Pipeline Newsletter - February 8, 2008

Vol. 3 No. 2

February 8, 2008

Latest News


Letter from the Executive Director

Our 12th Annual Real Estate Conference had many highlights, but the most personally satisfying for me was the privilege of announcing the successful completion of a fund-raising campaign to endow and name a new faculty position in honor of Dan Mulvihill. As I explained this exciting new building block in the growth of the Burnham-Moores Center for Real Estate, our audience of more than 500 rose in unison with an outpouring of applause and affection for this gentle giant of a man.

Endowments are critical elements creating a permanent source of funding for academic programs like ours, which rely heavily upon "external" dollars even more so than university support. They generate earnings to support outstanding faculty in a host of ways, from paying for administrative support to the acquisition of data for applied research, or research-related travel, or supplemental compensation to help assure that we can retain or attract faculty in a highly competitive market as real estate increasingly takes root in the curricula of top-ranked universities.

Friends and family of Dan Mulvihill, over a relatively brief period, pledged and gave approximately $650,000, well in excess of the campaign's $500,000 minimum goal. As future gifts and accumulated earnings add to that principal, we hope that over time this endowed faculty position will become an endowed chair, which requires a minimum of $1.5 million.




Mark J. Riedy and Dan Mulvihill

That it is Dan Mulvihill, a great personal friend and long-time supporter of the Center, to be honored with this endowed faculty position is absolutely appropriate and heartwarming. In 1993, Dan was instrumental in bringing me to campus by putting his credibility on the line on my behalf with the School of Business dean, Jim Burns, and then-USD president Art Hughes. Dan recommended me for the faculty, and his word was good enough for Drs. Burns and Hughes. Dan then chaired the fund-raising committee for the Hahn Chair, which I hold, and he and his wife, Mary, gave the first major gift to launch that campaign, which was completed in eight short months, nearly record time.

Dan Mulvihill was one of the founding members of the Center's Policy Advisory Board (PAB) Executive Committee in 1995, and continues as an active member to this day. In 2002, the PAB created an annual award to recognize its members who have provided sustained leadership and support for USD's real estate program. This annual award became the Daniel F. Mulvihill Leadership Award, and I will let you guess who was its first recipient.

Dan has been a mortgage banking industry leader at the national, state and local levels. He and Mary share a lifetime of giving back with extraordinary generosity to individuals and organizations whose defining characteristic is caring for others. In the field of real estate, where strong egos abound, Dan Mulvihill is one of the most humble and honorable individuals I have met in my career.

The Mulvihill endowment now stands proudly alongside the Center's other endowments: the Ernest W. Hahn Chair, which stands at approximately $3 million; the John Moores/Burnham Foundation/Burnham Real Estate gift of $5 million that endowed the Center; and four endowed scholarships: the Marasco Family Scholarship Fund, Fieldstone Foundation, Mickey Carhart and Dan Woodruff Memorial Scholarships, which total more than $250,000. Now approaching $9 million, the endowments are essential to providing long-term sustainable funding for the center.

Dr. Mark J. Riedy
Executive Director


12th Annual Real Estate Conference Draws a Crowd	^back to top

More than 500 of the region's real estate professionals turned out for the Burnham-Moores Center's 12th Annual Real Estate Conference, held Jan. 22 at the San Diego Marriott Hotel & Marina.

Mark Riedy, the center's executive director, kicked off the conference by announcing the completion of a fund-raising campaign to endow a new faculty position in honor of Daniel F. Mulvihill, chairman of Pacific Southwest Realty Services and a founding member of the center's Policy Advisory Board.

Mulvihill received a standing ovation from the sold-out room. "I feel a little bit like a tiny intruder in the forest of giants," he told the attendees following the announcement. "You're talking about the Burnham-Moores Center. Those are great guys and great names."




	Mary Ludgin, of Heitman in Chicago, finds a reason to smile during her property markets presentation.

