Market and Ghirardelli Square, Bronfman suggests, are making the tenant sticky through branding the space within the firm and always seeking a value-add component to drive up net income.


Bronfman likes and wants to work in some secondary markets but is almost exclusively in Tier 1 markets because of deal size. Secondary markets, he explains, offer smaller deals and these smaller deals have the same pursuit and due diligence costs of the large deals. To effectively deploy their large amount of capital, scale is needed. He argues that the best market and asset class for dry powder these days are Washington, D.C. and multifamily. This is because D.C. hasn’t fully recovered from the recession and hasn’t created a tech/creative hub yet, and because we need to solve the affordability crisis in housing.


Two major signs that caused Bronfman to sell a majority of his core assts just before the GFC are not present today. These include losing bids to 90-95% leverage and underwriting unrealistic rates for vacant space. An interesting story he shared was that when selling a mixed-use property, he was advised not to sign a tenant into the commercial space because prospective buyers would underwrite the space more aggressively than current market rate.


Looking forward, Dr. Eppli asked Bronfman for his opinion on cap rate trends. Bronfman replied that he believes cap rates have already increased about 50 bps on large assets. However, he does not believe cap rates will increase much more as a result of the sufficient supply of capital. On a related note, he is noticing more competition and bidding wars on large scale assets because of the need to deploy large amounts of capital.



Concurrent Sessions: “What’s in Store for Retail” and “Debt, Equity, Alternative Financing and the Evolution of the Capital Stack”

The future of retail is a hot topic in real estate circles today and was discussed at length by members of CBRE and Brixmor Property Group Inc., moderated by Scott Crowe, the Chief Investment Strategist at CenterSquare Investment Management. Main takeaways were that selling a commodity isn’t enough because the internet made it simple, experiences including food and beverage are today’s strongest anchor tenants, tenants want shorter term leases and the fitness industry is demonstrating high growth.


A great turnout packed the room for a discussion on alternative financing methods, and attendees were impressed by the discussion between very qualified representatives from CBRE, Mesa West Capital and Northwood Investors LLC.


Alumni Luncheon

The luncheon this year set the stage for an update on the UW Madison Real Estate Program. The newly appointed Real Estate Department Chair, Tim Riddiough, shared with alums an update on new initiatives within the Program.  He announced that they will be bringing back the international real estate course, including a student trip, led by Instructor Joe Walsh.  The department is also working on plans to offer the MS program in 2019 and is exploring plans to organize a PE fund to be managed by MBA students, similar to the AREIT program currently offered.  Following the update on the Program, the Wisconsin Award was presented to Michael Shannon, Chairman of KSL Capital Partners.



Stories and Insights from Veteran Real Estate Entrepreneurs

A panel of four real estate entrepreneurs shared their experiences in the final session of the conference. Topics discussed included why each panel member decided to start their own firm, navigating capital raising and partnerships.

Motivations for starting their own firm were different for each panel member.  The panel also discussed how they went about raising the first round of capital for their business. They mentioned needing to give concessions to get that first round and have full discretion of where to place it as well as putting down hard personal money to tie up a deal to buy more time to raise funds. An echoed point from panel members was that partnerships in the business benefited from complementary skillsets.


Conference Closing

After the final session with veteran entrepreneurs, attendees networked on the Memorial Union Terrace. Many attendees also stayed on campus Saturday for the Wisconsin vs BYU football game. A packed two days of events lead to a beneficial and enjoyable conference for all who attended.

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