Today MSRE Candidate Adam Boyd shares his impressions of the Bishop Arts District in Dallas…
Dallas is an odd city with some cool areas. The Hyatt Regency—basically an island between the prison and some train tracks—was not in one of those areas. But luckily Ubers are cheap there. The first evening in town, another student and I took a Lyft (also cheap) to the Bishop Arts District. Our Lyft ride was like a segment out of the film Slacker—our driver had started a consulting business which had a business plan to generate “infinite revenue” for its clients by convincing them that they were “priceless.” The Bishop Arts District was originally developed in the 1920s as warehouses and shops, but the area eventually fell into decline. Then in the 1980s, many of the storefronts were purchased by a local, Jim Lake, who saw a bargain. Lake brought in a police storefront to bring a sense of safety to the area. Over the years, renovations were made to make the area more walkable and murals and brick pavers gave the area its unique feel. Today it is filled with independent shops and restaurants that spill onto the street. Live bands perform on the sidewalks—including one of the best cover bands I’ve ever heard. I highly recommend a trip to the Bishop Arts District for anyone who wants a small town feel in the big city.
Today we begin a series of blog posts from our second year MSRE students, who recently attended the 2016 Urban Land Institute Fall Meeting in Dallas.One of the many benefits of an education at the Runstad Center is the unique opportunity to travel to a national conference and have exclusive access to a number of prominent figures in the industry, which is funded through generous donations from the Runstad Center Advisory Board. Evan Wong, MSRE Candidate 2017, shares his experiences in Dallas…
Following our ULI Young Leaders Group tour in Ft Worth yesterday evening, things were moving rather slowly for me in the morning. I woke up at 7 am (5 am PST) to get some work emails out and ran down to the café for an espresso where I ran into two of my MSRE compatriots, Brendan Mason and Amy Hartman also on their laptops in the lobby. Laughs were shared and pleasantries were exchanged as we bleakly looked on into our computer screens; our minds a bit fatigued but we were determined to get our school assignments completed and work emails sent.
It’s still relatively early in the trip, but the best thing about Dallas so far has been the weather. 85 degrees and partially sunny with a slight breeze throughout the day. Not the best suit weather certainly, but the conference rooms were frigid and I guess it kind of balanced out. I haven’t gotten to explore to much of the city given our dense schedule, but I did manage to sneak away to Klyde Warren Park on Monday for a few minutes of serenity and relaxation.
On Tuesday morning, we met with Hal Ferris, founder of Spectrum Development and Molly McCabe of ULI’s Responsibility Property Investment Council. Molly is a firm proponent of triple bottom line investing, which emphasizes a focus on profits, people, and environmental sustainability when evaluating real estate returns. It’s an interesting concept, and one that I just previously heard about earlier this quarter at The Evans School in Joaquin Herranz’s Public Policy 566: Community Economic Development class. Joaquin however stresses a quadruple bottom line approach, adding creativity as the fourth factor in the equation. It’s so exciting to see concepts that we learned about in the classroom being applied to the present in the real estate industry.
Following our meeting with Molly and Hal we then met with Scott Matthews of Vulcan to give us the State of the Union for Paul Allen’s development powerhouse. While they are known for their development of the Amazon campus and reinvigorating South Lake Union it was interesting to hear about the entitlement and community feedback process that they are currently going through for 23rd & Jackson in the Central District. Like all accomplished development companies, Vulcan takes community engagement very seriously and is actively working with all parties involved to develop a project that matches the needs of the community with Vulcan’s underlying ideals towards development and revitalization.
What happens when you bring a Visiting Graduate student from Germany and a 2nd year MSRE student together for a conversation?
The 2016-2017 school year has just started, and with it comes a group of fresh students with new ideas and career goals. Second year students begin this year with a big milestone in their future: graduation. The Runstad Center offers ample opportunity for networking amongst students and the industry, but this time we decided to invite a first year student and a second year student for a more intimate conversation. Joining us today are Korbinian Wenzl, MSRE Candidates of 2017, and Brendan Mason, MSRE Candidate of 2017.
Korbinian Wenzl is a 1st year MSRE student who is participating in the inaugural exchange program between the Runstad Center and the University of Regensburg in Germany. While this isn’t his first time in the US, he is getting his first dose of American education. After completing his first masters year at the International Real Estate Business School at the University of Regensburg, Korbi has just completed Orientation week and is enjoying his first quarter of the MSRE program.
