By Dennis Giuliano ’15

MBA students Chris Doman ’15, Dennis Giuliano ’15, Sarah Pous ’15, and Kris Ronning ’15 won first place, the Alexander Bodini Foundation Prize, at the Real Estate Project Class Final Presentations Competition and Awards Dinner at Columbia Business School on December 10, 2014. Their team was one of four to present at the competition, which is the culmination of the second-year course taught by Adjunct Associate Professor Andrew C. Jacobs ’96. Each team was tasked with developing and presenting its own investment strategy for actual properties owned by the real estate firms sponsoring the event. Prior to the contest, four other teams had been eliminated.

All four projects involved opportunities for development or repositioning, from a high-rise hotel in Hollywood, Florida to a tired regional mall in suburban Chicago. Like their professional counterparts, students sorted through complex entitlements, market projections, demographic data, and investor requirements to maximize value at each of the sites.

The winning team worked on behalf of the project sponsor, the Sterling Organization, a real estate private equity fund currently focused on value-add retail investments. Under consideration was the Golf Mill Shopping Center, an 80-acre regional mall located 15 miles from downtown Chicago in Niles, Illinois. Though geographically well-positioned, the shopping center suffers from a suboptimal tenant mix, below-market rents, and a dreary aesthetic.

Doman, Giuliano, Pous, and Ronning proposed a multi-faceted strategy for the site, including an indoor-outdoor redevelopment called “The Village at Golf Mill.” By removing undesirable tenants and replacing covered corridors with landscaped outdoor walkways, the team designed a plan to bring much-needed vibrancy to the property. The strategy also included the addition of critical middle-market fashion retailers, a renovation of the existing AMC theater, and expansion of food and beverage offerings. The team also recommended that Sterling assume the existing CMBS loan on the property in order to capture increased proceeds by refinancing the debt after improvements on the site. The team successfully defended its sponsor’s title, as the 2013 Bodini winners also presented a Sterling project.

Second place was awarded to Rich Eneim ’15, Joe Seidenfeld ’15, and Joanna Wong ’15 for their creative approach to the North Dekalb Mall in suburban Atlanta. On behalf of sponsor Rialto Capital Management, a real estate investment management firm, the team was asked to strategize a discounted payoff for an existing note in order to gain control of the property. The students ultimately recommended a comprehensive redevelopment project, including reconfiguration of retail offerings and construction of both rental and for-sale multifamily buildings.

Hisham Araji ’15, Becky Goldring ’15, Chris Monsif ’15, and Rob Nitkin ’15 took third place on behalf of sponsor Thayer Lodging, a real estate private equity fund. Central to the project was the Westin Diplomat Resort, a 998-room hotel located on the oceanfront in Hollywood, Florida. The team recommended an aggressive strategy for the hotel, including a flag change, $25mm in room renovations, and a complete overhaul of the existing lobby.

In fourth place were Herschel Bender ’15, Justin Osler ’15, and Guy Rejwan ’15. Sponsored by developer MRP, this team focused on a 5.8-acre parcel located on the Anacostia riverfront in Washington, DC. Despite the site’s many difficulties, including the presence of a major bridge crossing above it, the team proposed a vibrant mixed-use development that complemented the nearby Nationals stadium and introduced desirable premium retail space. 

Joe Smith ’99 of 1754 Properties, Randy Giraldo ’04 of TIAA-CREF, and Jane Yang ’10 of Meadow Partners had the difficult task of judging the presentations. Their experienced analysis and pointed questions shed light on the students’ strategies and tested the projects with real-world considerations.

Professor Jacobs praised his students for their creative efforts and thoughtful presentations, marveling that the projects never cease to improve year after year. He thanked competition sponsor Daniele Bodini and the judges, who he commended for their realistic contributions to the academic experience.

