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By Grey Baker ’16 and Aniju Varughese ’15
From November 3-4, 2014, 20 students of the Columbia Business School Real Estate Association traveled to San Francisco to explore the market landscape and learn how San Francisco-based companies are taking advantage of local, national, and international opportunities. The group had informational meetings and site visits with real estate developers and investment and private equity companies. Fittingly, the group stayed at a San Francisco real estate landmark, the Palace Hotel, rebuilt from the ashes after the earthquake and ensuing fires of 1906. The Palace Hotel accommodations were secured for the CBS group through the help of John Lapins ’98, Vice President, Architecture & Construction with Starwood Hotels and Resorts.
The group first met with Gene Slater, Chairman and Co-Founder of CSG Advisors, to tour the iconic Ferry Building on the San Francisco waterfront. Until the 1930’s, the building had been one of the busiest transit terminals in the world but fell into disuse and isolation later in the century. Slater played a critical role in the negotiations and financial structuring of the $100 million mixed-use restoration project that allowed the building to reopen in 2003. Slater explained why a public private partnership was formed, what financing criteria would ensure long-term financial sustainability, and how to keep the re-use from being ordinary.
Eastdil Secured leadership next gave us a detailed overview of the San Francisco market, which Jeff Weber, Senior Managing Director, believes is fundamentally stronger than before the tech bubble of 2000. Kara Wiard ’10, Director, detailed the high demand for new residential and an ever-increasing densification through high-rise residential towers in the downtown area. Stephen Van Dusen, Senior Managing Director, explained that the expansion of tech companies to downtown have led to increases in office rents since 2010. A discussion ensued on the relationship between office rents and values.
The group then walked to Shorenstein’s offices in the company’s own neo-gothic Russ Building, the tallest building in San Francisco from 1927-1964 and once again a sought after address. Glenn Shannon, President, explained how a smaller number of funds are capturing more capital and how, as one of those funds, Shorenstein has invested in more American cities than its peers. Shorenstein staff then took us on a tour of Market Square, the headquarters of Twitter, Yammer, and other tech companies in the Civic Center area, where we explored Twitter’s office space and unique roof deck.
Our final meeting of the day was with Spear Street Capital in the heart of the Financial District; Vice President Craig Hine explained how Spear Street is able to capitalize on volatility in the markets by focusing on certain types of tech tenants. Hine and Associate Lyndsay Erickson walked us through two case studies – Stadium Tech Center in Santa Clara, California and 7700 Parmer in Austin, Texas – which both showcased how important it is in the current environment to help tenants recruit talent with the help of amenities.
The eventful day ended with a reception at Hotel Vitale hosted by the Paul Milstein Center for Real Estate, CBS Alumni Relations, and the Bay Area CBS alumni club, led by Shar Ceasar ’13 and Braxton Bragg ’13 for students, alumni and company presenters.
The second day started at the offices of Boston Properties, where Senior Vice President Bob Pester and Property Manager Mirjam Link, a 2010 graduate of the MSRED program at the Columbia University Graduate School of Architecture, Planning, and Preservation, gave an overview of recent Boston Property acquisitions and developments including the Salesforce Tower at 415 Mission Street. The Salesforce Tower will be the tallest building in San Francisco and is located adjacent to the Transbay Transit Center in San Francisco’s South Financial District. Pester and Link next lead us on tour at 535 Mission, where we were able to see the fit-out progress for the tenant, Trulia, a real estate information firm.
We then headed to West Oakland to visit the CIM Group where we met with CBS Alumni and Vice President Mo Saraiya ’10 and Vice President Andrew Altman. Saraiya explained CIM’s investment strategy which targets long-term investments in urban real estate and infrastructure based on fundamentals of community development. Mo and Andrew scheduled a tour of the offices of another tech star tenant, Pandora, in Oakland, highlighting the variation in floor space usage at tech companies.
Next we visited Tishman Speyer where Senior Managing Director, Carl Shannon, described weathering the storm of the financial crisis after which, we continued on to a tour of the construction site at 555 Mission. The next and last stop of tour was at the sales office of the Lumina Residential building, where we rounded out the trip learning about various ways to attract buyers to high-end condominiums.
Thanks to student organizers, Dan Wagman ’15, Jon Hajar ’15, and Alex Jugant ’15 of the Real Estate Association, for arranging a robust itinerary with an impressive variety of company visits and site tours. A special thanks to the San Francisco alumni hosts, Shar Caesar ’13 and Braxton Bragg ’13, and also to the trip facilitators from the Paul Milstein Center for Real Estate (PMC) and the Career Management Center. Students were accompanied on the trek by Lynne Sagalyn, the Earle W. Kazis and Benjamin Schore Professor of Real Estate and Director of the PMC and MBA Real Estate Program, and Kate Kerrigan, Administrative Director of the PMC.
2014 San Francisco Trek Photo Slideshow
(Trek Photographer: Nikhil Chaudhri ’16)
Grey Baker ’16 is a first-year MBA student with a background in politics, government, and consulting who is transitioning to real estate development.
Aniju Varughese ’15 is a second-year MBA student with a background in engineering, development projects and an interest in real estate acquisitions and asset management.