Today, the real estate industry is experiencing massive disruptions like never before. Climate change, new technologies, and demographic shifts are having far-reaching impacts to real estate products and demand. Practitioners need to be equipped to navigate these changes with knowledge and confidence.
At a recent meeting in Baltimore about talent development, a CFO of a major real estate investment trust said, “I have plenty of folks with grit and smarts who can grind through any problem in real estate. What I am lacking is folks who can lead.”
How can the industry develop those kinds of leaders?
The business school model
Business schools may not immediately come to mind as a solution. In reality, though, business schools are well placed to open practitioners’ minds to the broad spectrum of innovation at the frontiers of the real estate industry, future-proofing their careers, and enabling their employers to meet the challenges of a world in flux. Business schools do this by collaborating across disciplines, emphasizing strategic thinking and influence skills, focusing on emerging technologies, and building centers of sustainability focused on the built environment.
Real estate calls upon the work of many academic disciplines: economics, finance, engineering, accounting, and architecture, to name a few. Business schools foster a similar multidimensional approach.
The practitioner-oriented model that many business schools have adopted exposes a student to complex challenges, such as understanding the origins of housing unaffordability and different methods of addressing it. The student gains the multidisciplinary tools to analyze and find creative solutions to those challenges. With this model, graduates become real estate practitioners who know not just how to build proforma models but also how to lead real estate enterprises.
“Part of being a leader is developing the ability to make strategic decisions,” said Johns Hopkins Carey Business School Lecturer Seydina Fall, a longtime ULI member and the academic director of Carey’s Real Estate and Infrastructure master’s degree program. “Business schools have a long history of teaching strategic thinking, including how to analyze complex problems, identify opportunities, and generate unique solutions that can provide a competitive advantage.”
More than book smarts
At its core, real estate is a relationship business. Employers and developers need to sell their vision in front of investors, community boards, zoning authorities, and others. For real estate practitioners looking to advance in their careers, business school offers a unique opportunity.
“Business schools are known for teaching ’hard’ or technical skills such as mathematics, statistics, financial concepts, programming, and database management,” said Fall. “But ’soft’ or influence skills such as empathy, resilience, compassion, and adaptability also play a foundational role in the business school education.”
Business schools are also a hub for understanding emerging technologies, such as financial technologies, or fintech, which give rise to faster execution of trades, increased transparency, and lower transaction costs. Real estate is primed to follow a similar path as new property technologies—proptech—have taken off in recent years. This influx of technology is changing all aspects of real estate, from construction to building management to investment to data collection.
Take the case of “smart real estate” or “smart buildings,” which use software to optimize real estate asset operation and management, from individual buildings to entire cities. This allows practitioners to analyze disparate but crucial data, like tenant experience and energy performance, in real time. Practitioners with a business school background develop deeper understandings of the industry because they get exposure to what the industry has learned, giving them insights into the fintech field while also preparing them for proptech.
Standing on sustainability
Business schools may offer courses on net-zero real estate development or decarbonizing their own campus buildings as proof of concept. But they reach beyond classrooms and textbooks. Many business schools have set up centers for sustainability. These centers have staff and resources dedicated to advancing research, teaching, and outreach on sustainability. Through these centers, real estate practitioners have access to research and other evidence-based resources at the frontier of sustainable real estate. The centers and other elements of a business school yield practitioners prepared for social challenges related to climate change and income inequality.
With a horizon like the one in real estate and development, practitioners need more preparation. Research, strategic thinking, influence skills, and a focus on emergency technologies and sustainability will be crucial. Business schools are uniquely positioned to teach practitioners how to take advantage of the many changes disrupting the real estate industry today, and prepare them for what is next in real estate.
