The buildings around us, where we dwell, work, shop, learn, and play, have a profound effect on our lives, our society, and our economy.And graduates of the MIT Center for Real Estate (CRE) master’s program are having a profound effect on how those buildings are developed.
Across the United States and internationally, CRE alumni are combining efficiency and economy with social and aesthetic appeal to create new building types that win both political and community approval. They are bringing greater transparency and accessibility to real estate finance. They are applying new development paradigms in emerging nations and aging cities. And very often, they are working with a sense of higher purpose.
“Having a positive impact on the built environment is what we’re all about,” explains David Geltner, a professor of real estate finance and engineering systems. He notes that the center, founded in 1983 as part of MIT’s School of Architecture and Planning, established the first one-year master’s program in real estate development. Today CRE also offers professional development classes. Many other graduate real estate programs are in business schools, which emphasize investment and finance.
“We certainly appreciate those aspects,” says Geltner, author of Commercial Real Estate: Analysis and Investments, the most widely-cited textbook on real estate investment. “But we also speak to how cash flow represents a physical modification to the social environment. Our students are extremely entrepreneurial, and many are very successful, but they generally have an orientation toward real estate as a physical product that can make the world a better place.”
Patrick Kennedy SM ’86, for example, is pioneering the construction in San Francisco of micro-unit buildings, which can house two people in as little as 300 efficient square feet. “That’s the unit of the future, and I think it can be made more of a modular manufactured product,” says Kennedy. “I want to put San Francisco in reach of middle-class people, and the only way is innovation in housing.”
Farther north, Lisa Picard SM ’95, heads Skanska Commercial Development’s Seattle office, where she aims to “not only create value from an investment perspective but also from a community perspective.”
Catherine Polleys SM ’96, and Mark Roberts SM ’94, worked through a nonprofit industry organization to develop an index that tracks performance of real estate investment and, by extension, the health of the U.S. real estate market. Their benchmark is widely used by investors, regulators, and researchers worldwide, and it has sparked similar efforts in other regions.
Real estate development involves dozens of stakeholders and an especially broad range of disciplines, including architecture, law, politics, finance, planning, and social sciences, says CRE director Albert Saiz, a professor of urban economics and real estate. That’s why, he says, “we want our graduates to be Renaissance men and women who understand the market from every dimension.”
That’s reflected in the collaborative intellectual milieu at CRE, which annually enrolls some 25 to 30 master’s students. Typically half come from outside the US, and virtually all have hands-on experience. “We have property portfolio managers, high-end leasing agents, people who’ve worked in construction and land use and mortgage derivatives,” says Saiz. “They talk to one another in a focused, productive, noncompetitive way and gain an understanding of the reality of real estate.”
Or as the center’s advisory board chair Tod McGrath puts it, “You get the sort of education you’d be lucky to get during decades in the real world, and you get it in eight months.”
McGrath teaches the popular Real Estate Ventures class, drawing on his wide network of top-tier attorneys and other professionals. A highlight, says Michael DiMinico SM ’12, director at Boston’s King Street Properties, is an exercise that divides the class into two groups, each representing a party to a sample contract.
“You negotiate in class, before a panel of celebrity judges from across the real estate industry,” recalls DiMinico. “Afterwards everyone goes to the Muddy Charles and the judges share feedback with the students. It’s an active learning process and great for networking.”
DiMinico is co-president of the CRE's alumni association, which Saiz cites as a leading strength of the program. In addition to providing outstanding networking opportunities and financial support—including more than $1.4 million for new facilities in Bldg. 9—the association is making CRE a global knowledge hub through events and programs. One example is The Case, a six-year-old development proposal competition for graduate students, which had to be capped at 42 teams from six countries in 2014.
Another is the Real Disruption panel discussion series, which showcases startups and innovators, drawing hundreds of attendees with technology-related topics like novel tools for leasing transactions, crowdfunding, and big data’s impact on commercial real estate. “Real Disruption grew out of alumni conversations about crowdfunding,” says founder Steve Weikal SM ’08, vice president at Now Communities, which develops “pocket neighborhoods” of smaller, sustainable homes. “I started looking around and uncovered an explosion of new real estate ventures.”
McGrath says these events boost industry engagement, which he calls “key for our next 10 years,” with dividends for students, curriculum, and research. And cultivating a sense of purpose will remain a priority in those years, Saiz adds. “Our students want to solve problems, do things, collaborate—they feel they can learn from everyone,” he says. “I’m very proud of that and want to keep fostering that culture and make it endure.”