Vol. 4 No. 3 March 6, 2009
Latest News
Letter from the Academic Director

USD's Business School Ranked 29th in Nation by BusinessWeek

13th Annual Real Estate Conference Draws a Crowd

USD MSRE Program Named CCIM Fast-Track Partner

Seventh Annual Real Estate Expo Succeeds with New Format

MSRE Students to Compete in ARGUS Challenge

MSRE Students Assist with Community Planning Project

Alumni Profile: MSRE Alums' Firm Acquires Midwest Student Housing Portfolio

Burnham-Moores Center Attends MBA Annual Convention

Real Estate Society Takes Part in Habitat for Humanity Build

Mark Riedy, Norm Miller Offer Insight at Industry Events

Company Owned by MSRE Alum's Family Featured on Extreme Makeover TV Show

In the News

Calendar

Upcoming Continuing Education Classes

Useful Links
Request information

Make a gift

Burnham-Moores Center Staff
Mark Riedy, Ph.D.
Executive Director

Meghan Bokath
Fundraising Assistant

John Demas, Esq.
Instructor

John Ferber
Director, Commercial Real Estate

Louis Galuppo, Esq.
Director, Residential Real Estate

Diane Gustafson
Communications Coordinator

Ilse Hunnicutt
Executive Assistant

Ines A. Kraft, Ph.D.
Administrative Director, MSRE Program

Lauren Lukens
Student and Alumni Services Manager

Norm Miller, Ph.D.
Professor and Director of Academic Programs

Sherry Tehrani, Esq.
Instructor

Charles Tu, Ph.D.
Associate Professor

Jeryldine Tully
Communications Director

Myla Wilson
Executive Assistant

Newsletter Info
Suggestions? Comments?
Contact us:
Jeryldine Tully
(619) 260-4786

Continuing Education

New class!

Creative Investment and Development
in Changing Times

Starts March 10, 2009

Register Now

For more information on Real Estate Continuing Education, go here.

 


 Latest News

Letter from the Academic Director

Norm Miller, Ph.D.

After a three-year drought, California has declared a statewide water emergency. The situation will likely mean that water-rationing measures will be put in place by July 1 in San Diego.

Right now, my water bills are fairly low. I would be willing to pay much more. If I did face higher water prices, I would likely invest in water-saving devices, more efficient toilets and take shorter showers. But telling me or others that we can't wash our cars or have exotic gardens is an idea that will only create a lot of devious and sneaky water users. Pricing should be the solution, not regulation. In fact, regulation will only make matters worse in the long run as it will not encourage the kind of technology we need to desalinate water or recapture both gray water and stormwater runoff.

While water is essential for life and, like clean air, is priceless, the great news is that we will never use it all up. It is inexhaustible, which is what differentiates water from other business and life support systems that are drawn into our homes and buildings.

More Information

The question addressed here is whether we should treat water the same way we do other resources like coal and oil and gas that are slowly becoming exhausted. Should we consider regulating water? Should we embrace the notion of water police for violators of our local water policies such as the clean car buff or gardener of tropical plants? Should we, during our extended rain droughts that will on occasion plague us, consider fining, even jailing the neighbor who refuses to turn off his water hose when washing his gas-guzzling Hummer?

There is no question that we need regulation for the prevention of contamination and for those who do not control water runoffs. Regulation that requires us to do no harm is essential, but regulation that prevents harm to water resources is different from regulation on the consumption side.

I would argue that each household should receive an average allocation per month — with some limited carryover — based on insuring minimal and essential water needs. This allocation should be priced fairly cheaply and somewhat in line with current average pricing. As we consume more water, the price should geometrically climb to the level that exceeds the cost to desalinate water from the sea or capture stormwater runoff.

MSRE Degree

Depending on the technology used, this can be from 3.25 to 5 times current water pricing. The most promising method to desalinate seawater is the reverse osmosis method. Right now, the high cost of desalinization has kept it from being used more often, since it can cost more than $1,000 per acre-foot to desalinate seawater, compared with about $200 per acre-foot for water from normal supply sources.

