Bob Berne ’62 (right) has been involved in management, construction and contracting in both the private and public sectors during his career. An active Columbia alumnus, Mr. Berne received a BA from Columbia College and an MBA from Columbia University Graduate School of Business, where he serves on Columbia’s MBA Real Estate Program Advisory Board and is a member of the Columbia Business School Real Estate Forum. In a recent interview with Ashley McDonald ’15, he discusses trends in real estate and gives advice for Columbia Business School students aspiring to have careers in real estate.
You have had an extensive career in real estate spanning more than 45 years. Please tell me about some of the highlights of your career?
Over the course of my career I developed luxury apartment buildings in New York City, several shopping centers, and over 5,000 residential units with Milstein Properties. I also spent time working in the public sector for the U.S. Department of Housing and Urban Development in Washington D.C. and the City of New York housing agencies.
What first attracted you to real estate and how did you get started in the industry?
My family was in the real estate development business and I always knew that I wanted to be a part of the industry. My father encouraged me to begin my career working for a contractor so that I would have the opportunity to see a development project from start to finish. I actually first met Paul Milstein during this time. Milstein was the flooring subcontractor on our project and this experience set the foundation for our future relationship.
Please tell me about your relationship with Paul Milstein and how you began working with Milstein Properties?
I became involved with Milstein Properties in 1977 after working for the U.S. Department of Housing and Urban Development (HUD). While with HUD, I developed an expertise in the Federal Housing Administration (FHA) process and by leveraging this knowledge, I made myself a valuable asset to Milstein Properties. I approached Paul with a business idea for a couple of projects that they were analyzing at the time and by utilizing FHA financing programs, we were able to develop a plan to make these projects more profitable. Thereafter, we worked together for several years and developed over 5,000 residential units in New York City.
Your career spans many real estate cycles. How have you seen the industry change over time?
The industry has changed significantly. In the past, the investment objective was long term and the goal was to ultimately own property free and clear. Now the investment objective has become more short term in nature with investors requiring returns on a quicker timeline. Adapting to these changes is the key to success for a developer. In the current environment, a developer needs to add value to attract investors and have a refinancing mechanism to realize returns for its investors, while maintaining a long term ownership stake in the property. I have been able to make money in real estate by retaining an ownership piece of the properties I have developed.
What aspect of Columbia Business School has been the most beneficial to your career?
At Columbia Business School, I learned to speak the language of finance. This skill has allowed me to build relationships with investors and gave me the framework to build a specialized expertise while working with HUD on FHA financing programs. These skills were extremely valuable for my career.
What advice do you have for current Columbia Business School students beginning careers in real estate?
My advice to students is to begin a career working for an investment firm and develop an understanding of the finance side of the business. Working for an investment firm provides the opportunity to see many projects over a short period of time. While working in development or construction is also valuable, one project can take several years and by the time the project is finished, the world may have changed and the skills learned on one project may not be relevant to the next project. However, working for an investment firm allows you to gain broad exposure to the business quickly. Finally, to be successful it is important to make yourself valuable by finding something that you’re good at and specializing in whatever that may be.
Ashley McDonald ’15 worked as the Director of Real Estate at Pacific Equity Properties prior to entering Columbia Business School. She completed her BA at the University of California in Los Angeles. During the summer of 2014, Ashley will be a development intern at Criswell Radovan in Northern California.