The mission of the Guthrie Center for Real Estate Research is to educate students, to support and foster research on real estate finance, real estate markets and urban economics, and to provide a forum for the engagement and continuing education of real estate professionals.


The financial crisis of 2008-2009 had its roots in the market for residential real estate, and the tremendous change in the market has highlighted the need for tomorrow’s real estate professionals to have a thorough understanding of the theory and practice of the real estate industry, to learn from past mistakes and to shape the future of the industry. Real estate research has been long neglected by academics and has been considered to be a more practitioner-oriented field that requires a lot of institutional knowledge but lacks real intellectual depth. We at Kellogg beg to differ. The finance department has a long tradition of researching questions in the intersection between household finance and macroeconomics and we have deepened this field recently by hiring several tenure-track professors with research interests in household finance, macroeconomics and real estate.

Why is Real Estate Important?

  1. Real Estate is one of the largest components of Gross Domestic Product in the U.S., accounting for about 13% of GDP Value Added. As a comparison, the finance industry accounts for 7%, retail for 5.8%, and manufacturing for 12.1%.
  2. Real Estate plays an important role in other countries as well, it accounts for 11.1% of GDP in the UK, 10.8% in Germany, 13.3% in France and 14.3% in Italy.
  3. Real Estate is one of the largest asset classes in the world and is growing in importance. For example, in 2016 S&P recognized the global importance of real estate by elevating it from a subsector of “financials” to one of the 11 sectors within its Global Industry Classification Standard (CICS).
  4. Real estate is the largest asset in the U.S. banking system at about $4 trillion as of August 2016 (see Figure 1), accounting for about 25% of banks’ total assets.

loan assets chart

Why is Research on Household Finance and Real Estate Important?

  1. Consumer loans and real estate account for almost 40% of banks’ total assets in the U.S.
  2. The dramatic rise in the importance of real estate (Figure 2) and the high level of real estate debt reflects structural changes in the global economy – the shift from manufacturing to services and increased rates of urbanization and suburbanization. Understanding real estate prices, markets and the financing of real estate is one of the most important questions in finance and macroeconomics.
  3. Real estate research crosses fields and disciplines such as public economics, urban economics, macroeconomics and finance. It operates through different types of institutions such as banks, insurance companies, private equity, pension funds and government-sponsored enterprises.
  4. The importance of real estate is not confined only to Commercial Real Estate – in fact, Residential Real Estate accounts for a larger share of the real estate stock, representing 53% of real estate loans on banks’ balance sheets. As such, research on real estate has unique and important policy implications.

evolution of loans chart

The Kellogg School’s Real Estate Program is designed to ensure that our students are ready to meet the challenges of the real estate market. The comprehensive curriculum – offering 9 different real estate classes - gives students the knowledge and adaptability they’ll need in order to excel in high-level professional and managerial careers in the industry.

Venture Competition
The 14 student teams pitched their ideas in the morning to a preliminary investment committee comprised of private equity investors. The top four teams – including teams from Kellogg, Oxford, University of Texas (McCombs), and Harvard – then presented to all conference attendees and a panel of judges, later in the afternoon. The structure of the competition simulated the real-world process of real estate entrepreneurs soliciting equity funds from private equity investors. Judges based their decisions off of criteria including quality of idea, feasibility, presentation persuasiveness, and the written plan.

An all-star panel of three judges were able to ask each team of finalists questions and provide feedback. The panel comprised of Neil Bluhm, Northwestern Pritzker Law School graduate and Co-Founder / Managing Principal at Walton Street Capital, Jeffrey Johnson, Kellogg graduate and CEO at Dividend Capital Diversified Property Fund, and Maury Tognarelli, CEO at Heitman.

Ultimately, one of two Kellogg teams won with their idea of a co-working shared office space for physicians in Chicago. The team, named Envoy Physicians, pitched a real estate opportunity that would consist of medical suites that would act as both office and exam rooms, as well as common areas for doctors to collaborate. In order to create a warmer and more comfortable environment for both patients and practitioners, the structure and design would intentionally stray from the traditional hospital aesthetic. The idea is tailored for Direct Primary Care (DPC), the next evolution of concierge medicine in which patients pay physicians directly every month. Envoy would provide the real estate and operation management for physicians seeking to practice DPC who might not have the business acumen or desire to run a business.

The other three finalists pitched a range of ideas, including McCombs’ concept of Home Run Derby, an entertainment venue specifically centered around baseball simulation games, similar to TopGolf, for cities like Austin or Houston. Harvard also advanced to the final round with a south Atlanta multi-family project in which a currently vacant apartment property would be rehabilitated for workforce families and managed to foster community engagement. The last team finalist Oxford pitched AgRomania, a venture that would aggregate agricultural land in Romania to be sold at premiums. Other ideas from the competition included high street urban retail spaces, micro unit apartments in Manhattan, and workforce housing in ski towns.

To learn more about the Kellogg Real Estate Conference and Venture Competition, contact Denise Akason.