Brendan Mason is a 2nd year MSRE student and an experienced project manager at Olympic Property Group. He is currently working on Harbor Hill, a 330-acre master planned community in Gig Harbor while simultaneously completing his Masters of Real Estate degree.
Given that tuition is free in Germany, we were especially curious to hear what brought Korbi to Seattle. It turns out he really wanted to get to know our educational system. “In Germany, classes are heavily lecture and exam based. Here, we have more discussions, which I find very interesting.” Says Korbi, “Of course, the UW and Runstad Center also have a great reputation.” He’s additionally attracted to Seattle’s growing real estate market and influx of capital. Finally, Korbi is also a big outdoor fan. “I can drive 30, 45 minutes and go hiking, kayaking, all sorts of activities!”
Since graduating from University of Puget Sound with his business degree, Brendan knew that he wanted to become a real estate developer. His career has included positions with Lease Crutcher Lewis and Olympic Property Group, but Brendan wanted additional education to compliment his work experience. “Back in 2006, I thought about the University of Southern California’s program. When the Runstad Center added the MSRE degree, I knew I wanted to be at the University of Washington. This is my home market and I’ll be able to obtain my degree while still gaining valuable experience in my role at Olympic Property Group,” Brendan says.
The most surprising aspect of the Runstad Center for both Korbi and Brendan is the incredible amount of industry support. “During Orientation week, we met so many people. Through this program we get to really know the real estate industry and our advisory board,” says Korbi. He nods in agreement, as Brendan adds, “We got to see the industry behind the scenes, where most people don’t get to see. I knew I would network and make friends, but this week solidified us as a class, and we built strong relationships even before our first class.”
“At first I couldn’t believe I needed to take a week’s worth of vacation to do Orientation Week,” Brendan laughs, “but it was totally worth it.”
“So why real estate?” asks Brendan, noting Korbi’s youth. Korbi is 22, but has known since high school that he wanted to work in real estate. “I’m creative, but I want to organize. Real estate is a perfect match of both worlds for me,” Korbi explains. Following graduation, he will be going back to Germany where he will work for his sponsor, the Staudinger Group, for five years. “I’m still trying out different aspects of real estate, but I’m drawn to development and asset management at a portfolio level, which are all important business lines at Staudinger,” he adds, “Following that, we’ll see where I go, depending on the opportunity, of course!”
Korbi poses the same question to Brendan. Why real estate? What aspect of real estate are you drawn to? “I’m pursuing development,” Brendan responds, “During undergrad, I thought I’d pursue a career as a financial advisor and did an internship at Morgan Stanley. After a few months, I knew it wasn’t the right fit for me. My business school invited alums to talk to us every Thursday night. On one of those evenings a gentleman by the name of Tom Leavitt explained to us his transition from being an attorney to a real estate developer. By the end of his presentation, I knew that I would do whatever it took to become one myself. I love being a developer because you get to see your project when you finish. You get to live it and it lasts a lifetime.”
“It lasts a lifetime. I love that,” responds Korbi.
“To your point, real estate development allows me to be creative. For my current project in Gig Harbor, I’ve collaborated with my team and an artist to build a natural park that engages with the community. The whole project will include single family homes, multifamily units, retail, and numerous parks and trails. It is a beautiful example of what the Growth Management Act set out to do; increase density while preserving greenspace. I don’t know where else I can have such a cool job!” Brendan says enthusiastically as he shares photos of artwork for the parks.
As future leaders of the real estate community, the conversation turns to the biggest issues facing Seattle. Despite only having lived in Seattle for a month, Korbi immediately answers, “Easy question. Transit. Especially coming from Europe.”
Brendan laughs and agrees, and then adds, “Population growth is also a big challenge. As a developer, I’m against urban sprawl. We need to be able to do more infill projects in order to preserve our resources and natural landscape. Also, I’m excited for the potential of driverless cars and what that means for development. Parking structures might be a thing of the past and they make great redevelopment sites.”
Despite these challenges, Brendan and Korbi both love Seattle. Some of their favorite things? “Tango’s El Diablo dessert,” says Brendan, “You need to go try it.” Korbi is game, but he is enjoying Seattle because of the great opportunities and easy access to the mountains and outdoor recreation. Brendan agrees and says “If you like the mountains, you should come with me night skiing after class during winter quarter, there isn’t a better way to end a day after class.” “That sounds great”, replies Korbi as the two start planning their wintertime adventure.
