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Congratulations to Andy Krause, Ph.D.!

The Runstad Center is pleased to announce that we have a newly-minted PhD student!

Andy Krause, Ph.D.
Andy Krause, Ph.D.

Andy earned his degree through the Interdisciplinary PhD program in Urban Design & Planning, advised by Runstad Center faculty member Christopher Bitter.  Andy’s dissertation work focused on the policy and market context for urban intensification within the City of Seattle.  More specifically, he developed a toolbox-type planning support system to measure parcel-level land use change within the city.  Using data from this model, he then analyzed housing growth within the City’s Urban Villages and conducted a statistical analysis of the determinants of low-rise redevelopment over the 2003 to 2012 period.  Overall findings suggest that: 1) the City’s Urban Villages have been meeting growth targets; and 2) the low-rise redevelopment process in Seattle is driven primarily by factors influencing profitability and that the importance of certain factors – such as lot size and nearby redevelopment activity – varies over both space and time.

In the near future, Andy will be splitting time between on-going research projects at the Runstad Center for Real Estate Studies and his continued consulting work with Greenfield Advisors, a Seattle-based valuation firm.  He can be reached at

Congratulations, Dr. Krause!

First year students meet with local mentors

While our second-year students were in Chicago for the ULI fall meeting, our first-year students were busy meeting with some heavy hitters in the local real estate community.  Patrick Kassin shares some choice tidbits on his blog about the students’ tour of Stadium Place with Kevin Daniels, and Lei Wu writes in with an account of her conversation with Bob Wallace of Wallace Properties.  Past, present, and future MSRE students would do well to take note of the valuable insights which Lei learned and wishes to share with other young professionals entering the field.

Thank you to all of these talented mentors for so generously sharing their time and wisdom with our students!


A Mentor’s Tips for Real Estate Industry New Professionals

Contributed by Lei Wu, November 10, 2013


Bob Wallace and I met at a NAIOP mentoring event on October 23, 2013. During our brief conversion, I learned that Bob is the CEO of Wallace Properties, which has been an influential real estate company in the Puget Sound region since the 1970s. Its projects are regular features on news media, such as the Puget Sound Business Journal. As successful as he is, Bob seems very down to earth and humble. I yearned to learn about more about him and his recipe for success. Maybe there is an ingredient or two that a newbie like me could borrow right away, which would start me off on the right foot. As swarms of mentees surrounded him at the event, I decided that a separate meeting with Bob later would be the way to go.

Bob generously agreed to meet with me on a sunny Friday morning.  Our one and a half hour conversation was filled with stories of fun and wisdom. The recipe that I was looking for emerged through these stories. The two biggest ingredients that I have heard from these stories are: 1) focusing on your strengths and 2) giving back to the community.

Focus on your strengths. Between two potentially good career options: healthcare management consulting and real estate, Bob made the decision to focus on the latter early on. As Wallace Properties developed into a full-blown commercial real estate company over the years, focusing on strong areas allowed the company’s reputation to develop concurrently with growth. However, the areas that Bob has delegated for outside help are probably as significant as opportunities he has taken on. For example, Wallace Properties does not provide residential property management because this area is not regarded as one of its strengths. What does it do for its own multi-family properties? It hires good residential property management companies.

Give back to the community with what you are good at. “I sort of understand finance and real estate. Those are areas in which I have tried to give back to the community.” Bob’s efforts in a list of diverse community organizations show the point of his words. One example is his involvement as the past chair of the Major League Baseball Public Facilities District, also known as Safeco Field. Another example is Bob’s efforts with Puget Sound Air Transportation Commission as its chair.  A quote that Bob used in emphasizing his point is ”we spend too much talking with ourselves.” You do not have to be a chair in order to get involved meaningfully in a community organization. Bob noted a success story about a young professional, who has been active in community organizations. Apparently, her active community involvement has helped her get to know and work with people. Not surprisingly, she does very well in her professional career.

Now, I have shared my learning from one mentor. I hope you can put it to good use in your future successes.

Bending the Cost Curve on Affordable Rental Development

At the recent 2013 ULI Fall Meeting in Chicago, second-year Runstad MSRE student Craig Ratchford attended a panel session to learn more about research and discussions surrounding the issues of affordable housing development.   He writes in with his impressions of that session, and thoughts about how his MSRE experience has helped him take part in the vital conversation about this real-world dilemma. 

