Investing in real estate has always been a wise decision. However, in the current climate, business schools such as the University of North Carolina-Chapel Hill's Kenan-Flagler Business School are temporarily halting new investments through their student-run private equity fund. Dave Hartzell, the director of the Wood Center for Real Estate Studies, believes that uncertainty brought about by the coronavirus pandemic will keep the pencils down at their center for a little longer. Despite this, Hartzell remains hopeful, confident that the real estate industry will bounce back.
The Lucrative Path of Real Estate MBAs
Real estate is a consistently lucrative avenue of interest for MBA graduates. From real estate finance to property management, there are various career paths to explore within the industry. The principles of real estate are also essential for managing global organizations. UNC Kenan-Flagler Business School boasts the highest percentage of MBA graduates working in the industry, followed closely by the Wisconsin School of Business. While not the most popular choice for B-school grads, real estate offers significant financial rewards, with salaries ranging from $58,000 to $180,000 depending on the school. However, at UNC Kenan-Flagler, starting salary is not the primary consideration for real estate MBAs. The value lies in the potential for higher net worth through equity in deals and funds after graduation.
The Impact of UNC Kenan-Flagler's Real Estate Fund
UNC's Wood Center for Real Estate Studies has a notable track record. Since 2007, their Real Estate Fund has raised $12.2 million through 47 investments in various states and property sectors. The fund actively manages 25 to 30 investments, supporting student experiences and career strategies. The concentration on real estate at UNC Kenan-Flagler is taught as an applied corporate finance concentration, offering practical and analytical knowledge. Students benefit from a range of opportunities including a Global Immersion elective, alumni mentoring, student development projects, and certification in the Argus commercial real estate program. Additionally, students have access to career treks across the U.S. and funding to join real estate associations.
Learning from Previous Downturns
Dave Hartzell, with decades of experience in the real estate industry and academia, reflects on the current downturn caused by the pandemic. While there is uncertainty, Hartzell believes the situation differs from previous downturns. In the past, real estate industry practices were often to blame for economic crises. However, this time, the uncertainty is primarily due to the pandemic's impact on jobs and the market. Nevertheless, there is a growing sense of optimism that people will be called back to work as states reopen. Hartzell acknowledges the pain felt in sectors like hotels and retail but remains confident that the industry will recover.
Creating Real-World Experiences
The Wood Center's Real Estate Fund provides students with a unique learning experience. Student managers are given significant authority and responsibility, simulating real-world scenarios in private equity funds. They conduct due diligence, raise capital for investors, make recommendations to an investment committee, and monitor asset management. This hands-on approach allows students to gain valuable industry insights and develop practical skills that go beyond traditional classroom learning.
Investing in a real estate MBA can be a smart move for those interested in the industry. The top schools, such as UNC Kenan-Flagler, offer comprehensive programs and opportunities to gain real-world experience. Despite the current challenges, the real estate market will inevitably bounce back, and those armed with a real estate MBA will be well-prepared to thrive in the industry.