Topic: Real Estate
Cal tops Stanford in Golden Shovel Real Estate Competition
The Win: First place in the NAIOP San Francisco Bay Area (SFBA) Real Estate Challenge, held April 27. The friendly real estate development competition between UC Berkeley and Stanford celebrated its 34th year, with Cal taking home the coveted James W. Brecht Memorial Golden Shovel. The team’s $2,000 prize is donated to the nonprofit Challenge for Charity.
The Team: The Cal team included two Haas MBA students, Marshall Slipp, MBA 23, and Jack Woodruff, MBA 23; and three students in the UC Berkeley Master of Real Estate Development and Design program, including Esmeralda Jardines, MRED+D 23; Jordan Doane, MRED+D 23; and Serena Lousich, MRED+D 23.
The Challenge: Each year, organizers pick a development site that’s within driving distance of Berkeley and Stanford. Students don’t find out where the site is until the night before their first meeting. This year’s site was the San Francisco Wholesale Produce Market. “Typically the site that’s selected has challenges associated with it that make the development associated with it complicated,” says Marshall Slipp, MBA 23. “As a team, you have to work through those challenges.” The team had nine weeks to prepare a 100-page proposal explaining the vision, site design, development phases, and financials for the deal. In this case, the largest challenge was the limited equity available for the redevelopment project.
The Pitch: The UC Berkeley team pitched a plan to unlock as much equity as they could by obtaining permanent financing for some of the buildings that would remain on the site long-term. They also proposed a small capital campaign for the nonprofit owner and bringing in the expertise of a joint venture partner for redevelopment. “Bringing in a joint venture partner to help redevelop the site provides a lot of advantages in terms of raising capital, obtaining better financing terms, understanding the development process, and managing the redevelopment process,” Slipp said.
The Clincher: The UC Berkeley team proposed a multi-story industrial development that would upgrade the San Francisco Produce Market with cold storage facilities and a commercial kitchen hub for local food-based businesses. The design also featured fleet storage space for electrified autonomous vehicles, making the project financially feasible and readying the Produce Market for a new era of logistics and delivery.
The Haas Factor: The team credited Haas’ overall strength in real estate. Competition advisors Abigail Franklin and Bill Falik and the Fisher Center for Real Estate and Urban Economics faculty worked to validate and challenge the team’s assumptions. They also helped connect the team to developers, property managers, prospective tenants, and financiers. Leveraging these networks, the team conducted more than 60 interviews to hone their ideas and complete due diligence. In addition, this year’s team received coaching and moral support from last year’s winners, which helped the team stay inspired, refine the process, and benchmark progress.
Microsoft to build $1 billion data center on land once set aside for failed Foxconn deal
Developers wonder: Who will fill the hole left by First Republic?
Trump organization slashed rent for Gucci, its biggest tenant, by estimated $7 million a year
Falling populations could add to economic stress in San Francisco and San Jose
Startup Spotlight: Alokee wants to be your virtual realtor
Startup Spotlight profiles startups founded by current Berkeley Haas students or recent alumni.
Team: Matthew Parker (co-founder and CEO), Hamed Adibnatanzi (co-founder and head of legal), Noman Shaukat (co-founder), Marcus Rossi (COO), and Mandy Kroetsch (CMO), all EMBA 23.
When Mandy Kroetsch met Matthew Parker last year in the Berkeley Haas MBA for Executives Program, she was juggling classes while bidding on houses in southern California.
“I was getting up at 4 a.m. and checking listings,” said Kroetsch, EMBA 23. “I found houses that came on the market before my agent even told me.”
Kroetsch started questioning the value of her real estate agent. Meanwhile, her challenges confirmed for Parker, a veteran Seattle real estate broker, that she probably didn’t need one.
So Parker decided to solve the problem by partnering with EMBA classmates to create startup Alokee. The company, which functions as a virtual real estate agent, empowers California home buyers to bid directly on properties.
The site is designed for people who grew up banking, paying bills, and shopping for most everything online without an intermediary, Parker said.
“Increasingly, Gen Z and other digital natives are baffled by why they have to talk to a real estate broker when they find all of the listings and tour the properties themselves and want to just make an offer,” Parker said.
