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Mar 17 2010

Four students from the Kellogg School of Management were declared second-place winners in the annual UNC Real Estate Development Challenge hosted by the Kenan-Flagler School of Business at the University of North Carolina-Chapel Hill on February 19th, 2010.

The winning Kellogg team, GTL Development, which included Kevin Neal, Kevin Newell, McLean Quinn, and Frank Sasso, was the competition’s only team entirely composed entirely of first-year MBA students.

Graduate student teams from 16 top business schools competed for highest honors and cash awards in a real estate development case competition, providing a 20-minute presentation to a judging panel of real estate professionals. This year’s participating schools were Cal-Berkeley (Haas), University of Chicago (Booth), Columbia, Dartmouth (Tuck), Duke (Fuqua), Kellogg, Michigan (Ross), NYU (Stern), Penn (Wharton), Texas (McCombs), UCLA (Anderson), UNC (Kenan-Flagler), USC (Marshall), UVA (Darden), Vanderbilt (Owen), and Wisconsin.

The Kellogg team won its pool of four teams in the first round, thus earning a spot in the finals. Final presentations were made in front of all participating teams and a panel of over 20 judges, with the Kellogg team being the last of the four finalists to present. After the presentation, the Kellogg team successfully fielded questions from the judges ranging from how it anticipated mitigating several key development risks and how the project returns would be affected by changes in different assumptions, to the origins of its team name. In what several judges described as a neck-and-neck decision, Chicago-Booth took 1st place and Kellogg took 2nd place, followed by Wisconsin and Vanderbilt.

During the week of the competition, each team received the case by email at noon ET on February 16 and worked quickly to prepare a 20-minute presentation on the case to be handed in by 7pm ET on February 18. The competition took place on the 19th at the University of North Carolina and was judged by a panel of accredited real estate professionals from nationally recognized companies. The students also took advantage of the opportunity to get acquainted with their judges and peers at a welcome dinner on the 18th, and a networking reception following the final presentations on the 19th.

This year’s case was distributed by The JBG Companies. The challenge was to formulate a redevelopment plan for a 160 acre site in Alexandria, VA, which comprised the majority of a 300- acre area surrounding 1.3 million square feet of new office space soon to be occupied by the Department of Defense. The site is currently comprised of a mix of mostly 1970s-vintage rental housing and a small amount of retail space, and the primary focus of the case was to develop a 5-7 year master-plan for the roughly 50 acres closest to the new Department of Defense space. Key obstacles included determining the optimal asset mix between residential, hotel, retail, and office given the fundamentals in the local market, alleviating major traffic concerns in the community, optimizing the phasing of the proposed project, and doing this all in a way that would serve the interests of both the local community and the current land owners.

By calling on each of their diverse backgrounds ranging from architecture and real estate development to real estate lending and private equity investing, the Kellogg team was able to develop a winning solution in 48 hours that was later learned to be very similar to the actual proposal that JBG has developed with two well- known urban planning firms.

Although the Kellogg team was proud of the second-place finish amongst very tough competition, the team looks forward to competing again with Chicago-Booth in the spring quarter’s upcoming Kellogg-Booth Real Estate Challenge, in which several members of Kellogg’s GTL Development team will be taking part.

About the Author

This article was written by Eric Schultz '11.