New MSRE students dove into their school year on Monday, September 19, 2016 with a week-long orientation that took them from the University District to Bellevue, Pioneer Square, Downtown, to Kent.
“The Runstad Center has multiple goals for its’ week long orientation program for students. We want students to begin their studies with inspiration from the best projects and most engaging leaders in the industry. We want students to connect with the industry from the get go – to learn about the industry organizations and how they can participate in them; to meet the advisory board members, mentors and our alumni so they can call on them as resources throughout their time with us,“ says Suzanne Cartwright, Associate Director of the Runstad Center.
During this week, the MSRE Class of 2018 met with faculty and professors to learn about the robust curriculum and elective offerings provided by the Runstad Center, and were introduced to real estate community networks, including ULI, NAIOP, CoreNet, and CREW. This ambitious week also had the students visiting some of the most prominent projects in this region, notably the new Amazon Headquarters, the Spring District, and the new Weyerhaeuser Headquarters.
Taryn Rehn, MSRE Class of 2018, said, “It was an action packed orientation week filled with inspiring speakers, events, and tours. We got a rare tour of Amazon headquarters wherein the Director Global of Real Estate and Facilities described how their workplace design strategy supports the dynamic company culture… Part of the reason I chose the Runstad program was the involvement of the greater Puget Sound real estate community. This extraordinary level of support became evident as dozens of industry leaders offered presentations, did facility tours, and attended welcome events.”
Orientation week also allowed the new students build rapport with each other. As Suzanne puts it, “…we want them to build esprit du corps among themselves – to appreciate the diversity of perspectives and experiences that each student brings to the class – and to create a community of learners, an atmosphere of safety within which risks can be taken. An intimate graduate seminar program located in a dynamic, progressive city deserves no less!”
The Runstad Center is built on incredible industry support. This busy week allowed the next generation of real estate leaders to meet with well over 80 established real estate professionals.
“The Orientation Week is something that really sets this program apart… and it absolutely started the academic year off on the right foot… I was very impressed with the individuals who donated their time to meet with us all around the city. We met executives, developers, construction managers, property managers, brokers, and the list goes on and on. Their willingness to share their expertise and insight with us was very much appreciated,” said Will Mentor, MSRE Class of 2018.
“Local real estate professionals met with us in mentorship groups and one on one. Not only are they willing to be available while we’re in the program but they wholeheartedly want to be a helpful resource. They’ve made a long term commitment to the success of the Runstad program and its’ ability to produce future industry leaders. I was impressed by their generosity, being willing to volunteer time out of their busy schedules… Overall it was a fun, memorable week and set a very positive tone for our studies at the Runstad Center,” added Taryn.
Four Runstad Center students participated in the 2nd Annual CoreNet Global Challenge, in which student teams from universities around the world apply their education to one real-world issues facing companies around the world: how to attract, retain and motivate the next generation of knowledge workers. Putting themselves in the position of a consulting team to a large, multinational corporation, Hang Yin, Zi Cai, Youyang Wang, and Mingzhe Wang, developed an approach that fully reflected the diversity and experience of their team. “…We identified several key questions that we can investigate and address in the final competition, such as: in many organizations, leaders make decisions on what kind of space/culture one organization should have. However, is there a way to improve so that employees can make decisions on space or culture, or if there is a mechanism for leaders to better understand what their employees truly want,” reflects Hang. The team was advised by CoreNet Washington members and faculty advisor Kelli Leith.
Hang adds, “I think this competition provides us a good opportunity to stretch our thinking on how to make an organization more attractive. More specifically, we spent time doing research, narrowing down our topics, discussing and providing our answers, and networking and asking for feedback during this competition. Considering none of us had opportunities making corporation strategy directly, we thought that this competition made us a really valuable experience.” While the team’s submission was not selected for the final round in Philadelphia, their application will still be considered for the CoreNet competition in Shanghai in 2017. In preparation for this potential, the Runstad team will be looking at the Philadelphia winners’ proposals, and reflect on potential upsides to include in their own proposal.