Following the Mulvihill presentation, keynote speaker John Robbins offered the attendees his view of the downturn in the industry, as immediate past chairman of the Mortgage Bankers Association of America. Robbins, who is chair of the center's Policy Advisory Board Executive Committee, said that: "We are experiencing the effects of someone who has consumed too much wine. The good news is we've stopped drinking; the bad news is we're going to have a hell of a headache." Robbins said that he expected to see signs of a "normalized" market in 2009 and a "healthier" one in 2010.

Steve Osgood of Dupont Fabros, which was the only publicly traded REIT initial public offering in 2007, highlighted the role fate plays in global capital markets. "We have often joked that had we gone public a week before or a week after we wouldn't have gotten out," Osgood said of the company's Oct. 19, 2007 IPO. "Our lead investment bank Lehman Brothers actually shortened that time period and said that if we had priced an hour and a half after we did, we probably wouldn't have gotten out."

During the "What Are the Capital Markets Telling Us?" panel, Janice Sears advised the room to follow the "Keep it simple stupid" mantra that she and her colleagues at Bank of America have adopted during the current market cycle. "Go back to basics and do the right thing," she said. "Don't be too fancy and try all of the financial engineering — just get it done."

Burl East of Silver Portal Capital took the advice a step further. Data are "always backward-looking," he said. "People who get wealthy in our business don't wait for data. They hold a wet finger to the wind and make a snap, thin-sliced judgment on where we are in the cycle and go with it."

Jay Spivey, senior director of Product Management at Costar Group, and Norm Miller, director of academic programs at the Burnham-Moores Center, revealed some positive news in their "Does Green Pay Off?" presentation. The researchers reported that sustainable development can yield financial benefits in addition to environmental ones.

In the final panel, "Property Markets and Property Types — Heading North or South?," Bob White, president of Real Capital Analytics in New York, shared some encouraging news of his own with the group. White said that his company's report of major commercial property sales transactions around the world ranked San Diego as the 17th most active market. When grouped with all of Southern California, the ranking jumped to No. 2, just behind New York and ahead of London.

"Globalization of the capital markets is happening very quickly," White said. "It is something you have to realize. You're not just comparing yourself to LA and San Francisco or Atlanta and Chicago. You're comparing yourself to Moscow and Shanghai and Hong Kong and all of the other places capital can go these days."

To view all of the presentations from the conference, including results from a live survey of attendees on future market conditions, go here.


Svetlana Istrati Receives Daniel B. Woodruff Memorial Scholarship	^back to top

By Meghan Bokath, Communications Coordinator




	Svetlana Istrati

USD undergraduate student Svetlana Istrati has been named the Fall 2007 recipient of the Daniel B. Woodruff Memorial Scholarship. In permanent tribute to USD graduate Daniel Woodruff, the Burnham-Moores Center for Real Estate established the award in 2000 to honor the most outstanding student pursuing real estate as a career profession. Woodruff died of cancer at the age of 27, less than two years after graduating from USD. Each semester the scholarship is awarded to a student who best epitomizes Woodruff's positive qualities of "academic excellence, warmth, determination, intellectual curiosity, and unabashed love for humankind." Istrati is the 14th student to receive the scholarship, which carries with it a $2,000 award.

Istrati, who hails from the country of Moldova, is set to graduate in May 2008 with a bachelor's degree in Business Administration. Istrati first came to the United States two years ago through an academic exchange program at the European School of Economics in Milan, where she was a student. After two semesters at San Diego State University, Istrati transferred to the University of San Diego. Due to the difficulty in obtaining travel visas from Moldova, Istrati had never been to the United States before starting school here in the fall of 2005.

Istrati, who speaks six languages, will graduate with enough credits to have emphases in international business, marketing and finance and maintains a 3.94 GPA. She says that receiving the scholarship came at a good time for her and provided a needed confidence boost as she tries to discern her career path. "I think I'm in a quarter-life crisis now — I don't know what to do with my life," she says. "There are so many options, and I want to do the right thing."

