Letter from the Executive Director
Mark J. Riedy, PhD
USD President Dr. Mary Lyons recently announced that Dr. Charles Tu has been appointed as the Daniel F. Mulvihill Professor of Commercial Real Estate, effective Sept. 2, 2010 (see related article). This three-year renewable appointment recognizes Dr. Tu’s “outstanding achievements in teaching, research and service to the university and to the Burnham-Moores Center for Real Estate.”
The endowment of the Mulvihill Professorship and appointment of Charles Tu as its first holder continue the series of breakthrough accomplishments both for Charles and for the Burnham-Moores Center. Charles joined the USD faculty in 2004 and has been a key factor in the growth and success of our academic programs ever since. His work and leadership have been instrumental in the advancement of the Master of Science in Real Estate program, which he now heads as Academic Director. He contributed importantly to USD’s approval of an undergraduate real estate major in the 2009-10 academic year. In both seen and behind-the-scenes ways, Charles Tu has become a terrific asset for the USD School of Business Administration and the Burnham-Moores Center for Real Estate.
The Mulvihill Professorship was endowed in 2008 in honor of Daniel F. Mulvihill, chairman of Pacific Southwest Realty Services, for helping to launch USD’s real estate program in 1993 and being one of its staunchest and most generous supporters. The Center’s Policy Advisory Board Executive Committee members created and funded this professorship and also created the annual Daniel F. Mulvihill Leadership award in 2002 to recognize Dan’s overarching role in the sustained growth of the real estate program.
The Burnham-Moores Center now has two academic positions of distinction, the Mulvihill Professorship and the Ernest W. Hahn Chair in Real Estate, which was endowed in 1993 when I joined the USD faculty. These endowed positions add to the stature of USD’s real estate program within the global academic community.
We thank you for your financial support and the time and effort so many of you invest in our real estate program. We thank USD for honoring the achievements of Dr. Tu and the Policy Advisory Board Executive Committee for recognizing the incredible long-term support and leadership of Dan Mulvihill in advancing our real estate program.
Dr. Mark J. Riedy
|Charles Tu, PhD
Charles Tu, PhD, has been appointed the Daniel F. Mulvihill Professor of Commercial Real Estate (see letter from the Executive Director). The three-year renewable appointment recognizes Tu’s outstanding achievements in teaching, research and service to the university and to the Burnham-Moores Center for Real Estate.
The newly created Mulvihill professorship was funded by members of the Center’s Policy Advisory Board Executive Committee in honor of fellow Executive Committee member Daniel F. Mulvihill. Mulvihill was instrumental in the original campaign to create the Ernest W. Hahn Chair, which is held by Executive Director Mark J. Riedy, PhD, and has been a key Center supporter since 1993.
“Within the academic community, the opportunity to hold an endowed chair or professorship truly is a wonderful public recognition of a faculty member’s strong reputation and value,” says Riedy. “This is a great acknowledgement of Charles’ overall leadership and an honor to Dan, who has been instrumental in building USD’s real estate program to its current level of prominence.”
The fall lineup of speakers for Breakfast at the BMC, the Burnham-Moores Center’s distinguished lecture series, has been announced.
On Oct. 6, Peter Bren, chairman of the board and president of KBS Realty Advisors, will speak at the Institute for Peace & Justice on campus. Bren oversees all aspects of the company’s business activities, including acquisition, management and disposition of assets acquired. He is a member of the KBS Investment Committee, which evaluates and authorizes new investment opportunities. Bren is also president of KBS REIT and KBS REIT II, both public, non-listed real estate investment trusts. KBS REIT closed its offering in May 2008, having raised over $1.7 billion in equity capital and having purchased over $3 billion in equity and debt assets. KBS REIT II commenced its public offering of up to $2.8 billion in June 2008.
Bren previously served as president of The Bren Company, was a former senior partner of Lincoln Property Company and was president of Lincoln Property Company, Europe. He is a founding member of The Richard S. Ziman Center for Real Estate at the UCLA Anderson School of Management.
On Nov. 30, Hamid Moghadam, chairman of the board and CEO of AMB Property Corporation, will speak on campus. Moghadam co-founded AMB in 1983 and led the company through its initial public offering in 1997. He has held a number of strategic roles within the real estate industry. He has served as the chairman of the National Association of Real Estate Investment Trusts and the Real Estate Investment Trust Political Action Committee, a director of Plum Creek Timber Company, and a founding member of the Real Estate Roundtable.
He is a past winner of the Ernst & Young Entrepreneur of the Year award, a recipient of the Ellis Island Medal of Honor and has been named CEO of the Year on eight different occasions by four separate industry publications. Moghadam received SB and SM degrees in engineering from Massachusetts Institute of Technology and an MBA from Stanford Graduate School of Business, where he serves as Trustee.
