Business Management

Tomorrow’s Real Estate Leaders Come Bearing… MBAs?

62 Articles Written
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Ever since the housing market took a nosedive in 2008, it seems that every strip of entrepreneur and investor has stayed far and away from the property sector. Whether you're a finance veteran looking for stable investments in materials holdings, or a young professional seeking entrepreneurship in tech or marketing, it looked for a while that all of America's best and brightest in business were searching everywhere but real estate.

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However, according to new reporting from Bloomberg Businessweek, it appears that today’s MBA candidates are developing a keen eye for the real estate sector. Citing a sea change among graduate programs at America’s top business schools, the article notes that many finance-minded academic institutions are quickly fleshing out their real estate curriculums. The Bloomberg article took stock of Rutgers Business School in particular, which just established a $3 million endowed chair for real estate in anticipation of creating a full-on real estate concentration next year. In an era where many graduate schools are trimming down their programs, and prospective MBA applicants are questioning the market value of a degree, this is no small gesture.

So why exactly are schools devoting newfound attention (and money) to real estate oriented MBA and MSF programs? As a primary motivator, it seems that many businesses and investing bodies have begun to actively scout for young professionals with real estate expertise. The property market is an oftentimes volatile and temperamental sector, and it increasingly pays to have talent on board who are adept at reading the tealeaves. While trying to invest in the property market can make for uneven sailing, economic signs nevertheless point to the housing sector pacing a steady recovery.

To return to the statistics provided by Bloomberg, the amount of MBA programs nationwide that feature a real estate specialization has increased 30% in the past decade. And, not to misappropriate a term too heavily, but real estate investing and financial analysis represent a growth market. An accumulation of economic factors are rallying to make the real estate sector a lucrative field in which to invest. The Federal suppression of national interest rates has only served to encourage prospective homeowners to take out loans on new property, with the volume of homes sold month-over-month climbing notably.

The upside to the volatility in the real estate market is that it can also provides considerable investment return for savvy financiers. While still tentative in its momentum, the housing market is nevertheless returning to stability, and the American housing market has begun to show such strong signs of growth potential that major foreign finance players are actively scoping our urban property. The nationwide value of newly sold homes is climbing too, and the monthly rate of loan defaults is tracing an inverse trajectory. With less and less mortgages underwater, and American consumer confidence making a return, it seems that those with a discerning eye on the property market could well thicken their bottom line.

Overall, we may be looking at a new generation of finance talent that is actively interested in real estate investment and property management. Even for those among us who haven’t chosen to pursue MBAs, it’s good to hear that aptitude with real estate investment is becoming more and more marketable. If the housing market maintains its current recovery, we could well be on the path to seeing property investing become a focus area for America’s keenest finance minds.
Photo: Patricia Drury

    Glenn Espinosa
    Replied over 7 years ago
    Harrison, This is great timing that you write about this particular topic. I’ve been throwing around the idea of getting a Real Estate focused MBA for sometime now. As an active investor who is already experiencing success growing their business, do you see an MBA providing much value to me? Others have said that an MBA would most likely be a detour for me, especially since I have no plans of being in or returning to corporate by the time I finish my degree. Glenn
    Harrison Stowe
    Replied over 7 years ago
    Hmm, interesting question, and I can see where you’re coming from. If you feel you’ve accumulated the skills (and you likely have if you’ve successfully grown a business), then an MBA may only retread familiar ground. However, if you’re thinking of branching off into an area of expertise you’re not familiar with, then it might be a good investment. Tricky call, but might be redundant if your real estate investing chops are up to par.
    Karen Rittenhouse
    Replied over 7 years ago
    Hilarious. How many of us were able to put into practice the things we learned in college? Practical application is not what our education system has ever been known for. You may learn the “whys” of your field, but the “hows” take boots-on-the-ground experience. That being said, if the program was available, I would certainly encourage a student to focus there rather than say, Art History or a major in English (don’t want to offend anyone). The practical application of a degree in real estate investing has, in my mind, a higher outcome potential than a degree in rocket science! Interesting that education may be heading this way. Another relatively new degree that seems to be springing up everywhere is Entrepreneurship (however the college defines that). I think it’s about time for both. Thanks, Harrison, for the info.