Real Estate Society of SDSU
Corky McMillin Real Estate Center Newsletter 04/06/2010
  Add Comment Two SDSU RE Majors Awarded Scholarships 03/09/2010
 Left to right: Matt Reid (NAIOP San Diego president); SDSU student, Sean Bascom; Bill Rodewald (NAIOP San Diego scholarship co-chair) SDSU real estate seniors, Nathan Rea and Sean Bascom, were awarded scholarships by NAIOP (Commercial Real Estate Development Association), San Diego chapter. The two were given the scholarships on Friday, February 5, 2010 at the San Diego Marriott Del Mar during chapter’s third annual Breakfast with the Mayor event. With San Diego Mayor, Jerry Sanders, in attendance, Bascom and Rea were presented the scholarships, worth $2000 each, by Bill Rodewald and Charlie Abdi, NAIOP San Diego scholarship chairs, and Matt Reid, NAIOP San Diego president. To be eligible for the scholarship, students must be members of the Real Estate Society of SDSU and student members of NAIOP.  Director of real estate center sees opportunities-His goal is to bring students into the field 02/28/2010
 Michael Lea, director of the Corky McMillin Center for Real Estate at San Diego State University, sees housing prices falling a bit in 2010. He expects the demand for rentals to increase. Michael Lea came to San Diego State University’s newly established Corky McMillin Center for Real Estate with a résumé full of casualties he witnessed firsthand: Imperial Savings, a San Diego thrift that went belly-up in the ’80s; Freddie Mac, the secondary lender where he served as chief economist long before it went into receivership; and Countrywide Financial, taken over by Bank of Americaafter he left a job overseeing an expansion abroad. Combining academic work in mortgages with real-world experience in the real estate business, Lea has to find a way to attract students to a field in the doldrums. He also must reach out to San Diego’s real estate professionals, who he said are looking to upgrade their skills in time to ride the next wave of a cyclical market. For the moment, Lea, 60, is a lonely soul in Suite 312 of the Business Administration Building — no colleagues and little money to invest in growth. (It’ll be on his own nickel if he travels to a conference in India this fall.) But he just got approval to hire an assistant, he’s planning a reunion of about 1,400 SDSU alumni, and he wants to invite developers, bankers and other real estate types to present case studies to classes. Lea also wants to restart a master’s program in real estate. He sat down last week to discuss the turmoil in the real estate market and the outlook for this year: QUESTION: Why would anyone want to major in real estate when the business is in such a slump? ANSWER: What I tell students is, yes, employment is down and opportunities are down, but in large part I think we’re at the bottom of the cycle. If they’re thinking of getting into real estate, they won’t get out for one to three years, and hopefully the market will have recovered significantly — though I don’t think we’ll ever again see the 2005-2007 heyday in real estate. That was an anomaly, and actually, I hope we don’t go back to that. But within real estate, there are a lot of opportunities (such as property management and lending). I think jobs are still there, not as many and a little more narrow. The other thing is you’ve cleaned out a lot of people from the industry, and a young person coming in with some new ideas and a lot of energy might actually do quite well. QUESTION: Where do we stand in the real estate cycle, starting with housing? ANSWER: While there are some favorable signs, such as house prices inching up and foreclosures falling here in San Diego, we’re not out of the woods yet. There are two reasons for that. One is that we still have a backlog of loans in default, which are still rising (up to 9 million nationally that are 60 days delinquent or in various stages of foreclosure). A lot of the loans are in the trial modification program — over a couple million — but there have only been about 50,000 permanent mods. There are factors hampering the success of the modification program. The first is unemployment: It doesn’t help to lower your mortgage payment if you don’t have any income. The second and more important factor is the fact that so many households are underwater with negative equity. Ultimately, a lot of these loans are going to go through foreclosure, either through a short sale (selling for less than the mortgage balance) or bank REO (banks taking back the property and reselling it). That’s going to put downward pressure on house prices. The other thing that’s out there is a degree of overhang of people who would have liked to sell their house for lifestyle or job change, what have you, that have held off voluntarily. At some point in time, some of that supply is going to come onto the market. So you’re going to have a situation where there’s an excess in supply, and that will keep a lid on prices. It may not mean a sharp decline, but I actually see house prices falling a bit during 2010 due to continued problems in that area. QUESTION: What about the new-home market? ANSWER: We’re not building new houses and a lot of new housing inventory