Registration for Breakfast at the BMC costs $35 per event or $60 if you register for both the Oct. 6 and Nov. 30 events. To register, go here. For sponsorship opportunities, go here.
|Lawrence Yun speaks to the sold-out audience at the Real Estate Summit Aug. 20.
Close to a thousand residential real estate professionals heard a mixed bag of economic signals at the Aug. 20 Real Estate Summit, co-hosted by the San Diego Association of Realtors and the Burnham-Moores Center for Real Estate.
Keynote speaker Lawrence Yun, chief economist for the National Association of Realtors, told the group that, “The worst appears to be over.” Yun said he did not expect to see home values fall further since the bubble has been removed from the market. He even suggested that there could be a housing shortage in the San Diego area several years from now when things “go back to normal.” On the downside, Yun said that, in the history of the United States, “We have never seen more than 2 million people unemployed for more than six months. Now, we are at 6 million.”
Yun offered a moderate forecast for the next five years. He predicts:
•Economic expansion of 1.5 million to 2 million jobs a year;
•An unemployment rate of 8 percent by 2012 with a normal recovery by 2015;
•Rising mortgage rates; and
•Home values appreciating by 5 percent locally.
|MSRE students tour the Cedar Gateway Multifamily Apartments construction site during Process Week.
The seventh cohort of the MSRE program kicked off the academic year Aug. 23 with a course called The Real Estate Process, or “Process Week.” Process Week is an intensive, six-day course designed to expose new students to the MSRE program, the university, the real estate industry and San Diego.
During the jam-packed course, students listened to presentations given by a variety of civic, real estate and university leaders on a broad range of real estate topics and issues, including microeconomics, sustainability, real estate development, financial concept fundamentals, Microsoft Excel skills, and real estate legal documents and transactions. Students also attended workshops on business writing, career planning, presentation skills and reputation management to help prepare them for the challenging year ahead.
Outside of the classroom, students toured the construction site of Cedar Gateway Multifamily Apartments, an affordable housing community for low-income families located downtown, as well as the new LEED-certified Student Life Pavilion on USD’s campus. The group capped off their first week with a harbor cruise, where they got to know their fellow graduate business students, faculty and staff.
|Michael Maher, Esq.
It happens all the time. You need limited, specific and time-sensitive information about one aspect of the title to a particular property. You don’t want to take the time to order an abstract of title or a title insurance policy, and you may not have an insurable interest in the property. Instead, you call a title officer or title company representative with whom you have developed a relationship and ask your quick, focused question, “Just tell me whether there’s a problem on this one specific issue…”
Bidding at a foreclosure sale, you are in that situation—you want current information right up to the time of the sale. You want to be sure that the foreclosing lender is in fact the senior lender and that you will not be taking title subject to any other liens. You bid confidently at the sale based on an e-mail from your title company contact, and you get the property. After the sale, much to your dismay, you learn that the foreclosing lender held a second deed of trust. You just bought subject to the first. So the title company’s on the hook for the erroneous information it gave you, right? Wrong.
The California Court of Appeal has again made it clear that you rely on informal assurances from title companies at your own risk. Unless you are the insured under a title policy or unless you purchase a written abstract of title, you have no recourse against the title company for erroneous information. The August 2010 decision in Soifer v. Chicago Title Company reinforces the principle that those are the only two ways you can hold a title company liable.
Ben Soifer was in the business of purchasing properties at foreclosure sales. Before bidding on a particular property, he needed to know whether the foreclosing lender was in fact the senior lender so that if he purchased at the foreclosure sale, he would not be taking title subject to liens that would survive the foreclosure. Soifer had developed a relationship with an agent at Chicago Title, who agreed to provide the limited, specific and time-sensitive title information Soifer needed, and who knew Soifer would be relying on the information in bidding. In exchange for the information, Soifer agreed to place future business with Chicago Title.
You rely on informal assurances from title companies at your
The arrangement worked well until March 2008. Soifer identified a property in Encino on which he wished to bid, and his source at Chicago Title informed him by e-mail shortly before the sale that the $990,000 loan being foreclosed was secured by the first deed of trust. Soifer’s bid of $1 million and one cent prevailed, and he acquired the property at the sale. Much to his chagrin, the foreclosing deed of trust was in fact a second deed of trust; Soifer acquired subject to the first deed of trust securing a $1.6 million loan from Citimortgage. After negotiating a reduction in the Citimortgage loan, Soifer later sold the property at a $1 million loss.
Soifer then sued Chicago Title to recoup his loss, relying on two legal theories: negligence and negligent misrepresentation. Chicago Title argued that it was not liable to Soifer. The trial court agreed and dismissed Soifer’s complaint. Undeterred, Soifer filed an amended complaint, restating his original claims and adding claims for breach of oral contract and “abstractor negligence.” Chicago Title again prevailed in having Soifer’s complaint dismissed. The trial court concluded that because Soifer had “neither sought nor obtained a policy of title insurance or an abstract of title,” Chicago Title was not liable to Soifer under any legal theory.
