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The winning Kellogg team (from left): James Curtin, David Moore, Barrie Bloom, Andrew Fenet, Jordan Morrell and Peter Tsai, all '08 except Fenet '09.

Kellogg wins first place at national real estate challenge

Prestigious competition an experiential learning opportunity; students tested under pressure and perform superbly

By Adrienne Murrill

11/7/2007 - The Kellogg School of Management prevailed over teams from 15 other top MBA programs by ranking first in the 6th Annual University of Texas at Austin National Real Estate Challenge.

The case-based competition exposes graduate students to the challenges that face real estate professionals. Barrie Bloom, James Curtin, David Moore, Jordan Morrell and Peter Tsai, all ’08, and Andrew Fenet ’09 comprised this year’s Kellogg team. Prior to this year, Kellogg had not placed in this challenge.

Each team had 48 hours to organize a 20-minute presentation on a complex real estate investment case, which they presented to top real estate professionals serving as judges for the event, held in Austin, Texas, on Nov. 2. The case was distributed by Goldman Sachs & Co. and focused on a public-to-private “take-down” of bankrupt European hospitality company.

Based on an actual Goldman Sachs transaction, the case challenged participants with its complex: an investment in 90 hotel assets across four Western European countries. Designing a winning strategy entailed addressing issues such as joint venture terms and structures, branding and franchising options for the hotels in France; financial implications of a renovation in Belgium; and negotiations with a local government entity over a ground lease in Italy. Students also addressed issues involving the investment process, financing, post-investment operations and exit strategies.

“What we did that was unique was take the point of view that we were presenting to an investment committee,” Moore said. He said the team decided that the deal was a turnaround bet on assets that had been underperforming and were undervalued as a result. “What truly separated us from the competition was instead of just answering the questions as they were posed in the case, we packaged our answers around a unifying investment thesis.”

After the two rounds of competition, the Kellogg team prevailed and earned $6,000 in prize money.

“This is a huge victory for the Kellogg real estate program, said Tsai. The win solidifies the school’s position not only as one of the top leaders in management education, but also as one of the nation’s top real estate programs, he added.

Moore said the opportunity was challenging, but the participants learned a great deal about real estate and teamwork from the experience. He credited the Kellogg School’s real estate classes and the tight-knit nature of the real estate community for the team’s success.

Professor Therese McGuire, the program director for the Real Estate Management Program at Kellogg, said it was an honor for the school to participate and win. “In the industry, this is viewed as a very prestigious competition, and all the top schools try to participate and strive to do well,” she said. This was a student-led effort, and she said the students deserve all the credit for doing the job that won. “The Kellogg team’s first-place win reflects well on the students themselves, the real estate program here and Kellogg itself.”