Upon graduation, Istrati plans on moving either to San Francisco or New York to pursue a career in real estate or finance. Coming from a country where career paths are limited, Istrati finds the task of choosing a career direction a bit daunting, "America has so many things to offer, and that makes it more difficult," she says. "When you have more choices, it's more difficult to make a choice. Had I stayed home, and not even moved away, I would probably be happy, be married and have a family. There's not much to think about. You accept it and try to make the best out of it. Here, when you have so many options, it becomes more difficult to actually make a decision."

In addition to her schoolwork, Istrati is on a salsa dancing team, Majesty in Motion, and took part in USD's Thanksgiving House project last semester. Istrati's current goals include finding a job and learning to play the piano.


Professors Teach Intersession Classes in Hong Kong	^back to top

By Meghan Bokath, Communications Coordinator

USD's Charles Tu and Alan Gin, along with 40 undergraduate business students, recently returned from a study abroad trip to Hong Kong. The trip, which included excursions to Shenzhen, Guangzhou, Zhuhai and Macau, marked the first time that Tu had taught overseas and the 12th time that Gin had. Through classroom work and cultural excursions, students were able to learn up-close the intricacies of doing business in China.




Charles Tu and Alan Gin (foreground) dine with students in Hong Kong.

Students took one of two course offerings on the trip, "Commercial Real Estate Finance and Investment," taught by Tu, or "Doing Business in China," taught by Gin. Classes were held on the campus of Hong Kong Baptist University in Kowloon.

To supplement the classroom material, Tu's class toured the Hong Kong office of CB Richard Ellis to visit with local real estate professionals and get first-hand information about local real estate markets. Additionally, both classes visited the production facilities of Cooper Lighting and Flextronics.

In addition to the academic and business aspects of the course, the students also were able to experience the cultural aspects of Hong Kong. The group visited popular tourist destinations in Hong Kong, including Victoria Peak, the Stanley Market, Happy Valley Racecourse, the Giant Buddha on Lantau Island and Lan Kwai Fong, among others.


The Hypocrisy of a Rebate Stimulus Package	^back to top

One Professor's Perspective, from Norm Miller, Director of Academic Programs




Norm Miller

How can we as a society discourage people from continued use of credit cards while we send out checks for up to $1,200 per household and suggest it would be nice if the money was spent, not saved or used to repay debt. This is precisely what the Washington, D.C., politicians are doing right now. Because the national budget is not in surplus mode, the money — some $150 billion or more — will be borrowed. This means, we as taxpayers will need to pay it off some day. So would you take $1,200 now if you knew it meant $1,800 in extra taxes 10 years from now? It is the equivalent of that type of impact and is no different from encouraging us to rack up more credit card debt except that this is at lower rates. Still, it is coerced borrowing on the part of the federal government intended to give a quick short-term stimulus to the economy so that the recession is postponed to the next political term.

While the increase in mortgage loan limits is a terrific and a useful long-term economic move, and we should applaud it, we should also write our Congressmen and tell them we finally understand that there is no free lunch or free money, so keep the rebates and do not add any more to our large and looming future debt.


MSRE Students Take Part in Construction Management Roundtable	^back to top

Ian Gill

Ian Gill, principal at Highland Partnership, taught during the four-day Construction Management class for the MSRE students from Jan. 23-Feb. 1. Gill offered a developer's perspective to the students and provided insight into issues of design, space utilization, management of the construction process and construction financing. Rich Benson and Randy Bohl, principals at Benson and Bohl Architects, and John Wickenhiser of Wells Fargo Bank served as guest speakers for the class, which has been a part of the MSRE curriculum for the past three years.


