Texas Real Estate Programs, Internships Aim to Simulate Real Deal
As the volume of commercial real estate demand, deals and development skyrockets throughout Texas, the industry is working to curate the talented workforce needed to sustain growth, with an emphasis on short-circuiting the gap between education and application.
As with any business, understanding the historic principles, ethics and philosophies that govern how commercial real estate is practiced can augment anyone’s career. In addition, it doesn’t hurt to possess certain personality traits — articulation, sociability, self-motivation — that have long been associated with commercial real estate “types.”
But according to professors within real estate programs at some of the state’s prominent academic institutions, simulating actual work experience at the grassroots level is what really allows students and interns to thrive early in their careers. Just as important, the industry professionals who hire and train these individuals tend to support this approach.
At the University of Texas at Austin (UT), real estate is not a formal major that students can declare, but rather a concentration within the finance program in which both undergrad and graduate students can specialize. The program typically includes 100 to 150 undergrads and 15 to 20 graduate students pursuing a Masters of Business Administration (MBA) degree.
Against that backdrop, much of the coursework is rooted in real-time capital markets analysis and deal execution. This occurs via live investment funds that are subscribed with real capital dollars for deployment — money that is raised from university donors and established industry professionals.
Over the semester, students work to generate alpha, or overall returns that exceed a given industry index or benchmark, within funds that are backed by the two biggest forms of institutional capital: private equity and REITs.
“Because real estate is a minor, the undergrads are juniors and seniors, and the MBAs are really experienced,” says Greg Hallman, a longtime UT professor who heads the real estate initiatives within the finance department. “We’ve realized over time that when students already know finance and accounting basics, we can teach more with live deals than with lectures, so we really try to make it an experiential program.”
Hallman earned his PhD from UT’s McCombs School of Business in the 1990s, writing his dissertation on public versus private organizational investment structures. He returned as a professor in 2002 and oversaw the launch of a REIT fund in 2007, as well as a private equity fund that was created in 2016.
John Goff, the founder of Fort Worth-based Crescent Real Estate, provided the bulk ($6 million) of the funds to enable the launch of the private equity fund. Additional donors also contributed to the student fund, which is now subscribed to the tune of about $10 million, thus allowing students to explore, analyze and ultimately select from a broader range of deals. With more deals to choose from, students inherently get exposed to learning about different property types — a function of what’s trending on professional lenders’ and investors’ radars at that time.
“Every summer, we find live deals for which capital raising is ongoing, and our undergrad and MBA students respectively work as analysts and managers to evaluate those deals and pitch recommendations to investment committees of anywhere from zero to $500,000,” he explains. “We were picky our first couple years — we only did four of the 17 deals we looked at — but are now getting stronger deal flow from big sponsors and finding that working live deals and presenting to real committees are great learning experiences.”
Hallman acknowledges that simulating real-world investment analysis with private equity money involves navigating some legal and regulatory red tape that doesn’t exist with publicly traded funds that are operated through a single brokerage account. But the degree to which these exercises encapsulate actual work in the private equity world is significant, Hallman says, thus making it easier for students to land and excel in these jobs.
Hallman is also tasked with raising money to purchase data subscriptions from industry gatekeepers like CoStar Group and MSCI Real Assets (formerly Real Capital Analytics). It’s another wrinkle that sometimes takes some sweet-talking to iron out, but Hallman says he wouldn’t have it any other way.
“The bottom line is that we can’t do real deals without real data,” he says. “We’re academics, and this is a top-tier research institution, but we don’t want to just teach war stories that exist in a vacuum. That’s why we emphasize an experiential curriculum that still teaches underlying economics that are applicable to virtually any real estate deal.”
Although UT’s program is rooted in finance, students who are interested in development can also get a taste of what lies beyond the classroom. Led by Mandy Pope, a lecturer whose 15-year career in landscape design netted numerous developer relationships, this initiative also takes students through every step in the project life cycle.
Real estate has actually been a course of study at Texas A&M University since the 1970s, when it was part of the institution’s department of agricultural economics. The program was absorbed into the finance department in the 1990s. In subsequent years, its scope has been expanded beyond investment analysis to reflect a broader approach to commercial real estate as a whole, including development, brokerage, market analysis and debt financing.
“Our program entails 36 hours of specific commercial real estate-focused coursework at the graduate level,” says Nicky Amos, the program head who also graduated from its ranks and enjoyed a career in finance with Northmarq before returning to academia.
