Four students from the Wisconsin Real Estate MBA Program recently traveled to the University of North Carolina at Chapel Hill to participate in the 2017 UNC Real Estate Case Development Challenge on February 16 and 17. Our team, known as “YZ Capital” (to keep University names concealed from the judges) was presented with the case the prior Thursday, February 9, and spent four consecutive days through Monday morning, February 13, developing a proposal to for a 145-acre portion of the former Fort McPherson U.S. Army base in Atlanta, Georgia. Faced with a short deadline and an infinite list of possible development ideas, our team spent nearly every hour of our weekend developing a $362M project that consisted of 2.1 million gross square feet and 49 buildings—including the healthcare, hotel, retail, and office sectors, as well as specialty groups such as performing arts and urban farming.
Using what we have learned over the past three semesters—especially in Prof. Arif Qureshi and Prof. Robert Schwarz’s Commercial Development class, Prof. Jaime Luque’s Urban Economics class, and Prof. Joe Walsh’s Valuation class, we found that the site qualified for approximately $90 million in tax credits and assumed nearly $196 million in total debt for the project – which helped us achieve equity multiples greater than 3.7x and at least a 22% IRR for each of the managing and limited partners, through a 3-phase/3-year plan. We also demonstrated our research skills in analyzing each sector’s market trends, occupancy, and supply and demand growth metrics. We felt confident that our 57-slide, 20-minute presentation effectively covered all questions we were asked to discuss in the presentation.
Carrying positive attitudes to the Madison airport on Thursday morning, February 16, we immediately found our connecting flight from Madison to Detroit to be two hours late—which would cause us to miss our flight from Detroit, MI to Raleigh, NC. Luckily, we were able to switch flights and fly from Madison to Atlanta International Airport (approximately 20 minutes from the Fort McPherson development site), and from Atlanta to Raleigh-Durham Airport. Although we decided not to visit Fort McPherson during our layover in Atlanta, we decided it had to have been good luck that we passed through Atlanta on our way to UNC.
Once arriving Thursday evening in Chapel Hill, we were greeted by our host, Ed Crocker, a first-year Real Estate MBA student at UNC. Ed introduced us to other UNC Real Estate students and faculty. That evening, the University hosted a cocktail reception and dinner at the Carolina Club, where we met many of the judges and students from participating universities. 16 universities—including Wisconsin—attended the 2017 Case Challenge, including the following: Marshall School of Business (USC); McCombs School of Business (UT Austin); Columbia Business School (Columbia University); Kenan-Flagler Business School (UNC); Tuck School of Business (Dartmouth); Fuqua School of Business (Duke); McDonough School of Business (Georgetown); Stern School of Business (New York University); Kellogg School of Management (Northwestern); Wharton School (Penn); Haas School of Business (UC Berkeley); Anderson School of Management (UCLA); the Darden Graduate School of Business (Virginia); and the Owen Graduate School of Business (Vanderbilt). After dinner, we all headed back to our hotel to rehearse our presentation one more time and get some rest.
On Friday morning at 7:30 am, Ed drove us to Kenan-Flagler Business School, where we ate breakfast and randomly drew team presentation times out of a hat. All 16 schools were divided into groups of 4. The winner of each group would advance to the finals.
Although we were nervous, after presenting our case, we felt confident and glad that at least the first round was behind us. We then found out at lunch that we had advanced to the finals, along with Columbia, Dartmouth and Georgetown. We had approximately two hours before we were to present again in front of all participants, so our team rehearsed one more time and tried to think of other questions the judges would ask us. At 2:30 pm on Friday, we presented one more time in front of approximately 100 people. After all four groups presented, the judges gathered as a large group, and later announced that our team from Wisconsin had placed third overall! Dartmouth and Columbia finished second and first, respectively. While the judges said it was very close between the top three teams—and that any of them could have won the competition—the four of us were very excited to represent Wisconsin and come home as finalists.
After the awards ceremony, the Kenan-Flagler Business School hosted all of the participants for happy hour at Top of the Hill Restaurant and Brewery – one of the iconic bars on UNC’s main bar strip, Franklin Street. All four of us were excited to have represented Wisconsin well, and also relieved that our hard work had paid off. While some of us were initially hesitant to participate in a case competition challenge, it wound up being an incredible experience, and we would all recommend that next year’s class of second-year MBA students participate as well.