Desalinization technology is improving, and costs are falling. Tampa Bay, Fla., is currently desalinizing water at a cost of only $650 per acre foot, which is roughly 3.25 times the current cost. As both the demand for fresh water and technology improves, you can expect to see more desalinization occurring, especially in California. Would you pay 3.25 times your current water bill? If necessary you would, but you would also find builders designing homes with rainwater capture systems and gray water re-use systems if we allowed prices to increase so that there are real returns from improved technologies and designs. By keeping water pricing low and regulating quantities consumed, we not only delay the problem but we delay real solutions that the market could and would provide.

If some households want exotic gardens and long showers with several showerheads and fountains, we should provide this choice to them without penalty. All we need to do is allow pricing for their above-average consumption to rise to the point that someone can actually produce the water desired whether it be from on-site sources or elsewhere. We must allow markets to work. Water police and regulation of consumption is a stupid idea fraught with leaky logic and bureaucratic tendencies.

This is not to say that our water tables and wetlands should not be safeguarded and preserved for their natural filtration and ecological benefits, but any short-term dissuasion of water consumption should be phased out in favor of market solutions, and the sooner the better. If pricing were sufficiently graduated, I would decide if I wanted to have an exotic garden — not some water police or tattletale neighbor — and the market would deliver.




USD's Business School Ranked 29th in Nation by BusinessWeek
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The University of San Diego now ranks 29th in the nation on BusinessWeek's 2009 list of the top 50 undergraduate business programs. USD, which has ranked in the top 50 for three years in a row, rose 18 spots this year, the largest jump on the magazine's list.

USD's undergrad program is now one of the top three in the state of California, along with the University of California, Berkeley and the University of Southern California. USD was also ranked highest among schools in the West Coast Conference.

USD's 18-spot rise was due in part to its ranking of 11th this year in corporate recruiter satisfaction with students. USD students also gave faculty an A+ grade, the second year in a row that the school received the highest mark for teaching excellence.

"It is very satisfying to have the hard work we have put into building a world-class business school recognized by BusinessWeek," said USD School of Business Administration Dean David Pyke. "The jump in our ranking reflects the tireless efforts of the entire faculty and staff to deliver on the School of Business Administration's dual promise of academic excellence and outstanding student service."

According to BusinessWeek, "institutions that succeeded in helping students navigate the difficult job market improved their standings the most." The magazine also said that the view from USD students is that "a close-knit program helps students feel at home (and that) improved recruiting efforts are starting to pay off."




13th Annual Real Estate Conference Draws a Crowd
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More than 600 industry professionals attended the Center's 13th Annual Real Estate Conference Feb. 18, making it one of the largest turnouts in the event's history.

Richard K. Davis
The conference, which was held at the Marriott Hotel & Marina in downtown San Diego, featured keynote speaker Richard K. Davis, CEO of U.S. Bancorp, who was introduced by USD President Mary E. Lyons, Ph.D.

The first panel of the day focused on the macro changes taking place on the investment horizon. Mark Riedy, Ph.D. and executive director of the Burnham-Moores Center, led a national panel of: Rebekah Brown of JP Morgan Asset Management in New York; David Blackford, CEO of California Bank & Trust in Irvine; John Schoenfeld of Houlihan Lokey Howard & Zukin in Los Angeles; and Gayle Starr from AMB Property in San Francisco.

Following a brief introduction of Brett Kondrick, the Fall 2008 recipient of the Daniel B. Woodruff Memorial Scholarship, the second panel commenced.

Ian Gill, principal of Highland Partnership in San Diego, led a discussion of values and opportunities in the San Diego market in today's climate. Gill was joined by San Diego industry professionals: Daniel Phelan of Pacific Southwest Realty Services; Paul Twardowski of Hines; Douglas Wilson of the Douglas Wilson Companies; and Alex Zikakis of Capstone Advisors Inc.

The half-day program also featured a live, interactive survey gauging attendees' outlook for the coming months.




USD MSRE Program Named CCIM Fast-Track Partner
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On Feb. 3, the CCIM Institute approved the University of San Diego's Master of Science in Real Estate program as a Fast Track Program, making the program one of 18 graduate real estate programs in the country to be approved as a fast-track Alliance Partner.

With the new Alliance Partner status, MSRE graduates can now achieve the CCIM designation by waiving 75 percent of the required coursework, and will typically also meet the professional experience requirement. The designation recognizes the high-quality curriculum and rigorous professional standards expected in USD's MSRE program.