The Southland Title Corp. v. Superior Court decision, now nearly 20 years old, established that a title company is not liable if a preliminary report fails to disclose encumbrances. The court’s reasoning was that a preliminary report is merely an offer to issue a title policy on the terms in the report. Only if the offer is accepted and the title company issues a policy of title insurance does it have liability for erroneous information in the policy.
Soifer admitted that he had not obtained a preliminary report or title insurance from Chicago Title, but nevertheless argued that he had an enforceable oral contract calling for Chicago Title to provide him with informal, limited, but specific title information (which he claimed was essentially an abstract of title); that Chicago Title had been negligent by providing erroneous information; and that Chicago Title’s negligence caused his loss. Chicago Title argued that a title company can be liable for negligently misstating the status of title only if it issues a formal abstract of title; and that the informal communications between Soifer and his contact at Chicago Title, although written in exchanges of e-mail messages, did not constitute an abstract of title.
The Soifer Court agreed with Chicago Title, focusing on the limited nature of the information that Soifer had sought and Chicago Title had provided. Because it did not list all of the recorded conveyances and documents affecting title to the Encino property, it was not an abstract.
Soifer needed limited, time-sensitive title information that was specific to his needs in bidding at foreclosure sales, and Chicago Title provided the information. And if you walk by the steps of the Superior Court downtown as they wheel out the lectern for the trustees’ sales, you see a crowd of Ben Soifers. It will be interesting to see whether the title insurance industry perceives a potential market and considers developing a new product to address its need.
Mickey Maher is a real estate and business lawyer whose practice includes neighborhood and community retail and mixed-use centers; office and industrial park development, sales and leasing; purchases and sales of real property; reviewing and analyzing title-related matters; real estate financing; and advising a variety of businesses. Contact him at email@example.com.
Genevieve D. Fong is the newest student to receive a Diversity Scholarship in USD’s real estate certificate program. Developed by the Burnham-Moores Center for Real Estate in collaboration with the university’s Office of Corporate and Professional Education, the certificate program was launched in February 2006 for real estate and building industry professionals who want to round out their knowledge base.
Fong, a native San Diegan and first-generation Filipina American, will pursue her certificate in Entitlement, Development and Design, which is one of two certificates offered in the real estate continuing education program.
Fong selected the program so that she can put her 10 years of professional experience for various San Diego municipalities and elected officials to work helping to improve the quality of life in the region.
“While the urban landform continues to develop and re-develop in San Diego, I believe it is important to be able to understand the dynamics of real estate, which set the stage for thriving communities,” Fong said.
The Journal of Sustainable Real Estate has been accepted for inclusion in the American Economic Association’s electronic bibliography, EconLit. EconLit is a respected, comprehensive index of journal articles, books, book reviews, collective volume articles, working papers and dissertations that indexes more than 30 years of economics literature. The index is available on university Web sites and at libraries throughout the world.
The journal, which is being produced by the Burnham-Moores Center for Real Estate and published under the auspices of the American Real Estate Society with funding by the CoStar Group, will publish its second volume in an online format in October.
Two papers by Burnham-Moores Center faculty and staff will appear in the second issue of JOSRE: “Capital Markets and Sustainable Real Estate: What Are the Perceived Risks and Barriers?” by Louis Galuppo and Charles Tu, and “The Operations and Management of Green Buildings in the United States” by Norm Miller, Dave Pogue of CBRE, Jeryldine Saville and Charles Tu.
To subscribe to the online journal at no cost, contact Myla Wilson of the Burnham-Moores Center at firstname.lastname@example.org. To find out more about the journal, go to: www.josre.org.
|Vivek Sah, PhD
A paper authored by Assistant Professor Vivek Sah, PhD, “Experience and Real Estate Investment Decision-Making: A Process-Tracing Investigation,” has been accepted for publication by the Journal of Property Research. JPR is recognized as one of the premier global journals in real estate with an editorial board comprised of the top academics from the real estate discipline.
The paper looks at the decision-making processes of commercial real estate investors to see to what degree experience impacts their real estate investment decision-making. The study used controlled experiments, rather than surveys, to isolate the decision-making process, making it truly behavioral. The study also attempted to determine if subjects would be influenced in their participation by receiving compensation. The results showed that paying subjects does not change the results, a finding that will have implications for future behavioral studies in real estate.
The paper will appear in the December issue of the journal, which is published out of the University of Aberdeen, United Kingdom.
Mark J. Riedy, PhD, executive director of the Burnham-Moores Center for Real Estate, was recently selected for the 2011 edition of “Who’s Who in the World” due to his outstanding achievements in the real estate and banking industries. Riedy has been listed in “Who’s Who in America” since 1982 and “Who’s Who in the World” since 2005.