Winter 2011 Newsletter

Volume 5, Issue 3


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Milwaukee CRE Conference Recap

On November 17th, “The Commercial Real Estate Development Conference” presented by the Milwaukee BizTimes, CARW and the Marquette University Center for Real Estate, was held for the 9th straight year. Dr. Mark Eppli, a featured speaker in each of the 9 years, moderated a panel discussing Milwaukee’s Top 10 development priorities.  The purpose of the conference included giving an assessment of Milwaukee’s major real estate needs and finding ways to bring greater municipal focus to those projects.  Milwaukee Mayor Tom Barrett, County Executive Chris Abele, and Department of City Development Commissioner Rocky Marcoux made opening comments and attended the entire program.  Also in attendance were Common Council President Willie Hines and several aldermen.  Results of the “Top 10” were based on a survey conducted by the Commercial Association of Realtors Wisconsin (CARW) broker members. The sold-out event drew more than 420 people to Potawatomi Bingo Casino, and exemplified the sincere interest that Milwaukee has in the development/redevelopment of the City and area. The priorities, in order:

1. Park East (downtown Milwaukee)
2. Shops of Grand Avenue redevelopment (downtown Milwaukee)
3. Kohl's HQ (Menomonee Falls, Milwaukee or other)
4. UWM Innovation Park (Wauwatosa)
5. Bradley Center replacement (downtown Milwaukee)
6. Menomonee Valley development (Milwaukee)
7. Aerotropolis development near airport (Milwaukee and suburbs)
8. Northwestern Mutual office building (Milwaukee or Franklin)
9. UWM School of Freshwater Sciences (Milwaukee)
10. Former Delphi site (Oak Creek)

Following the event, attendees were invited to put their $1,000,000 “Eppli Bucks,” (a million dollar bill with Dr. Eppli’s photo – an unexpected addition to the conference) to work by placing their votes in one of the ten baskets to see if attendees’ opinions were swayed by the conference discussion. The winner, determined by having the most Eppli Bucks invested, was the UWM Innovation Park project that is being developed near the Milwaukee County Medical Complex and GE Medical Headquarters in Wauwatosa. For a more complete recap, including a video presentation of the conference, please visit the BizTimes’ article at their website.

Summaries of past programs

NAIOP/CARW Milwaukee Market Update – Tuesday, December 13, Italian Conference Center. Several Marquette University real estate students and alumni, as well as Center Assistant Director Andy Hunt and Adjunct Professor David Krill, were in attendance at this year’s NAIOP and CARW-sponsored market update. Program alum Mike Wanezek (BusAd ’09) with Inland Companies was the office market expert, focusing on the downtown CBD and north suburban submarkets.  Wanny (as he is fondly referred to) was excellent as he described the overall downtown office market (especially 20.54 percent overall vacancy, only 8 percent class A vacancy in top 7 buildings, positive absorption of 174,000 SF in a market with 16,500,000 SF). In 2012, Wanezek included a prediction for a new building to begin construction downtown, a prediction echoed (but yet to come true) by the two brokers to precede him in the previous two market updates. With major corporations in the Milwaukee area looking at moves and a low class A vacancy, he may be right – stay tuned. Other speakers at this year’s event included CRE founding members James Barry, III of Cassidy Turley Barry and Max Rasansky of CBRE, as well as Andrew Jensen, Jr. with The Boerke Co., Adam Matson with NAI MLG Commercial, and Peter Glaser of CBRE. The event was moderated by former Marquette ACRE program adjunct professor Jerry Franke of WISPARK, LLC.


Wisconsin Realtors Association Management Conference, Thursday December 8th, Country Springs Hotel and Conference Center.  Dr. Mark Eppli and Curt Culver (President and CEO of MGIC) were part of a panel that presented on the state of the residential real estate market in Wisconsin.  While Wisconsin’s 7.7 percent unemployment rate is about one percent lower than the national average, and the Wisconsin residential real estate market had a much more muted cycle than most others in the U.S., the state continues to dig out of the residential real estate collapse.  Dr. Eppli’s presentation indicated that the economic demand fundamentals for job and household creation in the state remain stronger than the rest of the nation, but the shadow market of foreclosed and financially troubled borrowers will keep the markets awash in supply for the coming years.  To see a video about this conference, please follow this link to the WRA website.

