CREF at Five: Supporting Students, Researchers, and the Industry

In 2008, amidst one of the most negative financial environments of the last 100 years, the School of Hotel Administration announced a bold concept, a university-based center devoted to the treatment of real estate as a financial asset. Building on the school’s strengths in hospitality real estate, that bold step took root and has grown and prospered through the ensuing recession and recovery. Five years later, the Center for Real Estate and Finance has taken firm hold and continues to expand its services to students, its support of real-estate- and finance-related research, and its interaction with the real estate industry.

CREF’s primary focus is to enrich the educational experience of Cornell students taking real estate and finance courses by exposing them to real-world experiences and training. The main engine for this is the Minor in Real Estate, which is open to undergraduates in all seven Cornell colleges and schools. By spring semester 2013, over 350 students had declared this minor, making it the largest undergraduate minor at the university. Designed for top-level students, the minor specifies four core courses and a broad set of real estate electives—all framed by the requirement to maintain a superior overall cumulative average.

CREF also promotes connections between students and industry practitioners. These take place in many different forms, starting with more than two dozen classroom visits per year by top industry professionals and extending to on-campus workshops and seminars to allow students to earn industry credentials and the launch of the Cornell International Real Estate Case Competition, which has grown to become the premier event of it’s kind in the world. Organized by Daniel Quan, the Singapore Tourism Board Distinguished Professor in Asian Hospitality Management, this year’s competition drew 15 teams from around the world for one day of analysis and presentations that allowed the student teams to unlock the nuances of a real estate case that is based on an actual transaction. Industry experts participate as judges and consultants, helping the students focus their presentations.

Industry seminars include the semi-annual Hospitality Valuation training, produced through the efforts of Stephen Rushmore, Jr. ’96, co-president and CEO of HVS. This year 85 students attended sessions that gave them firsthand experience with this important industry tool. A total of 137 students attended the ARGUS training session in 2012-13. Hosted by CREF and the Baker Program in Real Estate, ARGUS training presents the commercial real estate industry’s tool for cash flow projections and investment analysis.

None of this is possible without a large and well-rounded faculty focused on real estate and finance. To name just a few areas, faculty expertise includes econometric models, real estate derivatives, and hotel management contracts. In addition to their many publications in leading industry research journals, faculty members have contributed their research to the center’s publications program. One of CREF’s signal achievements is the publication of the Cornell Real Estate Market Indices, which filled a long-established void by tracking the quarterly changes in hotel asset sales and prices. Made possible by data supplied by Real Capital Analytics and CoStar, the indices were created by Crocker Liu, the Robert A. Beck Professor of Hospitality Financial Management; Adam D. Nowak of West Virginia University; and Robert M. White, Jr., founder and president of Real Capital Analytics.

Industry support has been critical to CREF’s growth and success, beginning with the timely gift of seed money from Michael Medzigian ’82, chairman and managing partner of Watermark Capital Partners, and the late Boyd Stofer, who was CEO of Marquette Industries. CREF is now supported by 27 Industry Fellows and friends, who offer their time, expertise, and financial support. CREF’s development has so far been guided by the leadership of Academic Director Jan A. deRoos, HVS Professor of Hotel Finance and Real Estate, in conjunction with the real estate faculty and the advisory board. Just as the changes of the last five years have been driven in large part by the needs of the students and the industry, CREF’s future growth and development will parallel the developments in hospitality industry finance and real estate.