By Ryan Lovell, Class of 2019
On October 25th, the University of Chicago participated in its inaugural Real Estate Debt Case Competition for the Commercial Real Estate Finance Council (CREFC). The Booth team successfully secured first place at the competition.
CREFC is the trade association for the $3.9 trillion commercial real estate finance industry. More than 300 major companies and 9,000 individuals are members of CREFC. Member firms include balance-sheet, securitized, and high-yield lenders, loan and bond investors, private equity firms, servicers and rating agencies, among others. CREFC is organizing this year's competition in partnership with Georgetown University's Steers Center for Global Real Estate. The University of Chicago was among a select group of institutions invited to apply to compete at this event, which is invite-only and boasts an attractive award incentive to the top-three winning teams.
Case competitions are very much considered a key part of the MBA experience and there is a wide variety of case competitions - from Design Thinking to Sports Analytics. Below, I share more about my experience competing and insights for Boothies interested in navigating case competitions – and landing that #1 prize— in the future.
What was the competition about? Who organized it and where was it hosted?
The competition was from the perspective of an alternative lender whose client wanted to refinance a five-building real estate portfolio and to substantially cash out his equity position. What made it particularly interesting was the assets were transitional at different stages, meaning we had to manage varying levels of risk over our five-year forecast. We were given market information to underwrite cash flows and value the assets as well as the debt fund’s general access to the capital markets. The competition was organized by the CRE Finance Council and was hosted in New York City, and the case was based on a real transaction and written by Georgetown University.
What motivated you personally to enter?
The Real Estate Group has a goal to increase awareness of its students in the professional community so as a co-chair I was more than willing to enter a competition to help us do that. And a week’s worth of working on the case plus a day of presenting seemed well worth the $20,000 prize to me!
Who was on the team and what sort of unique backgrounds/skillsets did they each lend to the competition?
Our team consisted of five people, including one undergrad per competition rules, who had varied backgrounds in real estate or debt. Shout out to David Roellig, Ken Cramer, George Posner, and Isabelle “Nazzie” Talebi!
What was the format of the competition? What was your approach to the case and what do you believe set the team apart?
The teams were divided among three rooms for a preliminary round during which they made their presentations to a panel of judges. The winning team from each room of the preliminary round moved on to present in front of new panel of judges and the rest of the competitors.
What set us apart from other teams was the ability to quantify risk and customize a realistic loan execution that protected the lenders’ interests and achieved all of the borrower’s objectives; then we used structuring to reach the fund’s target return. We also stress tested our assumptions through downside scenarios to ensure the borrower would be able to continue to service the debt. Other teams seemed to focus on stacking leverage – great for amplifying returns – with little regard for the extra risk and difficulty of a loan workout with so many lenders in the event things went south.
What other teams were competing and what left you most impressed by your competitors?
It was the inaugural competition for the CRE Finance Council and they personally invited 12 schools including Booth, Harvard, Columbia, Wharton, Yale, and NYU. We only got to see the other finalists present, but were impressed with the creativity used to form their recommendations.
Have you competed in other case competitions? What was surprising or fun? Is there any advice or parting wisdom you would give about entering and competing in this sort of competition? What would you do differently/do again to grab that #1?
I have competed in three case competitions so far: CREFC Debt Competition (1st out of 12), ARGUS National Competition (3rd out of 40), and the UT Austin Investment Challenge (4th out of 20). Most surprising to me, these competitions come up in interviews and networking all the time. My advice to anyone competing is that the numbers and recommendation are critical but only the beginning; the quality of your presentation and how well you present to a room full of people is what determines your fate.