“As we placed students in finance, valuation, development, investment, asset management, consulting and brokerage, the program grew,” she continues. “Today, it runs for three semesters, and we have about 60 to 70 students enrolled at any given time. While the majority of those students come straight from undergrad, early-career professionals are also returning to hone their skills. We also offer a four-plus-one program for our most competitive students.”
Real estate classes in College Station run the gamut from finance to development to even law and are taught by faculty members who are exclusively devoted to the program. In addition, the coursework makes use of actual technology and platforms that are used to crunch numbers, assess risk-reward propositions and model long-term asset performance. Lastly, students can further jumpstart their careers via access to Argus classroom training.
Amos says that classes and professors emphasize teaching within the context of current market conditions, which are constantly shifting and significantly influence perceived property performance, risk tolerance, deal structure and capital flows. However, she does recognize the value in implementing a more traditional lecture/seminar type of approach at the introductory level.
“You have to teach the basic information in those introductory classes, which is a benefit of having 36 hours of coursework — we can really drill that core knowledge during the first few classes, then expand with more hands-on projects later in the semester,” she says.
Sometimes, Amos acknowledges, the push to emulate actual industry workloads comes at the expense of student interest and excitement. But the trade-off, of course, is the elevated level of preparedness that students have upon completing those exercises.
“It’s one thing to get a set of assumptions and plug them into a model, but that’s not really how it works in the real world,” Amos explains. “So in our finance classes, we work with operating statements with rent rolls and expense statements from actual properties, and in our law class, they practice lease abstractions. It’s not glamorous, but it ensures that students emerge fully prepared to step into any position they’re offered and skyrocket.”
The program’s job placement numbers speak to the success of this approach. Amos says that since its inception, the program has had a successful placement rate of 92 percent or higher every year, even during the woefully bad job market of 2008-2009.
Most recently, the program added a concentration in proptech, further embracing instruction on current industry practices by way of newly launched platforms. That class is taught by Steve Ramseur, a Aggie alumnus who was hired by JLL in 2008 and retired in May as the real estate giant’s chief innovation officer.
As an established industry professional who has spent his entire adult life in the real estate business, Ramseur knows the importance of merging practical application with theoretical instruction.
“My pedagogy is to start with a real-world example or case study, then pivot to teaching through the lens of the theories or principles behind the example,” says Ramseur. “It’s about taking a results-oriented approach so that students — many of whom haven’t actually worked in the industry before — can understand not only the basic subject matter, but also why it’s relevant to real estate and their future careers.”
Ramseur draws on a variety of personal experiences and episodes to create the backdrop for these lessons. For example, his family business, Ramseur Inc., is currently marketing a development site in Texas that has hit some snags en route to closing. In addition to highlighting the tribulations of this process — as well as how external market conditions exacerbated the matter — he emphasizes the core underlying message as well while in the classroom.
“We had the site under contract last December when new market forces came into play, prompting the buyer to pull out, forfeit his earnest money and walk way,” Ramseur recounts. “As a real estate broker, appraiser, developer or asset manager, what do you do in that situation? You pick yourself up and find another buyer.”
The company did find a new buyer, who also later tried to back out of the deal due to an infrastructural issue regarding access to the site. Rather than return to square one, Ramseur worked with the Texas Department of Transportation to get approval for a deceleration lane to be constructed and is now meeting with engineers to review the logistics of the plan. The buyer remains on board, and the deal moves closer to the finish line.
“The moral of that story and classroom example is that every deal dies at least once,” says Ramseur, who is also introducing real-time lesson plans based on Federal Reserve Chairman Jerome Powell’s latest speech and the Urban Land Institute’s report on green space in urban developments. “If you can’t pick yourself up from that, you shouldn’t be in the real estate business.”
University of Houston
The real estate program at the C.T. Bauer College of Business at University of Houston (UH) is now in its 11th year. The certificate-based program includes both graduate and undergraduate courses of study that consist of four classes at three credit hours apiece.
The program’s origins can be traced to an industry-wide initiative to bolster the talent pipeline throughout Houston at a time when energy prices were soaring and major commercial expansion was taking place throughout the city. Real estate programs were also being launched more frequently at Division I schools around the country at this time.
Keith Richards, the program’s current executive director, says that the local real estate professionals who committed the $1 million in donations to launch UH’s program encouraged Bauer College to plan for coursework that would be heavily rooted in real-world problems and solutions.
“Today, we’ve raised nearly $3 million in support, along with a significant endowment from Stanford and Joan Alexander, and as a function of that, the industry wants these classes to be practical,” says Richards. “We use well-known literature to teach theory, but all of our courses are taught by accomplished industry professionals. That’s one of the best things about this market — the number of highly experienced professionals available to serve as quality adjunct professors.”
