- MBA Real Estate Program
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by Augustus Haney ’17
Jack Kerouac once wrote: “his soul is wrapped up in a fast car, a coast to reach, and a vibrant real estate market at the end of the road.” Alright, that’s not the real quote, but it sums up the sentiments of the fifteen Columbia Business School students who hopped on a plane and headed west for the Real Estate Association’s (REA) fall 2016 trek to Los Angeles, California. Searching for palm trees, sandy beaches, and celebrity mansions, the REA was given a privileged, A-lister’s peek into LA’s diverse and dynamic real estate market, currently in the midst of extraordinary change.
We arrived in La-la-land on Sunday evening, November 6th, and, setting out from our home base at the fabled Los Angeles Athletic Club, we immediately took in the remarkable transformation of Downtown’s real estate scene. From the forest of construction cranes rising above the LA Live entertainment complex, the Staples Center, and the LA Convention Center on Figueroa Street (“the Fig”); to the refurbished Grand Central Market on South Broadway (now a foodie-and-boutique shopper’s paradise); to the redevelopment of derelict industrial buildings along the old Skid Row into pricey condos, it was evident that the revitalization of this long-forgotten enclave at the heart of the LA metro area is in full swing. Over the next two days, the REA’s LA trekkers would delve further into this transition, tour some of the hallmark projects that are defining it, and branch out into the surrounding communities to explore the forces and meet some of the entrepreneurs that are shaping each submarket.
Our itinerary began bright and early on a warm, cloudless Southern California morning. Over breakfast at the Athletic Club, Newport Beach-based Green Street Advisors, Vince Tibone ’15 gave the group a detailed overview of the Los Angeles real estate market, including broad economic and demographic trends, recent financial performance, important geographies, and the most active market sectors. In particular, we discussed the red-hot industrial scene in Long Beach, San Pedro, and further inland, which has seen some of the highest valuations for that sector in the entire country. We were joined by Aradhna Taneja ’16, a recent LA transplant and rising star at CBRE Global Investors, who served as our unofficial guide for the trek.
After breakfast and kicking off the day with Green Street, Aradhna led us to CBRE’s world headquarters, located on the top floor of 400 South Hope Street, in the heart of Downtown. There, Andrew Ratner, Executive VP and head of Office Tenant Representation Advisory Group for Southern California, discussed CBRE’s groundbreaking “Workplace 360” program. This refit strategy emphasizes open-plan layouts, “free-addressing,” green design, employee health, and collaborative spaces, all of which the firm executed for its own stunning headquarters, and has begun to rollout for its clients’ offices throughout Los Angeles and in other major markets around the country. Mr. Ratner also provided a demonstration of Liquid Galaxy, CBRE’s proprietary mapping and visualization platform that utilizes a series of massive LED screens powered by Google Earth, allowing clients to instantly search any property anywhere in the LA region, as well as to overlay property- and market-level data.
Leaving the CBRE presentation—our minds abuzz with technological wonders—the REA group headed to the headquarters of Colony Capital, one of the world’s largest real estate private equity funds. Kevin Traenkle, Chief Investment Officer and Executive Director of Colony Capital, shared with us the firm’s history, its overall business strategy, and the operations of its various platforms, ranging from equity (focused on industrial, homebuilding, credit-tenant leasing, and preferred equity, etc.), to debt (transitional CRE lending, mortgage originations, and refinancing), to investment management (everything from closed-ended credit to core-plus to value-added and opportunistic funds, as well as separate accounts). Next, Robert Stanbrook, Vice President of investments, walked us through a few case studies of Colony’s recent value-added and opportunistic equity plays in and around Los Angeles. After a delicious working lunch generously provided by Colony, the group returned to South Hope Street to meet with Mark Zikakis ’91, a Principal of CBRE Global Investors, who led an illuminating discussion on the impact of new technology in the field of real estate asset management. Several REA members, who posed thought-provoking questions to Mr. Zikakis, were rewarded with selections from his impressive business library.
For the last stop of the day, our group toured FIGat7th with Thomas Diamond, Senior Vice President of asset management at Brookfield, the project’s developer. This open-air retail and fast-casual dining complex, surrounded by several major commercial development sites—including the Wilshire Grand Center (also known as the Korean Air Tower), which surpassed Henry Cobb’s US Bank Tower as the tallest building in California—has become a hub of daytime activity for Downtown LA’s Financial District. Later that evening, we attended an alumni reception at the rooftop bar of the SIXTY Beverly Hills on Wilshire Boulevard, co-hosted by the Columbia Business School Los Angeles Alumni Club and the Paul Milstein Center for Real Estate. Reconnecting with recent graduates and meeting new colleagues, we were treated to a savory buffet and breathtaking starlit views of Beverly Hills, followed by dancing in the celebrated nightspots of nearby West Hollywood, plus the obligatory late-night stop at In-N-Out Burger.