Chula Vista Research Project Workshop	^back to top




Tom Scott, executive director of the San Diego Housing Federation, facilitates a group discussion at the Chula Vista Research Project Workshop, held Jan. 29 at the University of San Diego. The Burnham-Moores Center for Real Estate hosted the event along with the U.S. Department of Energy, the California Energy Commission, the National Energy Center for Sustainable Communities and the San Diego State University Research Foundation. Real estate and civic leaders attended the workshop to discuss barriers and solutions to energy-efficient community development on the local, state and national level. The workshop is one of a series of research efforts being undertaken by the center to support the project's overall goals.


Career Expo Day Scheduled for April 10	^back to top

More than 20 private and public organizations are expected to take part in USD's Sixth Annual Real Estate Career Expo, slated for April 10 from 11 a.m. to 2 p.m. in USD's Hahn University Center. Employers will be given booth space free of charge, as well as lunch and a book of student resumés. The expo is open to all undergraduate and graduate students interested in pursuing careers in real estate, including MSRE candidates.

Interested employers should contact Lauren Lukens at llukens@sandiego.edu to reserve space at the event.


Sherm Harmer Jr. Named 2008 BIA-SD President	^back to top

By Meghan Bokath, Communications Coordinator




Sherm Harmer Jr.

Policy Advisory Board Executive Committee member Sherm Harmer has been named the 2008 president of the Building Industry Association of San Diego. In a break from tradition, the BIA specially recruited Harmer for the position, a move that the board of directors later supported through a vote.

Harmer, who also serves as an instructor in the development course at the core of the center's MSRE program, said that he will address issues of water supply and excessive storm water runoff during his tenure as president, which will conclude on Dec. 31, 2008. Harmer also plans to focus on sustainable development issues and endorse incentives to promote green building in San Diego.

Harmer was president of the California Building Industry Association in 2004 and currently serves as chairman of the Downtown Residential Marketing Alliance, which he helped found four years ago. Throughout his career, Harmer has specialized in urban infill, transit oriented and affordable housing projects.


In the News	^back to top

Lou Galuppo was interviewed on KUSI TV's Jan. 15 6 p.m. news broadcast. Galuppo spoke about the decline in the median housing prices in the San Diego region.

Mark Riedy was interviewed by Jim Christie of Reuters Jan. 17 regarding the challenges with jumbo mortgages. The article appeared in the Jan. 18 edition of the United Kingdom's Guardian, among other outlets.

Norm Miller was interviewed by Fox News for a story on the area's highest foreclosure rate since 1988. The segment ran on the network's Jan. 23 broadcast.

Miller was interviewed by Ed Joyce of KPBS regarding the move by Congress to make it easier for borrowers to obtain low-interest loans on pricey homes. The piece aired on the Jan. 25 edition of All Things Considered as well as the Jan. 26 edition of Weekend Edition.

Miller was interviewed by Zach Fox of the North County Times for a story on the steep decline in San Diego County housing prices. The article appeared in the paper's Jan. 30 edition. Miller also was quoted in a Feb. 4 article in the same paper on the price of homes in Carlsbad.

Alan Gin was quoted in a Feb. 1 article in the San Diego Union-Tribune on the state of the city's economy.

Calendar


SAVE THE DATES . . .	^back to top

Real Estate Alumni Association and School of Business Alumni Association Networking Event
· Wednesday, Feb. 20, 2008, 6 p.m. - 9 p.m. at Confidential Loft & Bar
· Register Online

Real Estate Development
· Classes start Wednesday, March 5, 2008
· To register, contact Jodi Waterhouse, or register online
For more information about the Certificate in Real Estate Finance, Investments and Development, go here.

Application Deadline for Fall 2008 MSRE Program March 14, 2008
· More Information

Career Expo Day
· April 10 from 11 a.m. to 2 p.m. in USD's Hahn University Center
Contact Lauren Lukens at llukens@sandiego.edu to register your organization.

Visit us online at www.USDRealEstate.com

The Burnham-Moores Center for Real Estate is committed to delivering outstanding education, industry outreach, career placement, and research services to advance socially responsible leadership in real estate.

University of San Diego, 5998 Alcal� Park, San Diego, CA 92110-2492