Celeste Lenon has enjoyed a multifaceted career, having worked in architecture, technology and finance. Her collective experience led her to her current role as COO of MG2, an international architectural and design firm headquartered in Seattle. MG2 is well known for their robust portfolio in retail, food and beverage, and hospitality, and in Seattle, they are currently working on the Altitude Hotel and Residences, and Tower 12 in Seattle. Celeste is responsible for improving company processes, and oversees accounting, marketing, human resources, IT, and program management. As COO, Celeste fully recognizes the importance of understanding the diverse industries her firm interacts with, which led her to enroll in this year’s UW Commercial Real Estate Certificate Program. “Being very data driven, I want to understand the full process so that we can be a better partner to developers by understanding what drives them.“ The CRE program’s multidisciplinary curriculum was of great appeal to Celeste, who hopes to bring what she learns in the program back to her team. “We can make better decisions if we are more informed and can get ahead of the curve.”
Outside of MG2 and the CRE program, Celeste enjoys taking cooking classes and tending her garden, and spending time with her three kids and two horses.
The Urban Land Institute Regional Cascadia Conference of 2016 was hosted in Vancouver, BC this year over the weekend of June 22nd. The Runstad Center for Real Estate Studies was represented by Ka-Chung Kwok (Class of 2017) and Alastair Townsend (Class of 2017) as attendees to this event. The following post is Ka-Chung’s impressions of the conference. The Runstad Center Advisory Board’s generous donations helps to send students to one regional or national conference while earning their degree.
This conference was initiated by keynote speaker Mark Gilbreth – Founder of Liquidspace – a company that leverages mobile technology and social networking to capitalize on shifting needs of modern workplace tenancy. Based on a business model often referred to as “AirBnB of office space”, Liquidspace aims to activate structural vacancies caused by the traditional long-term multi-year leasing model. Mark’s keynote provided insight into the future of commercial office space brokerage as one that is becoming multi-faceted, real time data-driven and collaborative in nature between traditional brokerages with new technology driven participants. He predicts that by 2020 fifty percent of all office space transactions will be online.
A Panel discussion titled “The 21st Century City” then followed involving Real Estate experts and policy makers from Vancouver (Councillor Raymond Louie, Marc Josephson – Grosvenor Americas), Seattle (Garbriel Grant – Spectrum Development) and Portland (Lisa Abuaf – Portland Development Commission). This discussion compared and contrasted the recent growing pains found common to all three cities – rapidly escalating real estate prices, shortage of affordable working-class housing, and the complexities in providing effective Transit oriented developments. Each city took different approaches in crafting their policies with some common goals – Increasing affordability of housing, expanding transit options, and densification of the urban core. There are also some very unique factors – While Seattle is faced with a severe shortage of condominium supply for first-time home buyers due to the development risks associated by the Washington Condo Act; the reverse effect is happening in Vancouver where there is a shortage in supply of rental units.
The second half of the ULI conference focused on Site tours of notable upcoming development projects and recently completed projects in Vancouver. Highlights include Telus Garden and the Central post office adaptive reuse project in the downtown Core, Marine Gateway Transit oriented development along the Canada line, Brewery District in Westminster BC and the Downtown Eastside Urban Renewal project.
The Runstad Center’s Washington State Condominium Report was released today. MSRE student, Center researcher, and author of the report David Leon shares his thoughts…
The City of Seattle has been experiencing unprecedented population and economic growth over the last five years. As the city’s population has increased and the number of high-paying jobs has grown, prices for housing have increased significantly. Condominium development could provide an affordable in-city option for new housing. At present, condominiums are not being built in sufficient numbers to meet demand, and those that are being built are being sold at prices that are beyond the means of the average-income individual. Reasons for this dynamic include financing and capital markets, insurance coverage, and to some degree, legal liability for condominium developers. This paper examines the current state of the housing market in Seattle, focusing on construction of new condominiums, with comparisons to six other Western cities. The paper then examines elements of the Washington Condominium Act that may bear on the heightened liability for condominium builders, and suggests some options for reducing the liability, after comparison to four other states and the Canadian province of British Columbia. Changes to the Washington Condominium Act may be necessary but not sufficient conditions for the building of more affordable condominium units in Seattle. Financial incentives may be required to create the conditions for more affordable condominiums. For the market to be incentivized to build more affordable condominiums without public subsidy, economic opportunity for builders must offset the greater perceived risks and inefficiencies of smaller scale building through lower costs. Insurance costs and the risk of litigation are factors that, if mitigated, can contribute to tipping the scale toward the delivery of more affordable for-sale condominium product.
