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From left, the members of Kellogg’s winning Real Estate Challenge team: Boris Shraybman, Kevin Newell ’11, Michael Regan ’11, Rhodee Gine ’11, Justin Hollyn Taub ’11 and McLean Quinn ’11.

Real Estate Challenge

‘The quintessential experiential learning exercise’

Kellogg team bests Booth in annual Real Estate Challenge

6/25/2010 - For the second year in a row, the Kellogg School has emerged victorious in a real estate competition against the Chicago-Booth School of Management.

The annual Kellogg-Booth Real Estate Challenge culminated a quarter-long, for-credit course, during which the teams researched the real estate investment market in the Chicago metro area. Each team played the role of an institutional investor, creating an analysis and acquisition recommendation for a portfolio consisting of industrial, apartment, retail, office and hotel assets. The course concluded with a final presentation and question-and-answer session with a panel of five industry judges.

“This was an incredible opportunity to synthesize and apply the material we’ve covered in nearly every course we’ve taken at Kellogg so far,” said Kevin Newell ’11, the team’s project manager. “It prepared us to apply the material to real-world situations in the real estate industry.”

The Kellogg team’s acquisition strategy sought to capture excess returns by investing in urbanization trends in Chicago’s downtown. Their thesis predicted a recovery in the Gold Coast apartment market and continued State Street retail expansion over the next five years, and was supported by an in-depth submarket survey, detailed asset level review and capital-structure analysis.

Teammate Justin Hollyn Taub ’11 described the Challenge as “the quintessential experiential learning exercise.”

“Whether my team members end up sitting on the board of pension fund, working in real estate private equity, or taking a more entrepreneurial approach within the industry, the skills and tools we were able to develop in completing this project will be very valuable,” he said.

For its winning efforts, the Kellogg team was awarded 70 percent of the $2,500 cash prize, while the team from Booth claimed 30 percent. Judge Jacques Gordon, global strategist for LaSalle Investment Management, noted that both teams “grappled with the complex calculation of post-fee, post-leverage risk-adjusted returns and thereby demonstrated that they understood how financial structuring changes the risk-return characteristics of a joint venture investment.”

The team was co-led by Kellogg Real Estate Program lecturers William M. Bennett ’06 and Denise Akason ’92. Bennett is a principal and founder of Iconic Development LLC, an Evanston-based real estate investment and development firm. Akason has more than 20 years’ experience in the real estate industry as a broker, lending officer and consultant.

“The Challenge is a cutting-edge example of how universities and leading firms can work together to apply rigorous academic concepts to complex real-world issues,” observed Bennett, who has taught a number of experiential learning courses in which Kellogg MBA students partner with leading companies to provide solutions to sophisticated real estate issues.

“The Kellogg team was able to gain the confidence of the judges, who acted as the pension fund’s investment board. As my colleague Finance Professor Paola Sapienza has shown through her research and the Chicago Booth/Kellogg School Financial Trust Index, confidence is of utmost importance when making investment decisions.”