Mock appraisals and valuations, theoretical land site proposals, case study analyses, modeling exercises with fluid assumptions — all are part of the coursework and its broader mission of simulating the working world. But according to Richards, what really helps set the UH program apart from its peers is the steady flow of guest lecturers who represent all the different players in an actual deal or project.
“You can’t really have a real estate program without finance or market analysis classes, but we have a required development course (taught by Acho Azuike, COO of Houston-based developer DC Partners) in which students learn the development cycle from beginning to end,” he says.
“This approach helps them understand not only the financial implications of development, but also the physicality of real estate — how it’s designed and constructed,” Richards continues. “For that, we bring in architects, engineers and contractors as guest lecturers who discuss how all of these parties interact on the job.”
With the vast majority of classes taught at night, UH’s program caters to the schedules of working faculty members and students who overwhelmingly work while attending school. Being able to offer that flexibility in scheduling also helps the program attract quality professors into its ranks.
As COO of JLL’s Houston office, Mary Stanton is directly involved in numerous facets of her firm’s internship program. For a given summer, starting in December, the office typically interviews 30 to 40 candidates who are college juniors or seniors and eventually hires 10 to 15 students for the program.
“We’re looking for hungry, humble and smart,” says Stanton. “We’re also committed to diversity and inclusion, so we factor all these things into our selection process.”
In interviews, her team gauges how hungry candidates are by hearing their stories of taking initiative, overcoming hardships or demonstrating an ambition to succeed in commercial real estate.
“As we conduct interviews, we get a better sense of these intangibles, which helps us determine interns’ baselines and how prepared they are to do the work,” Stanton says.
As the program unfolds, emphasis is placed on identifying the line of business for which interns’ personalities and existing skill sets are most suited. Interns meet with different members of the firm who specialize in various property types in a sort of trial-and-error process to determine how the ensuing 10 to 12 weeks can best be utilized.
“We determine who is best suited for office, industrial, healthcare or retail based on our interviews and the interests that candidates have expressed,” Stanton says. “We try to align those things upfront so that during the first week, we can have projects lined up that usually are a good fit for them.”
CBRE also offers an array of internship programs, including a national sales internship program for individuals expressly interested in that form of brokerage. Additional areas of internship focus include digital and technology, global workspace solutions, finance and investment management.
Elisha Bejsovec, talent manager for CBRE’s national campus programs, says that in 2022, the Dallas-based real estate giant employed more than 400 interns across its U.S. offices — and that’s a good thing.
“The benefit of having such a large and diverse internship program is that there is space for different personality types to thrive at CBRE,” says Begsovec. “However, the interns who tend to succeed at CBRE are proactive, passionate and creative. Real estate is constantly evolving, and the next generation of professionals has to have the tools to adapt.”
In addition to immersing interns in daily work alongside seasoned industry professionals, CBRE emphasizes the importance of exposing college students and recent graduates to company culture.
“Interns experience a variety of strategic program events, such as community outreach, hands-on educational workshops and trainings, networking and social events and weekly executive webinars,” says Bejsovec. “These webinars provide interns with opportunities to interact directly with senior leaders, and eventually they get to host and moderate these webinars themselves.”
In addition, CBRE partners with organizations like Seizing Every Opportunity, Posse Foundation, CREW, Future Housing Leaders and Project Destined to identify and attract student talent. All summer interns are invited to participate in global employee business resource groups during their internship, allowing them access to networks to form relationships and draw inspiration from fellow employees. Examples of these networks include the Asia Pacific Network, Black Excellence, Women’s Network and LGBTQ & Allies Network.
Much like professors notice certain personality traits in promising real estate students, employers place a premium on finding interns who are naturally predisposed to the skills needed in brokerage or capital markets analysis.
“Real estate is a business of active, on-the-ground learning and dealing with people,” Stanton explains. “It’s harder to teach interns how to sell than it is to teach them technical aspects of real estate. At JLL, we do both, but the key is to start with hungry students who really want to learn the business.”
Stanton hopes that as time progresses, the dialogue between the employment and academic sides of the talent development scene will increase. With many industry professionals being alums of Texas schools and firms actively investing in recruitment initiatives for internship programs, the groundwork is laid for both sides to support one another in the critical mission of developing and aggregating human talent.
— This article originally appeared in the September 2022 issue of Texas Real Estate Business magazine.