This marked the sixteenth edition of the competition, a signature offering of the Paul Milstein Center for Real Estate. Established in 1999 with a generous gift from the Seevak Family Foundation, the competition was conceived to encourage students working in groups to take an idea and develop it into a comprehensive business plan. For the eighth consecutive year, the competition was intertwined with the Real Estate Project Class in which students work on group projects with industry sponsors. The competition and dinner were graciously supported by the Alexander Bodini Foundation and Daniele D. Bodini ’72.
 

2014-2015   Alexander Bodini Foundation Prize Winners – Real Estate Project Class Final Presentations, December 10, 2014; Total of $9,000 Awarded

1st place: Sterling Organization — Chris Doman ’15, Dennis Giuliano ’15, Sarah Pous ’15, Kris Ronning ’15

2nd place: Rialto Capital Management — Rich Eneim ’15, Joe Seidenfeld ’15, Joanna Wong ’15

3rd place: Thayer Lodging — Hisham Araji ’15, Becky Goldring ’15, Chris Monsif ’15, Rob Nitkin ’15

4th place: MRP Realty — Herschel Bender ’15, Justin Osler ’15, Guy Rejwan ’15
 

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(l-r) Judges Randy Giraldo ’04 and Jane Yang ’10 review the students’ slides while Joe Smith ’99 questions the group about its presentation.
 

First Place ($3,600)

Team Members:	Chris Doman ’15, Dennis Giuliano ’15, Sarah Pous ’15, Kris Ronning ’15
Project:	Golf Mill Shopping Center View the Presentation Video
Executive Sponsor:	Sterling Organization (Brian Kosoy, Jordan Fried, and Michael Horne)
Brief Description:	Golf Mill Shopping Center is a regional center, totaling approximately 1.1 million square feet which anchors a critical mass of the 2.4 million square feet of retail in Niles, Illinois – a Chicago suburb located approximately 15 miles northwest of downtown.  The property includes 874,160 square feet of retail space, as well as a 36,203 square foot office tower.  The property’s anchor and junior anchor tenant lineup includes J.C. Penney , Target, Kohl’s, AMC Theaters, Value City Furniture, XSport Fitness, Shop-N-Save, GFS Marketplace, Ross Dress For Less and Sears.  Golf Mill Shopping Center has been owned by the same family for its 50+ years of existence and has been listed for sale for the first time since it was developed.  The current owner and son of the mall’s original developer, lacks capability and interest in the retail real estate industry and has no desire to put additional capital into the property.  The well-documented poor management decisions over the past years have led to substantial net operating income decline. Is this a good investment for Sterling?  How does the deal fit within Sterling’s fund mandate?  What are the risks and how do you best mitigate those risks?  Should the center be redeveloped?  If yes, how?  Should any alternate uses for the land or a portion of the land be considered?  How do you capitalize the deal so that it works for your turnaround plan, including your exit strategy?

(l-r) Kris Ronning ’15, Chris Doman ’15, Sarah Pous ’15, and Dennis Giuliano ’15 alongside competition sponsor Daneiele Bodini ’72 and Adjunct Associate Professor Andrew C. Jacobs ’96.
 

Second Place ($2,700)