is being worked off, so in terms of new-home construction, you’re going to see that that’s bottomed and I think is going to pick up some. There certainly are people that have money and want a change of house. QUESTION: How do you see the nonresidential side? ANSWER: We’re in a situation now where the price declines are such that there’s not much in the way of equity position for existing owners. But if you have a good-quality, good-location building, then it is probably cash flowing; interest rates are relatively low; so “pretend-and-extend” from the lending standpoint is the name of the game, and you’re going to ride it out. We had excess construction in all sectors during the boom, and it’s going to take several years to work that off. One bright spot is apartments, because I think we’ve seen the homeownership rate is declining, and it has more to decline. I think as more people realize that homeownership is not quite what it was cracked up to be and we’re not going to have marginal people buying homes anymore, that’s ultimately going to mean more people going back to the rental sector. We’re growing as a population, and people have to live somewhere, so I think the rental market is in relatively good shape and will strengthen as we go forward. QUESTION: Finally, why didn’t we see this coming? After all, real estate does occur in cycles. ANSWER: There is a finance concept called “disaster myopia.” When you have events that take place infrequently, such as serious real estate cycles, people tend to forget over time how bad those downturns and cycles were, and you have a gradual trend away from prudent standards, particularly on the lending side. Real estate is an industry that is populated by inveterate optimists, and I think lenders have a lot herd mentality, and you get lenders seeing good times again and the herd is going to follow them. QUESTION: So will it happen again? ANSWER: We’ll be long gone, but I think it will probably happen again. (He cites a book called “This Time It’s Different” that traces economic panics back to the 1600s.) The answer to the question is it isn’t different. There is history, we know it happens, but it seems we as a species are unable to do anything about it. This is your new blog post. Click here and start typing, or drag in elements from the top bar.  In this photo made Jan. 11, 2010, Joe Bonin, president of ECP Commercial, a real estate company based in La Mesa, Calif., stands in front of a strip mall that his company has purchased and is renovating. Bonin has seen his revenue jump 75% from last year with his new business approach designed for a down economy. (AP Photo/Lenny Ignelzi) By TOM MURPHYAP Business Writerupdated 9:37 a.m. PT, Tues., Feb. 23, 2010 function UpdateTimeStamp(pdt) { var n = document.getElementById("udtD"); if(pdt != '' && n && window.DateTime) { var dt = new DateTime(); pdt = dt.T2D(pdt); if(dt.GetTZ(pdt)) {n.innerHTML = dt.D2S(pdt,((''.toLowerCase()=='false')?false:true));} } } UpdateTimeStamp('634025434600000000');Some small businesses are not just surviving but thriving — even benefiting — from the economic weakness that has battered so many other smaller firms. Some have carved a niche few rivals can match. Others are capitalizing on a fallen dollar to boost their exports. Or they're providing a service that defies a pullback in consumer spending. And if they haven't piled up too much debt, some small businesses can still get loans, despite tougher lending standards since the financial crisis erupted. Success stories include: — Equinox Chemicals, a company in Albany, Ga., that's thrived by mixing a broad domestic customer base with overseas business. Equinox has capitalized on a fallen dollar to expand overseas markets for its products, which include chemicals for fragrances, food flavoring and electronics equipment. — ECP Commercial Real Estate, a San Diego firm that fixes up foreclosed or abandoned properties to sell them and helps property owners avoid foreclosure. — Inwindow Outdoor, a New York company that converts vacant storefronts into temporary, street-level advertising billboards. These companies are resisting the economic pressures that have left many small businesses starved for credit and squeezed by the still-struggling economy. "There's always those innovative entrepreneurs out there that have businesses that are flexible enough to do this type of thing," said Lydia Jones, director of the Small Business Development Center at Kennesaw State University in Georgia. In some cases, the weak economy has even been good for business. Customers have streamed into Joseph's Jewelry and Loan, an Indianapolis pawn shop, looking for quick cash or help covering mortgage payments. The store pays cash for valuables or provides loans that come with a 20 percent finance charge — a benefit to people who otherwise can't get credit. Sales rose about 60 percent last year compared with 2008, store manager Kevin Parrish said. Small businesses that export can do well in today's economy because a still-weak dollar means U.S. exports are cheaper for many foreigners to buy. Equinox, for instance, does business in 10 countries, including Germany, France, Spain, India, China and South Korea. In 