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By Francis Smyth ‘16 and Anand Bhatia ‘16
On Friday, November 20th, graduate students from the Real Estate programs at Columbia, MIT, and Harvard gathered in Uris Hall for the annual Coming to Terms: Negotiating Real Estate Joint Ventures event. Co-sponsored by the Paul Milstein Center for Real Estate, The MIT Center for Real Estate, and the Columbia Graduate School of Architecture, Planning and Preservation, the event offered student participants the rare opportunity to engage with seasoned professionals from both the legal and business sides of the real estate industry.
Students drew on the knowledge and experience of professional counsel, in preparing for a live joint venture (JV) negotiation, which was presented before a panel of “celebrity” judges from the real estate industry. At least eight students from each team had the opportunity to go “head to head” in the negotiating session against the other team, with their legal counsel offering guidance intermittently.
Professor Lynne Sagalyn, Earle W. Kazis and Benjamin Schore Professor of Real Estate and Director of the Columbia Business School Real Estate Program, kicked off the day with opening remarks on the importance of collaboration in negotiations, particularly with Joint Venture agreements. Professor Sagalyn then turned it over to Jennifer Morgan, Adjunct Professor at Columbia Business School, and Tod McGrath ‘84, Lecturer and Chairman of the Advisory Board at the MIT Center for Real Estate, who discussed the riverfront development project that would be the focus of the joint venture agreement. Each playing the role of either the managing member or investor, their dialogue highlighted some of the key business objectives and issues that would surface during the negotiations later that day.
Following the morning talks, the group broke into four negotiating teams consisting of students from different schools and professional backgrounds, two to represent the developer and two to represent the investing partner. As the teams prepared for the mock live negotiations, they were advised by attorneys from prestigious law firms such Goodwin Proctor, AIG Global Real Estate, DLA Piper, Akerman LLP, and Fried, Frank, Harris, and Shriver & Jacobson.
After the preparation period, the two sets of teams went into separate rooms for their respective negotiations. Beginning with the financial structure of the joint venture, each side had an opportunity to not only propose their ideal structure, but to also explain their reasoning in an effort to persuade the other side.
Once the teams worked their way down the term sheet, the judges (representing firms such as Goldman Sachs, Related, and JP Morgan) offered their feedback on the performance and suggested tactic or items they would’ve included in the discussions.
The day came to a close with a cocktail party and networking reception where students and professionals were able to mingle and discuss the successes of the day. “Coming to Terms was a great opportunity to collaborate with aspiring young real estate professionals from other programs. I am so glad to have had the chance to supplement what I have learned in the Transactions class with this experience and would highly recommend it to my fellow students going through the Real Estate track at the business school in the future.” Camila Grello ‘16.
Francis Smyth '16 is VP of Careers for the Real Estate Association at Columbia Business School. He is a second year student focused on real estate investment and development and spent his summer at LeFrak on the Real Estate Finance & Acquisitions team. Prior to attending CBS, he was an Associate at First Annapolis Consulting | M&A Advisory in Baltimore, MD. Francis is a 2010 graduate of Washington and Lee University, where he was a business administration major.
Anand Bhatia '16 is VP of January Term for the Real Estate Association at Columbia Business School. He is a second year student focused on Real Estate investment and development. Prior to Columbia Business School, Anand spent over four years working at Tishman Speyer in New York City, as a member of their rotational Leadership Development Program. After graduation, Anand will be joining his family’s business focusing on luxury residential development in New York City.