Students are Active Across the Continent in October

Real estate students, faculty, and staff took part in four conferences this fall: the USGBC’s Greenbuild Conference in Toronto, Canada, the Harold E. Eisenberg Foundation’s Career Days in Chicago, the NAIOP Commercial Real Estate Development Association’s Development ’11 conference in Scottsdale, Arizona, and the Urban Land Institute’s Fall Conference and Meetings in Los Angeles, CA.  Attendance and partial financial support for students to participate in these conferences has a dual purpose:  first and foremost, to expose the  student talent to industry professionals and industry trends, and second, to reveal Real Estate leadership in the industry.  Both appear to be working as we placed more than 90 percent of our graduates in full time positions and 100 percent of our juniors in internships (see our article in the Fall newsletter) and Dr. Eppli is active with IREM, NAIOP, and ULI.

The CRE sent senior Lydia Bruegge to the USGBC conference in early October. Bruegge has a passion for sustainable real estate and was thrilled for the opportunity to attend the “superbowl” of “green” real estate events.  She was able to bring her sustainable property development and management knowledge back to the classroom and share it with others in the program.   Bruegge commented, “The entire experience was amazing. The speakers, including Tom Friedmann and Amory Lovins, were motivating, interesting, inspiring, and eye-opening to me. The entire experience was extremely educational, and I am so glad I had the opportunity to attend!”

Later in October, twelve Real Estate Club students attended the Harold E. Eisenberg Foundation Career Days in Chicago.  This was the 4th year for this event, which brings students and professionals together for two days of networking, site tours, and learning about different career paths in commercial real estate. Real estate majors from other universities including Indiana, Notre Dame, DePaul, Illinois, and Northwestern also attended.  A majority of student costs were defrayed by the Eisenberg Foundation and the CRE also provided financial support for student club attendees.   Taking advantage of having the MU students in Chicago, Adam McCostlin (BusAd ’06), vice president with UGL Services – Equis Operations, hosted the students for a luncheon and presentation on global tenant representation. The presentation by Adam and several of his colleagues was a great opportunity for students to see how one alumnus made the transition from student life to professional life. Later that evening, Marquette real estate alumni in Chicago joined the students for networking and beverages at Bull & Bear.

CRE Assistant Director, Andy Hunt, a member of NAIOP Wisconsin’s Developing Leaders committee, took two students to the NAIOP Development ’11 conference on October 18-20, in Scottsdale, AZ.   For the second consecutive year, Marquette students represented the only undergraduate real estate program in attendance.  The students were able to experience this intimate event’s big-name speakers and panels, which included keynote presentations by Karl Rove (political strategist) and Jerry Colangelo (former NBA and MLB executive/owner and Phoenix real estate investor). The students also networked with professionals from all over the country, including former NAIOP Chairman Larry Pobuda of the Stewart Lawrence Group in Minneapolis. In addition, Peter Bell, donor to the Robert B. Bell, Sr. Chair in Real Estate at Marquette and a founding member of the Center, graciously took the students and Hunt out for dinner and a tour of Phoenix and Scottsdale’s major developments. Senior Nick Koglin summed up the experience well, This learning experience meant a lot to me. We were there to learn from real-world leaders of real estate, but being so far from the Midwest, we were also presented with an opportunity to represent Marquette University and its fantastic Real Estate program.Many of the Southwestern-based real estate developers were only aware of Marquette because of Dwyane Wade. Subsequently, many of the developers in attendance were intrigued and not only inquired about the program and our academics, but also picked our brains regarding current trends and deal analysis; they were impressed.”

Finally, representatives of the Center traveled to the Urban Land Institute’s Fall Meetings and Conference October 25-28 in Los Angeles, CA. Dr. Mark Eppli, Bell Chair in Real Estate and Director of the Center, and Center Assistant Director Andy Hunt accompanied six students to this conference, which boasted more than 6,000 attendees in downtown LA’s Convention Center. At the conference Dr. Eppli taught a Real Estate Finance Workshop to about 250 attendees, noteworthy in that he was the only academic at the conference to teach a workshop (to see his presentation, follow this link).  For a more in-depth recap of the emerging trends discussed at the conference, please see Dr. Eppli’s article on the conference below. You can also watch video interviews of students discussing their experience by visiting the Center for Real Estate’s YouTube Channel.

To read more about these conferences and the Real Estate Program’s commitment to applied learning, follow this link to an article profiling our travels in the last year. It highlights the dozens of events and more than 100 students that we’ve taken all over the country in the last 12 months.

Curriculum Update

Since the Real Estate major was approved in 2004 much has changed:  Anthony Pennington-Cross was added to the faculty; Argus and CoStar have been integrated into several courses; and numerous applied learning experiences get our students out of the classroom.  We are also in the process of “tweaking” our curriculum to include lease abstracting, property repositioning (as opposed to property development), and foreclosed property analysis.

