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The Big Data Craze Is Building In Real Estate — And MBA Programs Are Driving The Trend

Companies want graduates with sophisticated modelling capabilities

Mon Mar 21 2016

Gilles Duranton, chair of the real estate department at Pennsylvania University’s Wharton School, sees a feast of MBA career opportunities in the sector. But what really gets him animated is advanced analytics.

“The data component — sophisticated modelling — is becoming more important,” he says, with feeling. “Companies are asking for this more and more.”

Property-focused Wharton MBAs work at “specialized companies that provide data and analytics,” Gilles says, as well as at large, institutional investors. “Because the industry is becoming more sophisticated with data, this is an area that will grow.”

MBA jobs in real estate are booming, from developers to private equity firms such as Blackrock and KKR and investment funds at Goldman Sachs and Morgan Stanley. What all these employers have in common is a thirst for analytical talent.

“They have a demand for financial modelling skills — an ability to analyze a real estate investment,” says Greg Hallman, senior finance professor at Texas’ McCombs School of Business, which offers an MBA track in real estate.

“What they like about our newer students is their technical skills,” he adds. “And the industry does expect students to know the newest tools.”

At McCombs, big data is breaking into the real estate curriculum — Greg says the school is always pinging its advisory board to find out what the latest analytical tools are. And he’s not alone.

“We have a number of courses that our students take in real estate modelling. It’s a required, core course,” says Dustin Jones, director of the Baker Program in Real Estate at Cornell University.

Andrea Heuson, professor of finance at University of Miami School of Business, says the school offers a project management and modelling class to MBAs who are keen on real estate.

Advanced financial modelling is one of the four key skills needed to succeed in real estate careers, says Morris Davis, real estate chair at Rutgers Business School.

The number of MBA programs focused on the booming property market has ballooned in recent years.

The attractiveness of real estate as an asset class is pushing up demand. Investment yields and asset values in commercial property have risen as interest rates have stayed low.

“The market has performed well post-crisis,” says Matthew Cypher, director of the Steers Center for Global Real Estate at Georgetown McDonough School of Business.

Applications to these programs have surged. Stijn Van Nieuwerburgh, director of NYU Stern’s Center for Real Estate Finance Research, says: “The tangibility of real estate assets differentiates it from finance in a way that many students find very attractive.”

Even if you’re not eyeing a career at a real estate private equity firm, you should know about the industry, argues Lynne Sagalyn, director of the MBA Real Estate Program at Columbia Business School.

“Anyone intending to make a career in finance should know something about commercial real estate,” she says.