CCIM (Certified Commercial Investment Member) is a professional qualification, typically requiring an extensive period of study and assessment, plus relevant professional experience. It is recognized as a benchmark demonstration of significant professional competence.




Seventh Annual Real Estate Expo Succeeds with New Format
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(l. to r.) Trey Riley, undergraduate student, IREM representative and USD '88 alum Renee Savage, and graduate student Matt Masterson participated in the Seventh Annual Real Estate Expo in the Hahn University Center Feb. 26. Seventeen private and public organizations and more than 40 undergraduate and graduate students interested in pursuing careers in real estate took part in this year's expo, which was sponsored for the first time by the USD Real Estate Society.

This year's expo featured a new speed networking session, during which students were given five minutes with representatives from eight different organizations to network, discuss employment opportunities, secure job-hunting tips and the like. The event also included for the first time a panel of banking experts, including Kurt Huppert, senior vice president at U.S. Bank and a member of the Center's Commercial Real Estate Committee, Mark Tagwerker, senior vice president at California Bank & Trust and a USD alum, and Kelly Souza, vice president at Wells Fargo and a USD alum.






MSRE Students to Compete in ARGUS Challenge
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The University of San Diego has been selected as one of an elite group of highly ranked universities to participate in the first annual ARGUS software challenge. The challenge gives students the opportunity to leverage their knowledge of commercial real estate by solving for real-world investment analysis scenarios using ARGUS software, which is the industry standard for commercial real estate cash flow projection, transaction analysis and asset valuation.

MSRE students Bob Brittingham, Brent Farrell, John Hundley, Bryce Lewis and Sasha Zhang will represent USD in the program and simulate a real-life investment analysis of a commercial real estate property by modeling the provided assumptions in ARGUS. The team will then submit a paper explaining the results of their analysis. Professor Charles Tu is serving as faculty adviser to the team.

A panel of seven judges including three from the academic community, three industry professionals, and ARGUS Software's CEO, Mark Kingston, will participate in reviewing the case studies and nominating the winners. Teams will compete for cash prizes totaling $13,000.

Other participants include: Arizona State University, Baruch University, Brigham Young University, DePaul University, Johns Hopkins University, New York University, Texas A&M University, UC-Berkeley, University of Colorado, University of Florida-Florida Tycoons, University of Michigan and the University of North Carolina.




MSRE Students Assist with Community Planning Project
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MSRE students Astrid Cybulskis, Brad Flewellen and Bryce Lewis will be serving as volunteers to the Kensington/Talmadge Planning Group, which is grappling with the community-wide impact of commercial land use decisions, both public and private, in the Kensington and Talmadge areas of San Diego.

The community is working through the process via a series of workshops. The first workshop, which took place Feb. 26 at the Kensington Community Church, was an information gathering session. MSRE students attended to familiarize themselves with the issues at hand.

The second workshop, scheduled for March 26, will focus on identifying community issues and concerns setting design goals. Students from the New School of Architecture will present examples of similar neighborhoods, along with models and simulations for comparison and discussion. MSRE students will contribute analyses of the feasibility of these ideas.

The third workshop, scheduled for April 23, will focus on producing a consensus document, which will serve as a starting point for the update of the Kensington-Talmadge Community Plan. MSRE students will make specific recommendations based on their feasibility analysis of the ideas generated in the second workshop.

Shauna Pribyl, a '99 USD alum and member of the Burnham-Moores Center's Curriculum & Research Committee, enlisted USD's help with the project.




Alumni Profile
MSRE Alums' Firm Acquires Midwest Student Housing Portfolio
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By Diane Gustafson, Communications Coordinator

Eric Frank
Jason Luker
San Diego-based real estate firm Cardinal Group Investments, LLC (CGI), where Master of Science in Real Estate (MSRE) '07 alumni Jason Luker and Eric Frank are both principals, recently announced its acquisition and redevelopment plans of a 78-bedroom student housing portfolio adjacent to the University of Wisconsin campus in Madison, Wis.