• • •

“There is nothing more complicated than affordable housing development in the entire real estate universe.” – Bending the Cost Curve on Affordable Rental Development panel, ULI Fall Meeting, Chicago, 2013

Before entering the MSRE program, I worked for an applied research and consulting organization focused on measuring the impacts of affordable housing policy and community and economic development in urban areas throughout the country. But while learning to understand the impacts is valuable and important, it was frustrating for my inner pragmatist to understand the difficulty in providing quality affordable housing where it was needed most, but remain so far away from influencing its actual development. I entered the MSRE program at the Runstad Center (and the Evans School of Public Affairs) to learn how real estate, finance, and land use economics intersect with public policy to meet this challenge, and, hopefully, pursue a career confronting this ubiquitous problem.

Many smart people at the ULI conference in Chicago were also confronting this problem. The panel session, Bending the Cost Curve on Affordable Rental Development, showcased a joint research effort and roundtable discussions convened by ULI’s Terwilliger Center for Housing and Enterprise Community Partners. Over the past year, they engaged over 100 affordable housing leaders in weak and strong markets across the country, to identify the most important cost drivers in affordable housing development, and develop strategies to “bend” the cost curve towards more efficient and lower cost affordable housing delivery.

Affordable housing delivery is shaped by a number of procedures, regulations, and policies instituted at all levels of the system – each with its own set of costs. But while there is a rich set of literature on specific regulatory barriers to affordability in general, little research has been done to examine how these issues interact with the financing and costs of affordable housing development. Their research intends to fill this gap.

During the session, the group focused on the following cost drivers:

  • Project scale: small projects, less intensive projects have high fixed costs
  • Project design and construction: higher upfront costs for design and materials are often justified, since the ownership period is typically longer, and limited funding available for future replacement compared to privately financed development requires smart material decisions to reduce future capital investments
  • Financing and underwriting: decreased capital market funding competition (compared to market-rate projects) gives investors greater power to dictate terms; deals must be structured around non-financial terms and goals of multiple funders
  • Capital availability: developers must often begin to scope a deal prior to assembling financing; capital is scarce for smaller or innovative projects; many investors deal in exclusively market-rate or affordable projects;
  • Deal structures: “cost-plus” basis and percentage fees are common, reducing incentives to lower costs; tax credit allocations made years prior hedge risks of cost inflation, and fail to incentive use of anything less than full amount (because the savings reduce the developer fee); strict, increasing reserve requirements, due to higher risks; longer timelines and additional land holding and soft costs, due to project complexity and multiple standards
  • Program and investor requirements: timing and fund distribution are often incongruous with projects needs, directly causing additional constructions costs, higher compensation for the uncertainty of extended land contracts, a reduced pool of potential developers; the challenges of tax exempt private activity bonds
  • Other costs drivers, include incentives to meet social policy goals, poorly designed cost controls (ironically), and costs imposed by local regulations like parking minimums

The differing levels of complexity result in major discrepancies in affordable project costs nationally –examples included lows in the $100’s, up to $500,000 per door in San Francisco.

The session focused mainly on exhaustively identifying the problems. The next research phase intends to produce specific, actionable recommendations for lowering costs in the face of these barriers, with a report expected in the winter of 2014.

The session was interactive. The panel surveyed the audience, to identify their concerns and try to field questions. The back-and-forth between the panel and the audience revealed a very important lesson I hadn’t expected: nobody knows the right answers yet. We’re all exploring. I expected to walk in and learn about bold new plans and strategies professionals used to finance and build affordable housing that were previously off my radar. But it became clear – through this session and in other ULI panels – that there are not simple answers simply waiting to be learned and deployed. Despite years of experience, everyone continues to confront the same challenges and perpetually invent and deploy new strategies. It really is up to us to invent, test, and discover the next generation of affordable housing solutions.

And furthermore, while the panel compiled and succinctly defined the issues and ideas, and certainly helped sort out my thinking, it was no longer new knowledge after a year in the program. Many of the problems had been explored in coursework and resources of the MSRE program – my program experience had taught me the right questions to ask (and often with more nuance than many were addressed during the panel). The professionals in the room, with years more experience, were grappling with the same questions I was. To know that I was on my way to understanding the implications of real-world dilemmas really validated the work my classmates and I had been doing in MSRE.

Maintaining your GRADitude

If you’re considering an advanced degree or are currently in the midst of earning one, you are probably well aware of the sacrifice and hard work it will take to achieve your goals.  How do you keep your eye on the end result of your efforts, while also remaining present in the moment and appreciative of your time as a student? Here is a thoughtful and timely piece with three key suggestions to help you “maintain your GRADitude.”

We at the Runstad Center would like to wish everyone in our community — our students, alumni, board, job and internship sponsors, university network, friends far and wide — a very happy Thanksgiving!


