Spring Break
HBS Real Estate Club Team Wins First Ever National Real Estate Challenge
Cliff Chandler (OF), Contributing Writer
Issue date: 11/21/05 Section: News
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Real Estate Club members Cliff Chandler (OF), Zack Georgeson (OG), Nelson Hioe (OG), Kevin Kaberna (OG), Arnaud Karsenti (OA) and Nadeem Meghji (OB) formed the winning team that bested UC Berkley, Wharton (last year's defending champion), USC and Stanford Graduate School of Business to take the National Championship. HBS has now placed a team in the final three for the fourth straight year-an unprecedented feat.
The HBS team competed against 15 other teams from Wharton, Stanford, Berkley, Michigan, Columbia, NYU, Kellogg, Chicago, UCLA, USC, UVA-Darden, UNC, Duke, Cornell and UT-McCombs in front of an esteemed panel of judges from Goldman Sachs, Cresent Real Estate Equities, Wood Partners, Banc of America Securities, Prudential Mortgage Capital Co., J.P Morgan, Jones Lang LaSalle and many others.
The competition required each team to prepare a 20-minute presentation that involved an evaluation of an investment opportunity in a commercial property, based on an investment that had recently been consummated by Goldman Sach's Whitehall Real Estate Opportunity Fund. Students were asked to address issues concerning the risks and rewards of the investment (from the perspective of the fund and the developer), the partnership structure, the development process, the selling strategy and options for operating partnerships with other entities.
The case was distributed on Tuesday morning and the HBS team (under the disguised name "13th Floor Investments" for un-biased judging reasons) had only 48 hours in which to analyze the case, come to a decision concerning all the investment issues and options, create a 20-minute presentation and travel to Austin to turn in the final presentation by 7:00 p.m. Thursday night. The first round of competition took place on Friday morning before the panel of judges (including Goldman Sachs Whitehall Fund representatives who had worked on the actual deal).
This seemingly impossible task was accomplished by two all-night meetings in Spangler's project study rooms (as HBS class attendance rules further handicapped the team in that they had to attend all classes during the two days). Nonetheless, the team took advantage of a slip in security procedures and continued the Wednesday-night meeting until the early hours of the morning. Fueled by the notorious Spangler low-fat yogurt self-serves, severely over-priced M&M's and a burning desire to amend last year's second-place finish and to "Beat Wharton," the team developed an analysis that was both creative and quantitatively sound. The team then worked feverishly on the PowerPoint presentation during the plane flight to Texas Thursday morning, where one team member was reprimanded and informed that if he did not remain seated in his assigned seat he would be "forced to serve drinks and peanuts to the other passengers if he wanted to remain on the flight." Overly aggressive flight attendants aside, the team managed to parlay a mass of creative quantitative analysis and ideas into a coherent message and investment stance.