The next day, the REA trekkers ventured out from Downtown, first to Hollywood. We began with a tour of Eastown, a multi-family apartment development by The Clarett Group located on Sunset Boulevard. Our guide for the morning was Jeff Remillard ’06, a Clarett managing director, whose colleague, Mike Namba, gave us a behind-the-scenes tour of the residential project and explained some of the challenges of working with Hollywood zoning, entitlements, historic preservation guidelines, and community groups, while providing quality affordable housing. Afterward, Jeff took us down the Hollywood “Walk of Fame” to the headquarters of Kilroy Realty Corp., one of the West Coast’s largest office REITs. Jeff Weiss, Kilroy’s VP of acquisitions, offered his insights into the recent changes in LA’s real estate industry and discussed the prospects both for Downtown and for the Hollywood submarket. He then brought us to a nearby Kilroy development, Columbia Square. This mixed-use complex includes the refurbishment of a landmarked, William Lescaze–designed movie studio and a new office tower.
Continuing our journey westward, the group then traveled to West Hollywood, where CBS alumni Lauren McDermott ’15, Lawrence Ou ’09, and Mo Saraiya ’10 of CIM Group, and their colleague Bradley Aaronson, met us for a tour of the massive, multi-phase Sunset La Cienega project, one of the largest active developments in the LA region. The complex of four buildings includes a hotel under The James flag, retail space, a restaurant, plus two residential condo towers. Mr. Aaronson, a senior VP of development at CIM, provided us with a detailed overview of the design, construction program, and the challenges of such a mammoth, decade-long undertaking in a political climate such as that of West Hollywood.
After taking in the panoramic views of the Los Angeles Basin from the pool deck of Sunset La Cienega, we jumped on the Santa Monica Freeway (the infamous “10”) for the last stretch of our race to the Pacific, arriving at the imposing steel-and-glass headquarters of real estate investment bank Eastdil Secured at the intersection of Wilshire Boulevard and Ocean Avenue—described as the most valuable office tower on the West Coast—in the late afternoon. There, a team of Eastdil bankers including Michael Callahan, Stephen Somer, JP LeVeque, Joseph Smolen, and Geoff Boler, described Eastdil’s operations and culture and provided a valuable summation of the LA real estate market, taking in much of what our group had learned over the previous two days. We discussed the prospects for in-fill development in such established communities as Hollywood, Beverly Hills, and Santa Monica; and the brownfield redevelopment that was transforming Down-town. We also discussed transit and the impact of the expansion of LA’s underdeveloped Metro Rail system, which has the potential to integrate the region as never before—and to finally put to rest Alexander Woollcott’s famous quip that Los Angeles is “seven suburbs in search of a city.” From these enlightening conversations and informative site visits, it became clear that future REA West Coast treks will likely find a very different Los Angeles than that which exists today.
Our little group of REA pioneers ended the day, and the trek, with cocktails on the porch of the Bungalow lounge in Santa Monica, watching one of LA’s famed Technicolor sunsets spread out over the horizon. Our visit was brief—we blew through town like a Santa Ana whirlwind—but filled with insight, lively debate, great company, and all the magic of the City of Angels. We would like to thank the Paul Milstein Center for Real Estate, especially Administrative Director Kristin Svenningsen; the CBS Career Management Center; CBS Alumni Relations; all of our corporate hosts and alumni guides; the CBS Los Angeles Alumni Club for organizing a great cocktail hour on November 7th; Leanne Lachmann, for accompanying us on the trek; and finally our very own Brian Hinds ’17 and Seema Hirsch ’17, for putting the whole show together. As they say in Los Angeles, that’s a wrap!
Augustus Haney '17 worked as a sponsor's agent and a project manager in New York's luxury residential sector prior to business school. He was engaged in every stage of the development process, helping to guide complex, multi-million dollar projects from groundbreaking to closings. In addition to the M.B.A., Augustus is pursuing a dual degree in Urban Planning at the Columbia Graduate School of Architecture, Planning and Preservation (GSAPP), with the goal of transitioning to the principal side of the industry. Augustus is interested in real estate private equity, particularly the value-added and opportunistic sectors, and is focused on acquisitions or asset management positions.