Team of 2019 CBS Grads Analyzing a Land Acquisition Opportunity Win the 2019 Alexander Bodini Foundation Prize Real Estate Private Equity Class Competition
By Kevin Cullen '19
On Tuesday, May 7, four teams of second-year MBA students took part in the Alexander Bodini Foundation Competition in Uris Hall. The competition served as the culmination of the Real Estate Private Equity course taught by Andrew C. Jacobs ’96 – a course which brings four real estate firms into the classroom as sponsors for eight competing student teams. Each of the eight teams work on a real project throughout the semester in preparation for the Bodini Competition in May.
This years’ project sponsors included Avanti Properties, Urban American, Gramercy Irving, and an additional sponsor that prefers to remain anonymous. Throughout the semester, each sponsor worked independently with two teams of students to develop a full business plan and investment committee proposal. While all teams completed an investment committee quality project, only one team from each sponsor was fortunate enough to compete in the final round. Prior to the Alexander Bodini Foundation Competition, a first round of competition was held on April 24 and May 1, after which Professor Jacobs and the respective sponsors selected four teams to take part in the final round.
On the evening of May 7, the four remaining teams each presented for roughly thirty minutes. After each team presented, a panel of three judges asked insightful questions to test the teams understanding and the validity of their assumptions. The panel of judges was composed of CBS alumni who are successful practitioners in various sectors of the real estate industry including Edward Gormbley ’09 Managing Partner at Workforce Partners, Matthew Baron ’07 President of Simon Baron, and Steven Rubenstein ’06 of Estreich and Company.
MBA Students Kevin Cullen ’19, Kenny Thompson ’19, Craig Massie ’19, and J.C. Hay ’19 won first place for their analysis of a land acquisition opportunity presented on behalf of Avanti Properties. The team was tasked with valuing and creating a business plan for a 27.5-acre plot of land in suburban Chicago which Avanti Properties was interested in acquiring. The team performed thorough diligence on the property and proposed an acquisition price that represented conservative underwriting principles appropriate to unique physical characteristics and market conditions identified. The team utilized a residual land value analysis to price the land – taking into consideration multiple possible outcomes and assessing risk factors that might affect the land’s value. After asking questions about certain aspects of the analysis, the judges commended the group for the thoroughness of their analysis.
Second place was awarded to the team sponsored by Gramercy Irving and led by Arthur Brousseau ’19, Christian Coates ’19, Samantha Martin ’19, and Cyrus Mojdehi ’19. This group prepared a business plan and acquisition price for the purchase of unsold units in an uptown Manhattan located building that has already been converted from a rental to a condominium. The team analyzed the implications of rent-regulation and demonstrated a deep understanding of both the market dynamics and the velocity with which current tenants would vacate the property. The judges questioned the group’s analysis around the tax implications of condominium vs. rental properties and ultimately agreed that the group’s pricing and exit assumptions were realistic and well-founded.
The Urban American team led by Oliver Grace ’19, Alex Jansen ’19, Luba Kim-Reynolds ’19, Luiza Loureiro ’19, and Ted Wu ’19 received third place for their business plan to redevelop an office building in West New York, NJ. The team proposed a conversion of the building to rental apartments, including underground parking. The team performed a detailed feasibility analysis, taking into consideration zoning, affordable housing requirements, comparable products available locally, and physical site constraints. Ultimately, while the judges appreciated the creativity in the proposed project and found it viable, they contended that the analysis under burdened the project with land costs and had underestimated the risk of obtaining zoning approvals.
Fourth place was given to the group presenting on behalf of the anonymous sponsor. Oscar Hentschel ’19, Will Miller ’19, Juan Castano ’19, and Kelly O'Brien ’19 presented a business plan for an entrepreneurial real estate venture in which an experienced general partner is structuring an investment vehicle with an ultra-high net worth investor seeking additional exposure to real estate. The group analyzed several possible investment management platforms before ultimately recommending the general partner proceed with a Single-Family Office structure. The judges questioned the degree of liquidity and flexibility allowed by the proposed structure and contested that the returns to the general partner were unrealistically high.
After the final 4 teams presented, Ambassador Daniele D. Bodini ‘72, Professor Jacobs, the judges and students enjoyed dinner and an awards ceremony where they continued their discussions.
The Columbia Business School faculty, staff, and students extend our sincerest gratitude to Ambassador Daniele D. Bodini ’72 for graciously supporting the Alexander Bodini Foundation Prize Competition. Through the support of Ambassador Bodini and the Foundation, this year’s competition marked the twentieth edition, a signature offering of the Paul Milstein Center for Real Estate and the MBA Real Estate Program.
Kevin Cullen ’19 is a 2nd MBA candidate at Columbia Business School focused on Real Estate. He has served as a Peer Advisor, Chief of Staff for Cluster Y’19, and is an active member of the Real Estate Association. Prior to attending CBS, Mr. Cullen was Vice President of Development on at The Conti Group where he gained domestic and international experience in project development.