The properties consist of seven buildings total including six stand-alone buildings and a historic 25-bedroom former fraternity house all located in downtown Madison. CGI purchased the portfolio for $4.5 million from a local Madison landlord, and the project was privately financed with $2.9 million in borrowing provided by DMB Community Bank of DeForest, Wis.

Luker started CGI in 2004 with three other partners. He met Frank while attending the MSRE program and by the time the two had graduated from the program, they decided they should be in business together and expand the company. The two both agree that the program was an invaluable experience for them and gave them a more holistic understanding of real estate and the skill sets needed to get their company to take off in the past six months.

"When I started the program," said Luker, "I had a narrow set of experiences and skills with some critical gaps in my education. The program helped me tie everything together and get a comprehensive understanding of all the elements necessary to be a real estate entrepreneur."

The company's business strategy is to focus on a few cities that have large education and government employment bases, which can ride out economic volatility. The acquisition represents CGI's first entry into the Madison market, although the firm is already an active buyer of student housing properties in various markets. CGI also owns housing in Oxford, Ohio, on the Miami University campus, in Denver, Colo. and in California. The firm is currently preparing to raise capital for its pilot student housing fund, which seeks out investment opportunities at flagship universities in the Midwest.

"Midwest student housing provides strong, stable cash flows that hold up in down markets," said Frank. "It's a very specific niche, but we have spent a lot of time understanding it, and we really believe in our strategy."

Frank and Luker are also both very optimistic about their business plan despite the fact that they are entering the market in one of the most challenging times most in the business have experienced.

"As much as our current economic environment presents major challenges, it also creates a great deal of opportunity for young entrepreneurs," said Frank. "We feel like our entry point into the market is very good because while others are unwinding messy deals from their last cycle, we are still putting all of our energy towards fresh opportunities, of which we are seeing a lot of right now."

Added Luker: "Times like these are when the Burnham-Moores Center becomes a critical intellectual anchor in the community. It's a place where people can incubate ideas, benefit from cutting-edge research and debate policy solutions that will help us build a stronger industry out of this wreckage."




Burnham-Moores Center Attends MBA Annual Convention
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(l. to r.) Master of Science in Real Estate students Jacqueline Lee and Bryce Lewis represented the University of San Diego's MSRE program by volunteering at the Burnham-Moores Center's exhibitor booth at MBA's Commercial Real Estate Finance (CREF)/Multifamily Housing Convention & Expo. The annual convention was held at the Manchester Grand Hyatt Feb. 8-11 and is attended by top commercial and multifamily real estate finance professionals from across the country.




Real Estate Society Takes Part in Habitat for Humanity Build
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(l. to r.) MSRE students Courtland Weisleder, Art Panossian, Greg Drobot, Christian von Merkatz, Bryce Lewis and undergraduate student Christopher Mayer took part in a Habitat for Humanity build Feb. 13, which was sponsored by USD's Real Estate Society. This was the second year in a row that the Real Estate Society sponsored a Habitat build.

More than 15 students helped with landscaping and perimeter fencing on the project, which involved 20 single-family houses. Students learned about the financial structure of the entire project, which is being funded by the city of Oceanside and by individual donations. The project is expected to be completed by the end of 2009, and several of the students are planning on returning to help finish work on it.





Mark Riedy, Norm Miller Offer Insight at Industry Events
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Executive Director Mark Riedy, Ph.D., served as a panel moderator during the San Diego Regional Economic Development Corporation's "Close Up on Our Economy: Turning Global Challenges into Regional Opportunities" conference, held Feb. 10 at the University of San Diego. The panel discussed the causes of the current housing crisis, the economic changes that are occurring to help accelerate recovery once it begins and the major hurdles that need to be overcome before sustainability becomes realistic.

Norm Miller, Ph.D., professor and director of academic programs, spoke on a panel that discussed valuation trends in the United States at the 38th Annual Midwinter Housing Finance Conference in Park City, Utah, Feb. 26. The conference served as a meeting place for top industry professionals to discuss business opportunities in 2009 and beyond.




Company Owned by MSRE Alum's Family Featured on Extreme Makeover TV Show
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DeYoung Properties, a Fresno company owned by the family of USD '07 undergraduate and '08 MSRE alum Brandon DeYoung, was chosen to be the home builder for a deserving family on ABC's popular television show "Extreme Makeover: Home Edition." Beginning Jan. 8, the company demolished the Central Valley family's previous home and built them a brand new one in just 106 hours, all with donated products and labor.

