PLAN 85: Article
Real Estate Forum Features Talk On Value Of Design

MIT Places Second in This Year’s CASE Competition

MIT’s Annual Real Estate Forum, jointly sponsored by the alumni association of the MIT Center for Real Estate and the Urban Land Institute of Boston, was held April 5 at MIT. This year’s program featured in-depth content on modular construction, development partnership returns, major changes in real estate law and trends in design

The keynote speaker at the event was alumnus Alexander Knapp (MSRED’08), a former architect with Renzo Piano and currently director with Hines London, exploring the effectiveness of design in creating economic value. Covering a range of material from ‘starchitects’ to neighborhood business improvement districts, from the Eiffel Tower to One World Trade Center, his talk addressed how the intangible ‘soft qualities’ of design influence the hard facts of financial performance.

The forum also included finalist presentations in the 2013 real estate CASE competition, an annual contest created and hosted by alumni from SA+P’s Center for Real Estate. (Sponsored by Boston Properties, Ropes and Gray, LLP, Skanska Commercial Development and The CoStar PPR Group.) Graduate students in real estate and finance from across the country, and as far away as Hong Kong, were invited to make their own proposals for the J. Edgar Hoover Building site on Pennsylvania Avenue in Washington DC.

Thirty-two teams entered the competition at the end of January with only five days to underwrite, design and propose a development. The field was narrowed to twelve in March and to three in April, with teams from MIT, Cornell and Georgetown emerging as finalists. In Boston on April 5, when the finalists made their presentations to a judges’ panel of top real estate executives, the MIT team took second place with Cornell in first and Georgetown third.

According to the Washington Post, the MIT team proposed the most balanced mix with retail, offices, condos, apartments, micro-units and museum space. The team’s proposal was also deemed perhaps the most accessible, with wide pedestrian entrances to the site on all sides and the greatest number of shopping opportunities, as well as a 30,000-square-foot museum on FBI history.

By deploying efficiently designed micro-unit floor plans, the team’s proposal would also provide an array of economical living options not currently available in this prime submarket, making in-town living accessible to a wider socioeconomic demographic, while maintaining market-appropriate per-square-foot rents and pricing.

The Real Estate Forum’s day-long activities also included a presentation by Sunny Wang, Broad Group USA’s General Manager, describing the proprietary methods and technologies that allowed Broad to complete a 30-story tower in only 15 days. This, in anticipation of Broad’s announced ambition to build the world’s tallest building in just seven months,

A panel discussion sponsored by the Beal Companies presented market norms for waterfall return splits, a profit-sharing technique about which little market information exists, using ‘real deal’ examples from active participants; and, from Professor David Geltner, new concepts for evaluating the fairness of waterfall splits and how these incentives motivate each party.

And a panel presentation on current cases in real estate law included recent important changes in recourse loans and what to know before entering into a construction loan; a new ruling that will clarify the difference between an exaction and a regulatory taking in new development projects; and the impacts of recent changes in Delaware law on real estate partnerships. That panel was sponsored by Sal Ewing LLP.