Over the past eighteen months faculty in the real estate program and leadership in the College of Business Administration (thank you Dean Terrian) have analyzed updates to the real estate major curriculum.  To further enhance the student learning experience and better prepare talent for the industry, we are working through two important initiatives: (1) Offering a new course in Principles in Real Estate, and (2) Increasing the number of required real estate courses to five by requiring both Real Estate Valuation and Real Estate Cases courses.  These curriculum changes are part of ongoing and continual improvements to meet commercial real estate industry needs while maintaining the theoretical and conceptual foundations of the major. Some of the recent curriculum tweaks include a greater emphasis on lease abstracting, attracting alternative sources of capital, and the challenges of acquiring foreclosed and problem assets.

The outcomes of these changes should increase program rigor, enhance the student’s depth of applied commercial real estate knowledge, and produce a standard student quality.  We will keep you updated on the approval of these revisions in coming newsletters.

“ULI Conference Takeaways” by Dr. Mark Eppli

After attending many sessions at the Urban Land Institute’s fall conference (October 25-28, 2011 in Los Angeles, CA) on the real estate capital markets, reading the Emerging Trends in Real Estate 2012 and numerous other year-end publications over the past several weeks, four themes were visited and revisited and worth thinking about:

  • Real estate is the best relative investment.  This came as a surprise to me, however, stock market volatility has kept many away from equities; ten-year U.S. Treasury bond prices have little upside with current yields in the +/-2.0% range; and most commodities are retreating from multi-year highs.  So, in an unexpected way, real estate may have the best risk-adjusted return across the major asset classes.  While this sounds like a bunch of real estate guys rooting for the home-team, give it a thought and you might come to the same conclusion.
  • Real estate demand drivers do not exist.  While this may be confounding to the previous trend, in the face of weak job growth and uncertain consumer spending, property market fundamentals are feeble.  The lack of new jobs has limited office space demand, slowed household formation (to spur apartment demand), and slowed retail spending growth.  The recovery from the Great Recession has been U-shaped and possibly L-shaped, with few if any economists expecting a quickening recovery and suggesting that property markets will be slow to reduce vacancy rates.
  • Apartments, apartments, apartments.  Apartments continue to enjoy a confluence of good demographics, weak owner-occupied housing market, limited new supply, and capital availability.
  • In June 2011, real estate values exceeded value peaks in 2007. . . well, narrowly so.  Investment capital flowed into properties located in wealth islands, primary cities, and core investments pricing them at a premium.  Capital continues to look for a safe-haven and has a limited appetite for risk, especially after the stock market declines of early August 2011.  Competition for the safest assets in the safest locations is aggressive, pushing cap rates below 2007 levels for fortress malls, high-amenity office space that is fully leased, class A apartments, and other prime real estate.  While some investment capital was beginning to push out on the risk spectrum, world economic volatility pushed investors back to 5-10% of the safest real estate investment opportunities in August.  The lack of discussion of the other 90-95% of the real estate asset class was instructive, if not annoying.  While Milwaukee is not considered a primary market and the area has few if any truly core real estate assets, there is an underlying investment trend in low-risk real estate assets.

Other quick sound bites include: “. . . unlevered core total returns (IRRs) in 2012 are expected to average 7.88%;”  “Follow markets with hiring and leasing gains (Milwaukee could be a good bet);” “Urban and walkable not suburban;” and “It has been a ‘tedious vigil waiting for banks and servicers to sell.’”

The Center for Real Estate had a highly visible presence at the Urban Land Institute’s 75th annual meeting in Los Angeles – Marquette’s six students and Center Assistant Director Andy Hunt manned an exhibition hall table, and Dr. Mark Eppli presented a real estate development finance workshop.  The conference is a great way for real estate students to hear industry leaders and visit recently completed cutting edge real estate development, such as LA Live, a three billion dollar mixed use development adjacent to the Staples Center and LA Convention Center.  It was also a great opportunity for conference attendees to interact with some of MU’s best and brightest.

Preview of Upcoming Industry Outreach: Forecast Breakfasts, Alumni Gathering

The fall and early winter are busy times for The Center for Real Estate as professional organizations have their year-in-review and forecast breakfasts.  Drs. Eppli and Pennington-Cross continue to provide the industry with thoughtful analysis on the past year and insights into the year ahead.  Additionally, Mike Wanezak (BudAd ’09) demonstrated his industry leadership as well (see above for a recap of his presentation).