The national air date for the show is March 8 at 8 p.m. PST on ABC. Be sure to tune in and see what DeYoung, who works as vice president of operations at the company, describes as "one of the most monumental weeks of my life." For more information on the project, go to http://www.extremedeyoung.com/




In the News
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Louis Galuppo was quoted in an article by Tara Sharp of the San Diego Business Journal about the residential real estate industry. The article appeared in the Feb. 2 edition of the publication.

Norm Miller told Bloomberg about the foreclosure epidemic. The article appeared in a blog on Totalbankruptcy.com on Feb. 4.

Norm Miller appeared on ABC Radio Feb. 6 to discuss his thoughts on loan modifications. He was interviewed by radio journalist Gil Gross, who is heard daily on KGO AM 810 Newstalk Radio out of San Francisco.

Norm Miller was quoted in an article by Realistr.com about the failure of mortgage rescues. The article appeared online on Feb. 13. The same article was picked up by Mortagefanatic.com and ran Feb. 13.

Norm Miller was quoted in an article by Mortgagemm.com about "rational default." The article appeared Feb. 13.

Norm Miller was quoted in a Feb. 13 article in The Daily Transcript about his projections for the retail market.

Norm Miller was quoted in Naybob.com on loan modifications. The article appeared online Feb. 15.

The Burnham-Moores Center for Real Estate held its 13th Annual Real Estate Conference at the San Diego Marriott on Feb. 18. The conference was mentioned in an article by Rebecca Go of The Daily Transcript on Feb. 18, and in an article in the Union-Tribune on Feb. 19.

Norm Miller was interviewed by John Mattes of San Diego 6 on President Obama's mortgage relief program. The story was broadcast Feb. 18.

The "Does Green Pay Off?" study co-authored by Norm Miller was referenced in a Feb. 19 article, "Taking Liberties with LEED," which ran in The New York Times.

Alan Gin was quoted in an article by Zach Fox of the North County Times about the lack of builders as home prices continue to tumble. The article appeared online Feb. 24.



 Calendar

SAVE THE DATES . . .^back to top

Application Deadlines for Fall 2009 MSRE Program
Applications for the first priority round are due March 13, 2009
Applications for the second round will be due June 5, 2009
For more information, go here.
USD Real Estate Alumni Quarterly Networking Event April 9, 2009
Sé San Diego, 1047 Fifth Ave., San Diego, Calif. 92101
For more information, contact Lauren Lukens at llukens@sandiego.edu.
Breakfast at the BMC
April 15, 2009 with featured USD experts Alan Gin, Ph.D., Norm Miller, Ph.D., Ryan Ratcliff, Ph.D. and Mark Riedy, Ph.D.
7:30 a.m. to 9 a.m.
Joan B. Kroc Institute for Peace & Justice, University of San Diego campus
$25.00 per person (registration fee includes breakfast)
For registration questions or information on sponsorship opportunities, contact Diane Gustafson at (619) 260-2379 or dgustafson@sandiego.edu.
Sept. 17, 2009 with featured speaker John Cushman, Chairman of the Board, Cushman & Wakefield
7:30 a.m. to 9 a.m.
Joan B. Kroc Institute for Peace & Justice, University of San Diego campus
$25.00 per person (registration fee includes breakfast)
For questions or information on sponsorship opportunities, contact Diane Gustafson at (619) 260-2379 or dgustafson@sandiego.edu.
MSRE Graduation July 10, 2009
4 p.m.
Joan B. Kroc Institute for Peace & Justice, University of San Diego campus


 Continuing Education

Upcoming Continuing Education Classes
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New class: Creative Investment and Development in Changing Times
Starts March 10, 2009
To register, contact Monica Phelps-Zambrano, or register online
For more information about this class or the certificate program, go here.




Visit us online at www.USDRealEstate.com

The Burnham-Moores Center for Real Estate is committed to delivering outstanding education, industry outreach, career and research services to advance socially responsible leadership in real estate.


 
University of San Diego, 5998 Alcalá Park, San Diego, CA 92110-2492