A team of Berkeley MBA students took first place at the 16th annual National Real Estate Case Challenge for their creative investment strategy surrounding a new commercial property.
The prestigious finance-based competition, hosted by the University of Texas McCombs School of Business last month, charged 20 teams from the top MBA programs with analyzing a real estate investment case and presenting a recommendation before a panel of industry leaders.
For three of the six Haas team members—Matthew Hines, MBA 19; Robert Kelly, MBA 20; and Mark Trainer, Master of City Planning (MCP) 19—the win comes just months after participating on a team of students that took back the Golden Shovel real estate award from Stanford. The other National Real Estate Case Challenge team members—Claire Collery, MBA 19, Joe Dembesky, MBA 19, and Mike Wiedman, MBA 20— participated in their first competition. The team took home $10,000 in Haas’ first win since 2009.
Case sponsor Invesco asked teams of six to figure out the best way to use money generated from a new commercial real estate construction project. The options given were to keep the building in the portfolio with no change to existing financing; keep the building in the portfolio but refinance the loan on it; sell the building and return the profits to investors; or sell the building and invest the profits in building a new property.
Questioning the status quo, the Haas team came up with a different option.
“We questioned why there were only four options given, and we began to suspect there was a hidden fifth option,” Hines said. The team proposed refinancing the existing building and combining the savings with additional money in the private equity fund to invest in building a new property.
The Berkeley Haas team spent nearly three months preparing for the competition during an independent study course taught by Lecturer Bill Falik, a managing partner with Westpark Community Builders, and Abigail Franklin, an investment banking and real estate student adviser. Students in the class practiced solving sample cases each week and presented to guest judges, including former competition participants and local finance and real estate professionals. The format helped build competence, cohesion and confidence, Dembesky said.
Judges said they were impressed with Berkeley’s presentation, which called for role playing, creativity and financial acumen.
“I was playing the role of the fund manager, and Matthew [Hines] burst onto the scene from the development team and pushed for funding the second building,” Collery said. One of the judges told the team that the performance felt like being in a real investment committee meeting, Dembesky said.