Universities throughout the United States are paying increasing attention to nurturing educational opportunities for real estate development. In the past, U.S. institutions of higher learning often offered a course or two in the subject, usually in the business curriculum. During the post–World War II decades, a dozen or so universities, mostly in the Midwest, established real estate curriculums. But in the 1970s and 1980s, as financing and developing real estate became more complex, many more universities formulated educational programs aimed at giving students a rational basis for engaging in development. Most programs established graduate curriculums in real estate development or real estate concentrations within business schools or other departments. During the boom years of the mid-1990s to 2007, many universities either founded or expanded their real estate programs, which saw enrollment climb rapidly as they attracted students who expected to have prosperous careers in the industry.
Today, prospects for maintaining U.S. real estate education programs appear to be weathering the crisis in real estate finance. Yet, the highly publicized recent financial problems in the development industry seem to be cooling interest among master in business administration (MBA) students when it comes to majoring in real estate, says Richard B. Peiser, the Michael D. Spear Professor of Real Estate Development at Harvard University and author of Professional Real Estate Development: The ULI Guide to the Business.
Peiser also observes that real estate programs are benefitting from a surge in interest from would-be developers—among them, seasoned executives—wanting to learn the ins and outs of evolving trends in development markets, finance, design, and management. David Funk, director of Cornell University’s real estate program, agrees, noting that his school’s real estate program is attracting people leaving high-paying jobs to prepare for an expected upturn in development.
These observations seem to be borne out by recent experience in Denver, where the graduate real estate programs of both Denver University and the University of Colorado are growing with each new class. Byron Koste, executive director of the Colorado University Real Estate Center in Boulder, reports that “all systems are go” in the center’s curriculum, which includes bachelor’s and master’s degrees in business administration with real estate concentrations, plus doctorates in a joint law and MBA program with a real estate track.
Bolstered by an expanded and renovated building, a new dean, and a vibrant Denver-area economy, the MBA real estate program has seen class sizes rise to 119 students this school year from 55 in 2007. Koste credits the program’s emphasis on sustainable development for the growth in the program. “Students really take to that concept,” he says. Also, the idea of settling in the Denver area after the program appeals to students. The two-year MBA program accepts students only after they have been employed for at least three years, which Koste believes instills in them a valuable base of work experience and escalates their appreciation for learning about the field. Many students come from leading real estate firms that have been stalwart supporters of the program, he says.
Graduate programs in real estate development are also expanding in the Washington, D.C., area, where, as is the case in other major cities, a number of relatively new university programs cater especially to working students. American, Howard, George Washington, and Georgetown universities, plus the University of Maryland, now offer programs in real estate development.
Johns Hopkins University, based in Baltimore but with a strong presence in Washington, established a master of science in real estate (MSRE) program in 1989 within the Carey Business School. Catering especially to students already active in development, it now has about 200 part-time students attending evening classes at either the D.C. or Baltimore campuses.
Michael Anikeeff, chair of the Edward St. John Real Estate Program at the Johns Hopkins Carey BusinessSchool, is especially bullish about the rising number of full-time students—up to 18 from ten within the past two years. Anikeeff says many have careers in related fields such as law and design but want to broaden their insights into the development world and perhaps affiliate with it.
Michael Buckley, who has taught for years in Columbia University’s MBA real estate program, is assisting in the startup of the MSRE program at the Fort Worth Center of the University of Texas (UT) at Arlington. Organized to cater to working students, the center provides them with a place “to soak up skills” to round out their real estate knowledge, Buckley says, particularly in areas such as institutional finance, sustainable development, and public/private partnerships. Students can obtain an MSRE degree in 15 months by attending one evening session and a weekend session each week.
With the current weak economy, the more time-constrained program can help students to prepare for the shifting circumstances they are likely to face as developers, he says. The UT Fort Worth Center, which already has 29 students, is ramping up to train smart analysts attuned to changing conditions, he says.
Two long-established, well-known graduate programs that continue to prosper are the University of Pennsylvania’s Wharton School in Philadelphia and Columbia University’s Paul Milstein Center. Both offer two-year, full-time programs with real estate tracks in the business schools, and both attract substantial numbers of international students unable to find similar programs at home.
During the next two decades, the U.S. population is projected to increase to about 375 million, which will provide a major stimulant for real estate development, experts say. According to urban planner Arthur C. Nelson’s forecasts published in 2006 by the Brookings Institution, to serve this growing population, 40 million new residential units will be needed by 2030 and 20 million existing units will need to be replaced, a 50 percent increase over units available in 2000—demand created in part by reductions in household size. In addition, 50 billion square feet (4.6 billion sq m) of nonresidential space will need to be added to that available in 2000.
The bottom line is that half of all built space likely to exist in 2030 will have been developed since 2000, Nelson forecasts. Demand for that space will drive the market for developers and related professionals, and for their staffs as well.
While potential development markets are expanding, the complexity of real estate development is escalating. Financing norms need to be adapted in response to recent corporate failures. Worldwide concern about climate change and other aspects of the global environment are altering energy equations that affect development financing decisions. More communities are adopting green development requirements involving new technologies and development practices.
Developers are finding more traction in linking private market opportunities with various public programs, especially to capitalize on the availability of urban sites or provision of long-delayed infrastructure improvements. However, such public/private deals tend to complicate and extend development planning and management.
All these factors and others will demand wider comprehension of the inherently interdisciplinary nature of real estate development and continue to boost interest in professional education programs.