NAIOP Chicago – Wednesday, January 11, 7:30 am: Dr. Mark Eppli is the industry expert for the NAIOP’s forecast breakfast.  The event will review Dr. Eppli’s 2012 forecast for the property and capital markets.  Please come out to show your support for the program and NAIOP.  The event will be held at Riverway Auditorium, 6133 N. River Road, Rosemont, IL.  For additional information visit the NAIOP Chicago’s Events page.

IREM Milwaukee – Thursday, January 12, 7:30 am: For the tenth consecutive year, a member of the real estate faculty at MU will be the featured speaker at IREM’s Forecast Breakfast.  This year Dr. Mark Eppli will keynote IREM’s annual Milwaukee real estate market forecast breakfast held at the Italian Conference Center.  The forecast breakfast is IREM Milwaukee’s flagship event and regularly draws 400-500 attendees. For more information and to register, please visit IREM Milwaukee’s registration page.

Other related events:

Harold E. Eisenberg Foundation Eisenopoly Fundraiser – Friday, January 27, 7:00 pm, Macy’s Downtown Chicago. Several Marquette real estate alumni, including Theron May (BusAd ’07) of Imperial Realty, will be part of this annual fundraiser supporting cancer research and real estate education opportunities for college students. Marquette real estate students and Assistant Director Andy Hunt will also take part in the event. For details and to register for this event, follow this link. Note: this event will likely sell out!

REALM (Real Estate Alumni Marquette) Network Annual Reception – Saturday, February 11, 4:30 pm, Buck Bradley’s, Milwaukee – REALM will once again host a post-game reception following the Marquette men’s basketball game against Cincinnati. Come join fellow alumni at a private reception at Buck Bradley’s, one block from the Bradley Center. More information and details will be sent to all alumni in early January. If you have any questions, please contact Center for Real Estate Assistant Director Andy Hunt at There will also be a pre-game reception sponsored by the Marquette University Business Administration Alumni Association. For more information and to register (which includes a ticket to the game) please follow this link.

Business Leaders Forum Luncheon – Friday, February 17, 11:30 am, Marquette University Alumni Memorial Union – Marquette’s College of Business Administration will hold the 2011-2012 Business Leaders Forum in the Alumni Memorial Union’s ballrooms. Keynoting this lunch is ManpowerGroup Chairman and CEO Jeff Joerres. Center faculty and staff will be in attendance in addition to several real estate students. More information will be available in the upcoming weeks on the Business Administration website at

Real Estate Alumni Share the Importance of Networking with Students on Campus

Networking with current students was the major focus of the REALM (Real Estate Alumni Marquette) Network’s fall meeting, held September 24 in Milwaukee. Alumni gathered at Raynor Library with about 15 students from the Real Estate Club. The event began with a panel of alumni discussing their job and internship experiences and search, followed by a speed networking session focused on giving career search advice. This inaugural networking event between students and alumni in the real estate program was an overwhelming success. Building on this momentum, the alumni are in the process of formalizing a student mentoring program to further connect alums and students. The day ended with an architectural tour/boat cruise on the Milwaukee River for the alumni and included Drs. Mark Eppli and Anthony Pennington-Cross.

SAVE THE DATE: REALM will host its 2nd Annual Alumni Weekend in Milwaukee, February 11-12, 2012. Events will include the following:

  • Marquette Business Administration Alumni Association Pre-Game Reception, Molly Cool’s, 11:00 am to 2:00 pm Saturday
  • Marquette Men’s Basketball game vs. Cincinnati, Bradley Center, 2:00 pm Saturday
  • REALM Post-Game reception, Buck Bradley’s, 2nd Floor Ballroom, 4:30 pm Saturday

Registration information will be emailed in early January. Save the date and look for an email soon to register!

A Note of Thanks to CRE Financial Supporters

Most all of the activities discussed in this newsletter would not have occurred without the generous financial support of the CRE’s founding members. As many of you know, the Center is on a campaign to raise funds to support Center operations for the next five years. Several donors have recently committed to supporting the CRE and its focus on applied student and professional learning experiences. During this holiday season, we would like to extend a warm “Thank You” to all of those who continue to support us financially and in the classroom – you are making a difference in the lives of so many people, and we are very fortunate to have your gifts.

If you are interested in supporting us financially, please contact Director of Development Debra Markoff or Center Assistant Director Andy Hunt. You can also give online directly by following this link: Give Online (Select “Other” and write in “Center for Real Estate”).

Lastly, Merry Christmas and Happy Holidays from the Center for Real Estate!

Prof. John Lohre, Dr. Anthony Pennington-Cross, Dr. Mark Eppli, Prof. David Krill, Assistant Director Andy Hunt