Mark your calendars for 2013 IREM Forecast Breakfast

Runstad Center director Dr. Stephen O’Connor will moderate an all-star panel at the 2013 IREM Forecast breakfast on December 6 at the Bellevue Westin.  The panel includes Dr. Svenja Gudell, (Zillow), Joe McWilliams (Port of Seattle), Dave MaGee (Cushman & Wakefield) and Matt Rosauer (Pine Street Group).  The breakfast will also feature a keynote by Dr. Stan Humphries, chief economist at Zillow.

More information and a registration form may be found here: IREM Brochure_ForReference.


More from Chicago – and its newest skyscraper

MSRE ’13 student Eric Hadden writes in with another report from our students’ recent trip to Chicago for the ULI 2013 Fall Meeting.  Read on to hear all about their trip to 155 Wacker, Chicago’s newest office tower.


As a part of last week’s ULI events, Runstad Students received an exclusive invite to tour Chicago’s newest office tower, 155 North Wacker. Our hosts from John Buck Co. took us behind the scenes of this Class A+ office tower and explained the process of developing this project in the middle of the Great Recession.

155 wacker1

From blocks away, it is apparent that 155 North Wacker is exceptional, as it rises above the structures around it. The grand entry is designed to bring the outside in and the inside out, and many of the design elements and materials run through the building to the street. Another notable characteristic of the building was the level of highly visible security. In addition to a full-time security staff monitoring the building’s entries, access cards were needed to enter the elevator lobby. Runstad Center Board Chair Lisa Stewart joined us on the tour and noted that this is unique to some of the larger office markets in the country.

155 wacker2 155 wacker 2a

The grand entry and high level of security speak to the building’s Class A position in the market, but the building includes a “checklist” of other amenities that allow it to compete in this sector of Chicago’s office market:

  •       Secured Entry
  •       White linen table restaurant
  •       Café
  •       Sundry Store
  •       Below-grade Parking
  •       Conference Center
  •       Fitness Center

After exploring the building’s lobby, we went up a level to the high-tech conference center that was available for tenants to reserve. This was included as an amenity for building tenants, but it is operated in a way that makes it financially self-sustaining. On the same floor was another one of the buildings amenities – the fitness center. The center provided members with all the services found in a typical fitness center but with the added convenience of being in the building.

The tour finished in one of the few vacant spaces, which gave us a chance to hear a little more about the life of this project and future projects that John Buck Co. has in the pipeline. Bringing a million square foot office building to Chicago in the recovery stage of a recession was no small feat. The hardest part was lining up tenants while also trying to line up capital (a chicken and egg scenario), but John Buck Co. was able to secure tenants and financing for a 2007 construction start.

155 wacker 3

Moving forward, the company has plans for another office tower on the site across the street. We were told that the market can likely only support two more projects like this, and with three in the planning stages, it is a race to see who get there first. The last to the get there will likely have to put their project on hold until demand grows.

The tour was insightful and a great addition to our activities in Chicago. A big thanks to Suzanne Cartwright, Matthew Simo, and John Buck Co. for making the tour happen and to Lisa Stewart and Cleita Harvey with Urbis Partners for joining.


BE PhD Colloquium with the Runstad Center Affiliate Fellows

Runstad Center Affiliate Fellows class of 2013: Kelly Hogg, Alvaro Jimenez, Gabriel Grant, Eric Becker, Lisa Picard, Ken Yocom
Runstad Center Affiliate Fellows class of 2013: Kelly Hogg, Alvaro Jimenez, Gabriel Grant, Eric Becker, Lisa Picard, Ken Yocom

The Runstad Center Affiliate Fellows presented excerpts from their live documentary, PLACE CAPITAL, earlier today at a lunchtime colloquium hosted by PhD students in the College of Built Environments.  This year’s Affiliate Fellows traveled to Berlin, Krakow and Detroit to study the strategies and synergies that create value and vitality in challenged urban environments.  They produced a film with vignettes documenting their key observations and shared several of those film vignettes in their presentation.  One key theme revolves around the “sharing economy” and how collaborative consumption (co-working, AirBNB, Zipcar etc.) is reshaping the demand for urban spaces.  Faculty respondents were on hand to spur the dialogue – including Carrie Dossick, Gundula Proksch and Susan Jones.

The purpose of the Fellowship is to engage the college community in an interdisciplinary dialogue with practitioners in the field.  The group that gathered today engaged in a rich discussion around the tension between co-creation of spaces and regulatory requirements that tend to chill innovation and creative expression.  Real estate students were active participants in the conversation, and at the end of the session were recruited to participate in an interdisciplinary studio which will examine waterfront development in Seattle.

