It’s finance—with dirt.
That’s how Jim Spaeth, Executive Director at the Leonard W. Wood Center for Real Estate Studies at the University of North Carolina’s Kenan-Flagler Business School, describes his chosen profession. Finance with dirt. Business that you can physically interact with, that you can show off to someone.
“It’s hard to touch a bond, it’s hard to touch a stock,” Spaeth says. “But you can touch a shopping center. [Real estate MBA students] get the rigorous finance, but they also get a real asset that they can walk through, talk about, be proud of.”
That’s one of the enduring allures of real estate MBA programs. Several US-based business schools, such as UNC and Columbia Business School, that have offered concentrations in real estate for decades.
But real estate hasn’t been consistently popular throughout that time. It’s a business that’s intimately tied to the vicissitudes of the market. But for right now, as real estate bounces back in the wake of the great recession, these programs are booming in popularity.
“From 2007 to 2009 I don’t think the concentration was all that popular, simply because most MBAs are focused on, ‘Where am I going to work after I invest the time and money to get this MBA?’” Spaeth says.
“But commercial real estate has made a huge recovery. The amount of hiring happening in that field is awesome. Naturally that’s going to drive interest in MBA students in that industry.”
Officials at other schools echoed Spaeth’s statement that the real estate MBA is back. Kate Kerrigan, senior director for the Paul Milstein Center for Real Estate at Columbia, says the downturn of 2008 had an impact on her school, but that they have since seen a full recovery. And Tim Kawahara, Executive Director of the Ziman Center for Real Estate at UCLA’s Anderson School of Management, says his school’s program has increased in popularity after the recession.
“There’s much more activity in real estate markets, and a good placement of students when they graduate,” Kawahara says. “They are typically getting the jobs that they want.”
UNC, Columbia Business School and UCLA are just three schools among a host of universities that offer programs in real estate, including Arizona State University’s W.P. Carey School of Business and Cornell’s Johnson Graduate School of Management, several of which appear on Find MBA's Top Business Schools for Real Estate List.
Outside the United States, schools like the National University of Singapore and Rotman School of Management in Toronto offer specialized programs in real estate. And new programs have sprung up over the past several years, with Rutgers Business School announcing in 2013 that it had received a grant to develop a concentration in real estate, the University of Miami launching an accelerated MBA in real estate in 2012; and Marylhurst University launching an online real estate MBA in 2010.
Additionally, in the past few years, a number of business schools, such as Georgetown University’s McDonough School of Business and Boston College’s Carroll School of Management, have launched centers dedicated to the study of real estate.
According to experts, the increasing complexity of the industry is one reason for the increased academic attention.
“Real estate was viewed as more of a mom and pop non-sophisticated business, 20 or 30 years ago,” Kawahara says. “But it’s become really sophisticated over that time. Different capital markets and flows have changed the way real estate operates as a business.” Kawahara credits the influx of foreign capital as a transformer of the industry.
Such a rapidly changing, mercurial field attracts a certain type of student, says Kerrigan.
“We tend to attract students with an entrepreneurial mindset,” she says. “They have skills necessary to turn entrepreneurial thinking into leadership, whether it’s institutional real estate or more through new and emerging real estate. It is a very entrepreneurial profession. There’s always something new to be doing in real estate.”
One such student is Natalie Smith, who just completed her first year at UNC’s program. Smith did her undergrad at Vanderbilt University, but she always knew she wanted to pursue a career in real estate.
“My dad is an architect, so I grew up being really intrigued by how buildings are built and by the whole design aspect of it. As I grew older, I still had that interest but it became more in the aspect of how all the different components come together to lead to these buildings being built,” Smith says.
Smith started her career working for a developer in Manhattan, but quickly became more interested in the finance side of real estate. She’s currently interning at Real Estate Capital Partners, a firm that provides real estate investment advisory services.
Smith isn’t sure what she wants to do after she graduates, but officials at MBA real estate programs listed a host of possibilities. After they complete these programs, students can go into fields like finance, real estate development, investment management, private equity real estate, consulting, family-style real estate businesses, or off-the-beaten path career tracks, such as government planning, sustainable building or solar power.
But Spaeth points out that even though real estate is hot right now, it’s inevitable that the wheel will turn again, and that the day will come when this unpredictable, exciting business will once again fall out of popularity.
“It’s a cyclical business,” Spaeth says. “Eventually it won’t be as fun.”
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