To invest or not to invest? UBC Sauder hosts prestigious International Real Estate Competition
It's a decision with high stakes: do you invest in a luxury 425-unit condominium in the heart of downtown Seattle and become an equity partner, do you propose an alternative, or do you pull out altogether and cut your risks?
There are several ways one can approach this project — and some students got to test theirs at the recent UBC Sauder International Real Estate Case Competition.
Participating teams from 16 global educational institutions — including Cornell University, University of Cambridge, University of Hong Kong, University of Auckland and Renmin University of China — attended the international case competition hosted by UBC Sauder at the Robson Square campus in Vancouver.
Professor Tsur Somerville, Senior Fellow at the UBC Centre for Urban Economics and Real Estate and faculty lead at the event, said the competition is home to some of the brightest students and solutions.
"The degree of depth, detail and the rigor of the analysis the students do — it's tremendously impressive. Their presentations are polished and their answers during the Q&A show real knowledge," said Somerville.
"It's impressive every year and I'm like 'wow, these guys are good.'"
Among these talented students were members of the team representing UBC Sauder: Meeran Amir, Vittorio Chiu, Dylan Diep, Greg Hengel, Tamara Lim, and Bryce Young.
From Wall Street to Vancouver
The high quality and level of competition reflects an event with a long-standing tradition. The International Case Competition started with Cornell University and Professor Dan Quan 11 years ago, with the event held at Wall Street in New York City.
The 2019 edition was the first to be hosted in Vancouver, made possible by generous sponsorship from Vancouver-based QuadReal Property Group and other industry partners.
Somerville said the event is grounded in real-world scenarios and it goes a long way in taking lessons beyond the classroom. "They have to think about the real market. It's tangible — they can sort of feel and see what they're talking about," said Somerville.
"None of these things are actually make-believe."
Tsur Somerville, Senior Fellow at the UBC Centre for Urban Economics and Real Estate, said the event is grounded in real-life scenarios that take real estate lessons beyond classrooms.
Invest or pass?
And it's especially not fiction when developers and investors with decades of industry experience judge the competition. Twenty-four judges attended the event and parsed through multiple preliminary rounds. Each round was followed by a feedback session and Q&A — and it came down to five teams presenting in front of seven judges in the final round.
Students from Indiana University, University of Cambridge, Cornell University, University of Texas and University of Auckland picked apart the case with meticulous detail to sell their multi-million-dollar decision to the judges — invest or pass?
Student presentations zeroed in on Seattle's market profile: what's driving property prices in the city? What's the average wealth in the neighbourhood where the luxury condo is proposed? How are Seattle's tech giants influencing property demand?
Teams also had to factor in contingency costs when — just as it sometimes does in the real world — construction costs spiral due to inflation.
The level of preparation and in-depth analysis impressed Cindy MacMillan, Director of Asset Management at Anthem Properties and one of the seven judges in the final round.
"It was very interesting how each of them seemed to look at it [the case] through a different angle. It also speaks a lot about real estate and how intricate and detailed it is," said MacMillan.
"These are young, bright people, and the competition shows their passion and their care for the industry. And I think they'll do really well."
MacMillan said the feedback students received after their presentations should inspire them to sharpen their thinking on new solutions to cases.
Cindy MacMillan, Director of Asset Management at Anthem Properties and one of the judges in the final round, said the varied team strategies to the same case illustrated the intricate nature of real estate.
Beyond the learning curve
Students from University of Auckland walked away with that inspiration, and also the first prize at the competition. The six-member team proposed a comparative analysis between investing in the luxury condo versus the alternative of turning it into a multifamily rental development for the Seattle neighbourhood.
After a thorough probe of the market, construction costs and detailed number-crunching in front of the judges, the team opted to invest in the condo.
Jordan Parratt from team Auckland (which went by the moniker "Jade Capital" at the competition) said the event offered a valuable international experience.
"To be able to compete at such a high level and with an environment where all students are bringing their best — it's an awesome learning experience," said Parratt.
"We'll all go back to New Zealand having known a lot more about investment, property risks and everything else that was discussed today."
The team from University of Auckland won the top spot at the case competition. From left: Taraani Mohmmed, Ben Crosland, Rosa Henderson, Amaan Merchant, Jordan Parratt and Reuben Payn.
But the experience came with learning curves. Team member Taraani Mohmmed said they worked extra hard to catch up with Seattle's unique real estate regulations and property environment. For instance, Mohmmed noted that in New Zealand there's no distinction between a condo and multi-family development.
"Getting our heads around that before actually getting to the critical issue of the case — I think international teams have a bit of a late start on that," said Mohmmed.
"But we learned a lot about research because we had to start from scratch, and that was really good."
All teams had only five days to learn about the case and develop their presentations.
Research and preparation didn't come easy, especially when the team flew out of the comforts of home territory for the competition. For future participants, Parratt had simple advice: work hard from the get go.
"The more hard work you do at the front, it really does help at the end. I think that's what made the difference for us today."