Nick Brown knew he wanted to be a part of the Applied Real Estate Investment Track (AREIT) even before he started his two-year Real Estate MBA program at the University of Wisconsin’s Graaskamp Center for Real Estate.
The first program of its kind in the country, the AREIT program allows a team of second-year MBA students to manage a $1.5 million real-world portfolio invested in real estate investment trusts. It’s a unique opportunity special to the Wisconsin School of Business and not found at any other real estate programs in the world.
“I wanted that kind of applied experience. The access to the AREIT board of advisors makes the program unique. These are high-level real estate investors with a wealth of knowledge and experience,” Brown said. “Getting their feedback and hearing what they think is incredibly valuable. While it’s a lot of work, I knew that I wanted to be part of this and go through this experience and learn as much as I can.”
The overall “client” for the portfolio is the AREIT board of advisors. The board is comprised primarily of alumni of the program who are active investment professionals. Three times each academic year the teams make a professional presentation to the board and receive a strong critique on the management and performance of the funds. Board members, despite being alumni and supportive of the program, take seriously their charge to challenge the students and create the environment and experience of the most demanding client-manager relationship.
On Sept. 29 Brown and two of his second-year MBA classmates completed the first big milestone in their year-long program. Brown, Bethany Corbae and Fordy Gates, who were named to the AREIT team at the end of last year’s spring semester, presented their portfolio management proposal to the AREIT board of advisors at the Fluno Center on UW-Madison’s campus.
The three students started their research for AREIT during the summer while each was also completing their summer internships. After reconvening in Madison for their final year in the MBA program, they spent countless hours together researching various real estate sectors, developing their strategy and working out every single detail of their initial presentation.
“It has been a great experience so far,” Corbae said. “It’s been a steep learning curve. We’ve been putting a lot of time into it. But I think it’s a great group and I think we’re going to learn a lot.”
Their talk included an overall look at the country’s future economic outlook, followed by a more detailed analysis of specific property sectors and their investment strategy. The three students took turns explaining their forecasts for various sectors, made specific stock recommendations and then fielded questions and feedback from the board.
“One of the most valuable things is they get to work with live money and they get the resources of talking to experienced real estate investors on the board,” said Tim Pire, AREIT program advisor.
Now the AREIT team will make adjustments as necessary, wait for final approval from the board and then manage the investment portfolio for the rest of the academic year.
“The best feedback we heard was we need to sharpen up things. It’s a positive on how we can go forward,” Gates said. “By building on the things they presented us, it will help us present a stronger portfolio and stronger results moving forward.”