A typical day could include a class on finance, time spent off-campus conducting due diligence on a property or networking with local real estate executives. Students working toward a master’s degree in real estate are likely to engage in all of these tasks and more, with the ultimate objective to thrive in an industry that continues to grow in complexity.
The heads of these graduate programs say there is growing interest in them, and ask a very important question: Will the fast run-up in asset prices earlier this decade, and the dizzying fall to earth, convince real estate executives that they need more education to work, and thrive, in today’s real estate industry?
While these masters programs vary widely, there are common themes: an emphasis on working and solving problems in the field, strong involvement with the top real estate professionals in the community and making strong connections with the local chapters of the various national industry trade organizations.
Hitting the books
Arizona State University’s Master of Real Estate Development program is an accelerated, 30-week program, centered in the W.P. Carey School of Business. It has a transdisciplinary teaching team, with representatives from the schools of design, law, construction and business.
While students attend lectures from 8 a.m. to noon Monday through Friday, their afternoons are spent in the field, with so-called “synthesis” projects, or practical problem-solving, a major focus.
For example, one recent project mandated that students find alternative uses for a condominium project that had stalled, in part, because of market conditions. Students, who work in teams on these projects, answer questions such as, is this the right land use for this property; why or why not? And, given the state of the current market, what conditions need to occur in order to make the project financially feasible, and when will that likely occur?
The owner of the land provided each team with due diligence material and met periodically with each team. A design professional was also available to help students solve site, building design and planning problems. Students came up with alternative uses for the site, such as a boutique hotel, and a repositioning of the condominiums into rental apartments.
“We provide a solid academic underpinning, as well as a practical application element,” says Mark Stapp, executive director of Arizona State’s Master of Real Estate Development program. Significant industry involvement is another key part of the program, Stapp says, as students forge strong working relationships with such organizations as the Urban Land Institute and the International Council of Shopping Centers.
Also, sustainable building is a very large part of the curriculum, Stapp adds. “We look at how building affects all elements of the community,” he says. “Where and how you build, and where you do business, has an impact on society.”
Students are being prepared for a future where green building will become the norm, explains Stapp. “They have to think beyond LEED. LEED criteria are going to be codified in building and environmental codes.”
The Master of Real Estate Development program at the University of Southern California, with a full-time program of 11 months, has had among its ranks of students some mid-career professionals who exited the industry before the crash, according to Christian Redfearn, director of graduate programs in real estate. “They got out in time, and wanted to go back and re-think things, and learn about design, for example,” Redfearn says. “They want to become more well-rounded.”
The curriculum is focused on three major areas: design, market analysis and finance. “The thinking is that you can’t do one of those things without knowledge of the others,” Redfearn says. “Our goal is to get students to think critically about real estate. A successful developer has to be one step ahead of where the market is.”
One of the program’s signature features is that its adjunct professors are actively involved in the industry. Students also do extensive field work, making frequent site visits and doing case study work. The school also conducts periodic interviews with alumni. “We interview them, and talk to them about which courses worked for them, and which ones didn’t,” Redfearn adds.
The types of courses offered can vary according to a university’s location and student body make-up. Georgetown University’s Master of Professional Studies in Real Estate is a two-year program that centers around a core of five courses: ethics, law, finance, marketing and accounting, and concludes with a capstone course, where the student must solve a contemporary problem in real estate.
“Many graduate programs focus on either the transaction or the management side of the business,” says Charles Schilke, associate dean of the Masters in Professional Studies in Real Estate program. “We think the focus should be on both.”
The school is also taking full advantage of its Washington, D.C. location, Schilke says. One course, “How HUD Works,” is taught by a former deputy secretary of the agency, Roy Bernardi. Another, “Community Development Financial Institutions,” explores the special financial instruments that finance affordable housing.
And, with international studies a major focus at the university, the program offers numerous courses on overseas real estate markets, such as Latin America and India, Schilke says. One course that focused on China was taught by the head of Jones Lang LaSalle’s China division.
Clemson University’s Masters in Real Estate Development is a joint degree between an architectural and business college, unique in the U.S., according to Elaine Worzala, interim chair of the Department of Planning and Landscape Architecture and director of the Richard H. Pennell Center for Real Estate Development. Courses in the two-year program cover such areas as finance, construction management and science, as well as public-private partnership development. Since Clemson is located in a relatively small city, students take an annual two-week tour of coastal South Carolina cities to survey developments there. Also, connection with industry is a focus, Worzala says. There is a student chapter of the U.S. Green Building Council, and the university sends a student delegation to the Urban Land Institute’s annual meeting.
“There is a lot to understand about this asset class,” Worzala notes. “The regulatory environment is more important today. There’s more government regulation, and real estate professionals have to stay on top of that.”
Today’s real estate executive is likely to need more management training than was necessary 20 years ago, Schilke says. “A large multi-national corporation like the CB Richard Ellis of today didn’t exist twenty years ago,” Schilke adds. “Also, today’s real estate executives need much more of an international focus, and the financial aspect is much more complex.”
The bubble burst may convince some industry executives that this could be a great time to hit the books. “We’ve seen very sophisticated people make mistakes,” Redfearn says. “How are we going to respond to that? Are we going to stay away, or are we going to get more involved?”
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