November 26: brown bag with the Buerk Center

On Tuesday, November 26 from 1:00 – 2:00 in Gould Room 440, the Runstad Center will host a brown bag with Amy Sallin and Sam Ogle of the Buerk Center for Entrepreneurship at the UW Foster School of Business.  Sam will be presenting the Entrepreneurship Certificate program which a number of MSRE student peers and predecessors have used their interdisciplinary electives to complete.  Amy will be discussing the Business Plan Competition which is held each year during Spring Quarter.  MSRE students have competed and done very well –  Chris Bajuk won the competition two years ago with his Urban Harvest plan, and last year a team of students made it to the round of 16 with Elemental Hotels, a micro-hotel concept.  All CBE students with an entrepreneurial bent are encouraged to attend – this is a great chance to learn more about the opportunities here at the UW to support your aspirations.  See you there!

More from ULI’s 2013 Fall Meeting… and Chicago’s Secret Spaces

MSRE ’14 student Louisa Galassini sends in these beautiful photos from another tour she took at last week’s ULI conference.  Organized by the Chicago Architecture Foundation, this tour took her behind the scenes of several of the city’s best spaces.

First stop, the architecture office of Goettsch Partners at the top floor of the Railway Exchange building:


Views out of the iconic porthole windows of the Railway Exchange Building

Railway ExchangeRailway Exchange 2

The University Club’s historic Cathedral Hall

Cathedral Hall

A walk through Millennium Park, a 400 million dollar project completed in 2004


Frank Gehry’s Pritzker Pavilion in Millennium Park


Backstage at Frank Gehry’s Pritzker Pavilion


The 41st floor of the Kemper Building – the first 360 viewing deck in the city of Chicago, open for the third time in 40 years





Second-year students head to Chicago for the 2013 ULI Fall Meeting

The Runstad Center sent several students from the MSRE class of ’14 to Chicago last week for the 2013 ULI Fall meeting.  Guest blogger Louisa Galassini writes in about their tour to the Roosevelt Square neighborhood, below. 

Public Housing Redux: Roosevelt Square

The Chicago Housing Authority (CHA) was founded in 1937 and is currently the largest owner of rental housing in Chicago, providing housing to over 50,000 people. Despite this, the history of pubic housing in the city is marred with violence and controversy. In the 1950’s and 60’s, the CHA developed 11 high-rise buildings concentrated in poverty-ridden areas. The height and design of these projects made them difficult to monitor and fueled dangerous and violent behaviors in their residents.

In response to the problems, Dorothy Gautreaux and several other CHA residents filed a lawsuit against the CHA for isolating their developments in areas of concentrated poverty. The suit took 30 years to come to resolution, but in 1996, the case of Gautreaux v. Chicago resulted in a takeover of the properties by the US Department of Housing and Urban Development (HUD) and a consent decree to redevelop the housing projects.

In order to revamp this public housing, Mayor Daley helped establish the “Plan for Transformation” – a redevelopment at the site of former public housing towers in Chicago’s Near West Side. The plan was built with the concept of mixed-income housing, providing 1/3 public housing, 1/3 affordable, and 1/3 market rate units, and currently stands to become the largest public housing redevelopment in the country.

Related Midwest was selected as the master developer for this new “Roosevelt Square” neighborhood. The project spans 135 acres, with 4,441 housing units to be completed in 6 phases. There is a 45/55 mix of rental and for sale housing, serving income ranges of 60-120% AMI in addition to Section 8 housing and market rate units. The original timeline anticipated completion in 2020, but the recession in 2008 caused major delays and currently only 500 units have been completed.

The housing style is notably different from its high-rise counterparts, which have long since been demolished. The community requested traditional Chicago building styles, producing almost entirely 3-flat brick structures in the first phase. With a relatively unchanging ground plane, similar building types and finishes, and a lack of product type the neighborhood is far from dynamic. Limited in how it is able to spend funds, hopefully the CHA can find creative ways to bring vitality to this new development.

Introduction by Sarah Wick, Related Midwest
Introduction by Sarah Wick, Related Midwest
Touring Phase One with Al Levine (Seattle Housing Authority), Rod Brandon (Seattle Housing Authority) and Hal Ferris (Spectrum Development)
Touring Phase One with Al Levine (Seattle Housing Authority), Rod Brandon (Seattle Housing Authority) and Hal Ferris (Spectrum Development)


Touring Phase One with Al Levine (Seattle Housing Authority), Rod Brandon (Seattle Housing Authority) and Hal Ferris (Spectrum Development)
Touring Phase One with Al Levine (Seattle Housing Authority), Rod Brandon (Seattle Housing Authority) and Hal Ferris (Spectrum Development)