Team Members:	Rich Eneim ’15, Joe Seidenfeld ’15, Joanna Wong ’15
Project:	North Dekalb Mall View the Presentation Video
Executive Sponsor:	Rialto Capital Management (Jeremy R. Griffin ’11)
Brief Description:	North Dekalb Mall is a 622,297 sf enclosed regional mall, located in Decatur (Atlanta MSA), GA.  The mall is anchored by Macy’s, Burlington Coat Factory, AMC Theater, Ross Dress for Less and Marshalls.  Originally developed in 1965, the property has a storied past.  During the mid-1990’s, the property lost two anchors.  As a result, North Dekalb Mall lost its competitive positioning within its market.  Locally based, Hendon Properties purchased the mall in October, 2003 for $25 million.  They planned to de-mall the property and add a Costco.  Hendon refinanced the mall with a $28 million 10-year CMBS loan in 2005 which, while taking advantage of favorable financing terms, hand-cuffed the ill-timed and poorly executed redevelopment plan.  Fast forward to 2013.  The mall continues to underperform the market.  Many local and national tenants are not pleased with the current management and Hendon’s high basis in the project makes it difficult to justify investing additional capital.  Due to imminent default and continued operational shortfalls, the loan was transferred to special servicing in April, 2013. Hendon continues to keep the loan current.  Rialto was approached by Hendon to facilitate a discounted payoff (“DPO”) with the special servicer.  Is this a good investment for RREF II?  What is the investment strategy/redevelopment plan?  What price should be paid to complete the DPO?  How should Rialto manage the project on a day-to-day basis?   What is the highest and best use for the site?  What is the optimal capital structure to achieve the new business plan?  What are the major risks inherent in your strategy?  Remember that you must consider all of Rialto’s constituents.

(l-r) Second-place team members Joanna Wong ’15, Joe Seidenfeld ’15, and Rich Eneim ’15 with competition sponsor Daniele Bodini ’72 and Adjunct Associate Professor Andrew C. Jacobs ’96.
 

Third Place ($1,800)

Team Members:	Hisham Araji ’15, Becky Goldring ’15, Chris Monsif ’15, Rob Nitkin ’15
Project:	Westin Diplomat Hotel View the Presentation Video
Executive Sponsor:	Thayer Lodging (George Dabney)
Brief Description:	Opportunity for Thayer Fund VI to acquire a 998-rooms quality beachfront resort (plus over 200,000 square feet of meeting space).  The acquisition would also include a 2-acre parcel of entitled land on the intra-coastal waterway, Landings retail and parking. Is this a good acquisition for Thayer?  If yes, at what price?  What are the opportunities to add value?  What are the risks?  You must consider Thayer’s investors, available capital, their investment mandate, the status of the fund, etc.

(l-r) Competition sponsor Daniele Bodini ’72 with third-place team members Chris Monsif ’15 and Becky Goldring ’15 and Adjunct Associate Professor Andrew C. Jacobs ’96. Team members Hisham Araji ’15 and Rob Nitkin ’15 departed shortly after presenting in order to catch a flight to Patagonia with Columbia Business School’s Global Immersion Program.
 

Fourth Place ($900)

Team Members:	Herschel Bender ’15, Justin Osler ’15, Guy Rejwan ’15
Project:	Capitol Riverfront View the Presentation Video
Executive Sponsor:	MRP Realty (Jason Davis ’10)
Brief Description:	MRP has worked with a land owner over multiple years to successfully entitle a 1.1 million SF, multi-phase, mixed-use (residential, office, hotel and retail) project in the Capitol Riverfront/Nats Ballpark submarket of DC.  Currently, MRP is breaking ground on Phase I of the project, which will consist of 281,050 square feet of residential (~320 units) and 18,650 square feet of ground floor retail space.  The student group will be asked to create a business plan for the development of the remainder of the site, including an appropriate mix of uses, phasing and potential capitalization.  Examination and analysis of current market conditions and the future development pipeline will be important, as will considerations of timing (rezoning may take additional time) and place-making (how does the development capitalize on the bourgeoning entertainment/sports district that is being built around it and how does place-making inform phasing?).

(l-r) Competition sponsor Daniele Bodini ’72 with fourth-place team member Justin Osler ’15 and Adjunct Associate Professor Andrew C. Jacobs ’96. Teammates Herschel Bender ’15 and Guy Rejwan ’15 departed shortly after presenting in order to catch a flight to Patagonia with Columbia Business School’s Global Immersion Program.

Dennis Giuliano ’15 is a student in and Teaching Assistant for the Real Estate Project Class. He spent five years in waterfront engineering before coming to CBS to focus in real estate. He will be joining Ironstate Development in a multifamily development role after completing his MBA in May.
 

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Alexander Bodini Foundation Prize Winners