Sales price tranches for Seattle new condominium sales, 2010-2015.
The Center’s findings were discussed further with UW Today. Click here for the full report.
Several of our MSRE students recently visited San Francisco for the ULI Fall Meeting. David Leon shares his thoughts on the changes and challenges in that city, and how they compare to the ones we are facing here in Seattle. Thanks, David!
A former colleague once said to me Seattle reminded him of San Francisco 15 years ago. I find that there are many parallels: both cities are land-constrained, surrounded by beautiful scenery, tech-industry hubs, and are facing affordability and livability issues in housing as their growth cycles compound.
At the ULI Annual Conference earlier this month in San Francisco, both walking around and in conference sessions, I noticed many changes that may be coming to Seattle. San Francisco’s waterfront highway has already come down, and the industrial waterfront has been transformed into tourist, office, and retail space. Oakland, the blue-collar city across the bay, is now the regional shipping and industrial port. Seattle’s viaduct will be gone soon, and a similar transformation could happen here, with the seaports of Seattle and Tacoma recently combining.
San Francisco has long been facing the challenge of homelessness and housing affordability. I remember when I was in college in the late 1990’s walking along sections of Market Street where every alcove and doorway was occupied by somebody in their sleeping bag. This time, I saw only a few people sleeping on the street. Maybe they just moved to the park, but I also heard conference presenters talking about building micro-apartments downtown for formerly homeless people. One could hope that Seattle would adopt a similar solution in addition to, or rather than, supporting the open-air encampments that currently exist in various locations around town.
Micro units also seemed to be the path to greater affordability, with developer Patrick Kennedy of Panoramic Interests presenting on how both profitability and affordability improve when multi-family units are built smaller, with parking eliminated from buildings. Professor Carol Galante of U.C. Berkeley’s Terner Center for Housing Innnovation presented on how trends show more and more people moving into urban centers, with rental units as the fastest growing segment of the housing market. This despite 70% of U.S. housing stock being single-family and zoned as such. Her prediction was for greater density in urban centers, and assisted by government intervention like reducing the mortgage interest deduction, or not taxing accessory dwelling units.
The most impressive project presented at the conference was the Transbay Transit Center. This is a massive effort to build out a multi-modal downtown transit center connecting the cities around the Bay Area via rapid transit, as well as the train to Los Angeles. The transit center features a shopping mall as well as a large park on top of the roof. The Transbay Joint Powers Authority was able to build with money from selling off surrounding land to developers, who are building what will be some of the largest office and multi-family buildings in the city, effectively extending the city’s skyline to the south of the Oakland Bay Bridge. The tallest of these structures, the Salesforce building, would be the tallest in the city.
Another noteworthy presentation included a case study of Twitter’s new headquarters at Market Square, a renovated space that transformed an older building to suit the needs of the new tech economy. And following up on that concept, several presenters invited us to imagine the future of a city that does not depend on workers going to any particular place to get work done, where nobody needs to own cars because cars would drive themselves and be available on demand, and where goods are bought and sold online in a global marketplace that need less retail spaces and more warehouses.
It was a very inspiring conference and a great trip. How these trends and ideas might come to Seattle will of course be a matter of current trends in affordability, as well as overall market forces. But ultimately any local transitions will be a test of whether there is sufficient popular will to move forward toward a denser, more transit-and-tech oriented city.
The Ferry Building
Breakfast with Runstad Center board members
View of Market Street and the palace hotel from NW ULI reception at One Kearny
One of the many benefits of an education at the Runstad Center is the unique opportunity to travel to a national conference and have exclusive access to a number of prominent figures in the industry. Our students who attended the recent ULI fall meeting had a fruitful and exciting visit to San Francisco. Shanon Ford writes in with this report from the City by the Bay:
“Recently, the Runstad Center arranged for members of the Class of 2016 to attend the Urban Land Institute’s Fall Meeting in San Francisco. This conference of over 6,500 people allowed us to experience a major national real estate conference and learn from great speakers including Condoleeza Rice, Jerry Brown, and Brian Chesky, CEO and Co-Founder of Airbnb. While the conference was great to participate in and learn from, the true value of the event was the behind-the-scenes events that the Runstad Center set up for the students. We were able to talk one-on-one with principals of several real estate companies including the huge industrial REIT, Prologis. The event was educational and fulfilling and was just another example of the broad exposure to the real estate industry the Runstad Center provides to its students.”