“Increasingly, Gen Z and other digital natives are baffled by why they have to talk to a real estate broker.” —Matt Parker
Ease of use, money back
Launched nine months ago, the Alokee website is live in California, featuring photos of homes that have sold in San Jose and San Diego. The company plans to expand soon, and has a waiting list to beta test the site with customers in Washington, Oregon, Arizona, and Nevada.
Alokee’s selling point is its ease of use: Create an account, provide proof of funds for a down payment, and then “make 12-to-15 decisions” on offer price, a closing date, loan payment schedule and amount, and other sales decisions. A buyer could potentially be in contract to buy a house in a matter of minutes, Parker said.
A second benefit is that the buyer receives a chunk of the agent’s fee in cash back after a sale. In San Francisco, for example, where the agent commission on a home sale averages $40,000, Alokee takes a set fee of $9,000 and returns $31,000 to the buyer. “We don’t want to chase down the big commissions,” Parker said. He added that the check comes at a perfect time, as buyers typically invest the most in their houses—additions like solar panels, window replacements, energy-efficient appliances, and insulation—at the time of purchase.
An EMBA team
Parker started Alokee with classmate Hamed Adibnatanzi, a legal affairs veteran. Adibnatanzi used his law expertise to make sure that the mass of paperwork required for any real estate deal on the site was simplified for a direct buyer and met federal, state, and local requirements.
Meanwhile, the team is still sorting out the website’s technical complexities. Noman Shaukat manages the code behind the offers that flow through the site. “It’s a technical challenge, not a legal one for us,” Parker said.
Parker also asked Marcus Rossi, a former commanding officer with the U.S. Marines, to be Alokee’s COO and invited Kroetsch, a chemical engineer by trade, to join as CMO. “I told him I’d love to help,” said Kroetsch, who worked with a branding agency to come up with the name Alokee, which combines the words Aloha and key (meaning the key to a house).
“We are working through the marketing plan right now, and I am happy to be a part of this team,” she said.
Learning to scale
This is Parker’s second startup. He came to Haas after starting national home improvement repair and renovation service ZingFix. At ZingFix, he realized that there are different skills required to manage a company as it scales across state lines. “A quickly-growing startup was a new business challenge for me,” he said. “The more people that joined, the more I realized that I would need an MBA to take care of our stakeholders.”
Deciding on Haas, he said the program has provided priceless support for what he’s trying to achieve, from mentorship to participating in the UC LAUNCH accelerator program and competition, in which Alokee was a finalist. “Once you get to the finals of LAUNCH you get introduced to top-tier mentors and a storytelling coach. These people understand what you are doing, and they pick apart your business model,” he said. Senior Lecturer Homa Bahrami spent time coaching the team, helping them to develop a hiring framework. “Everything she told us was correct,” Parker said. “She’s probably in the top 10 smartest people I’ve met in my life.”
He added that Distinguished Teaching Fellow Maura O’Neill’s New Venture Finance course also helped them navigate as the company works to land a seed round of funding.
While saving homebuyers money is a goal, Parker said the company will build more gender and racial equity into the home buying process by giving buyers direct bidding power. “Homes are how people stay in power and get in power,” he said. “We want to give all people the power to win in the real estate game.”
Is the Bay Area on the verge of a housing construction slowdown?
S.F.’s real estate market could be quiet in 2023. But here are 8 things to watch for
Lisle W. Payne, MBA 67
Real estate executive, philanthropist
Lisle W. Payne, 80, beloved husband, father, mentor, coach, and businessman, passed away on October 12 at Stanford Hospital after a seven-week battle against a rare blood cancer and disorders.
After earning his MBA at Berkeley, Payne pursued a successful career in real estate, including founding the Fox Group, which he led as CEO.
He demonstrated leadership in the industry at the national, state, and local levels as a member of the board of directors for the Real Estate Securities and Syndication Institute, chair of the board of directors for the California Housing Council, and a member of the real estate investment committee to the Corporations Commission of California.
He taught for several years at Haas, and he and his wife, Roslyn, were generous donors to Berkeley and to Haas, especially to the Fisher Center for Real Estate & Urban Economics.
Together they endowed the Lisle and Roslyn Payne Chair in Real Estate and Capital Markets and were named Builders of Berkeley. He was also a trustee on the UC Berkeley Foundation.