2008, international sales become the fastest-growing part of its business. Equinox and its owner Mark Grimaldi got a big break last year with a contract to make chemicals for a South Korean drug company, said Dimitris Kloussiadis, an international trade consultant at the University of Georgia who has worked with Equinox. The chemical maker received a $500,000 bank line of credit guaranteed by the Small Business Administration to start work and paid it off in less than a year. Kloussiadis said Equinox more than doubled its total export sales in 2008 in the first nine months of last year. "Mark is in a very niche market, and very few companies can produce the substances he produces," he said. The same might be said of Inwindow, which started placing advertising in vacant retail storefronts in 2002, creating instant billboards at city street level. "We're very busy," CEO Steve Birnhak said. The Scottsdale (Ariz.) Convention & Visitors Bureau used Inwindow to set up an ad in early 2008 in downtown Chicago to attract tourists looking to escape winter. The display, which covered several storefronts, showed alternating pictures of people trudging through a heavy Chicago winter and sitting poolside or golfing in Arizona. The display ran for two months, advertising a contest to win a trip to Scottsdale. More than 10,000 people entered. "At the time, it was the largest response we had ever had to a promotional campaign like that," said Lauren Simons, marketing vice president for the visitors bureau. Inwindow's rising sales have led Birnhak to consider expanding to Europe. The company already operates in 18 U.S. cities. An ample supply of empty storefronts — "inventory," Birnhak calls it — is helping. Landlords have become more accustomed to the ads as a way to make money until their next tenant fills the space. William Walther was concerned at first about the ads Inwindow would place in a Manhattan development that includes condos and a hotel. Walther, president of Granite Companies Asset Management, hired Birnak's firm as work wrapped up on the complex south of Times Square. He needed something to cover vacant windows for storefronts the building contractors were using as offices. Inwindow gave him a BMW ad, and he's been sold on the concept since. "I think that when you're in the hotel business, you want activity around the lobby of your hotel," he said. "If you don't have retail ... you certainly don't want windows that are filled with brown paper." Joe Bonin's San Diego real estate company used to focus mostly on managing and leasing retail strip malls and industrial and office parks. Once the recession hit, revenue tumbled as tenants moved, stopped paying or switched to shorter, less-profitable leases. "I was really wondering if the business was going to survive," Bonin said. That's when he decided to focus on work more suited for a slumping economy. His company now fixes up foreclosed or abandoned properties to sell. ECP found tenants to live in a foreclosed condo complex in Spring Valley, Calif., owned by Pacific Western Bank. Besides leasing the property as apartments, Bonin's company took over landscaping and cleaned up the units, said Dave Jensen, Pacific Western's credit administrative officer. That made the complex more marketable, Jensen said, because banks would be reluctant to extend a loan for a property that doesn't generate any income. Bonin's company also started acquiring distressed commercial real estate, breaking it into pieces and then selling it. Revenue surged about 75 percent last year compared with 2008. "It's not about turtling down and then saying, 'Well, I'm going to survive until we get to the other side of this thing,'" Bonin said. "We have to make fundamental changes." While these companies succeed, many small businesses are suffering. Falling sales and rising health care costs have hit hard. So have the stricter standards for bank loans, which now come with higher rates, tougher terms or demands for more collateral. The National Federation of Independent Business' small business optimism index has reached lows not seen since the early 1980s. The monthly gauge tracks companies' job creation and capital expenditure plans, among other variables. "It's harder to get the financing you need," NFIB Chief Economist William Dunkelberg said. The small businesses now finding success generally weren't swamped with debt when the recession started, said Sanford Ehrlich of San Diego State University's Entrepreneurial Management Center. And if their core business declined, they've been able to adapt to a sluggish economy. "It's sort of looking at an engine and having a lot of dials in front of you, and they watch all those dials simultaneously," Ehrlich said. "And they know which levers to push to move those dials." Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. By JEN LEBRON KUHNEY, The Daily Transcript Friday, December 4, 2009 The walls were practically bare in Michael Lea's office. Décor on his desk and bookshelf was sparse and a laptop he brought with him from home sat atop a desk with no paper on it in sight. The office was quiet. It was the opposite of the hallways on the other side of the wall to his right, which were teeming with students heading to and from classes in San Diego State University's business administration building. Most of the students didn't know Lea was there. A visitor asked a small group of business students chatting in the hallway if they knew where Lea's office was and was met with puzzled looks and the question: "Who's Michael Lea?" It was to be expected, to a certain degree. When the visitor found her destination, Lea joked there wasn't much to his office, but couldn't be blamed. He was only appointed the director of the university's fledgling Corky McMillin Center for Real Estate a couple weeks prior. But Lea is definitely not new to academia. After studying economics and business administration at Iowa State University and the University of North Carolina Chapel Hill, Lea went straight into the academic arena. He taught at Cornell University in the early 1980s and was tenured.  However, he heard Washington, D.C., calling with the opportunity to help shape national policy, and joined Freddie Mac. Through the mid-1980s, Lea served as Freddie Mac's chief economist. After four years, he headed to San Diego with an opportunity from the now-defunct Imperial Savings. The bank went under in late 1990, and Lea had to go back to the drawing board with his career plans. "I'm sitting here in 1991, thinking 'OK, what am I going to do now?'" said Lea. "But my academic and Washington, D.C., training really helped me a lot for allowing me to rebrand myself." He and a partner put in a proposal with Fannie Mae to study international mortgage markets and won a yearlong contract. The year launched Lea into a new phase of his career: international real estate with his new firm, Cardiff Consulting Services. Over a span of nearly 20 years, Lea did business in countries like Canada, Australia and Denmark -- eventually getting stamps for about 40 countries on his passport. He would bring his wife and son along when he could -- something crucial to his family life, as he had about 180 days of travel a year in the late 1990s.The lifestyle was hectic, but he relished it. "It was constantly different," said Lea about his international consulting work. "I was never doing the same thing over and over like at some desk jobs." The travel toned down when Lea continued his international work with Countrywide from 2000 to 2004. He helped the company expand its global market development. However, Lea said he thought the company "really wasn't serious about doing anything overseas" and returned to Cardiff Consulting. Lea would travel up to half the year, but still tried to find time to teach. He was a lecturer at the University of California-San Diego for three years, but found it was too difficult juggling international consulting with being a professor. Within the last couple of years, Lea slowed down his international travels. He said he feels like it is the right time for him to contribute to both students and the local industry. He began teaching a few courses each spring at San Diego State as an executive in residence for its real estate program. It was there that the real estate advisory board asked him to lead a full-time real estate center. "I thought that's a great combination for me because I'd like to be involved with academics but I also want to be involved with industry," he said. "This particular position is just an interface between that." San Diego is not known for having a real estate hub like some of the other national, major metropolitan areas -- by Lea's account, it is a relatively small market. However, he said he sees potential for local universities to take a larger role by providing highly-qualified employees and practitioners for the future, as well as doing research to benefit the industry. While the University of San Diego has the Burnham-Moores Center for Real Estate -- which hosts large, regional events like forecasts -- Lea said he envisions the SDSU center as something smaller and more intimate. Lea said SDSU plans to focus on its undergraduate program -- another difference between it and the Burnham-Moores center. "At a school like San Diego State, a large portion of the students is not going to graduate school. It's not a vocational education, but you want your students to be prepared for the professional world," he said. "You have to teach the theory behind (real estate practices), but you have to bring it into reality for students."SDSU has a student-run real estate society as well as a real estate major. The 90 undergraduate real estate majors make up less than 0.3 percent of the approximately 34,000 students on campus. But Lea hopes to see that number grow. One of the goals of the center is to increase the exposure of SDSU's real estate program. He said the center's design is "multi-faceted" and hopes to bring in students who are interested in related fields like construction management, city planning and economics. He said he wants to the faculty work together to show how the disciplines are interconnected in the real world."We want to provide something of value for our students," he said. Though the plans have not been set in stone nor has the center truly launched, Lea said he is enthusiastic to increase the exposure of SDSU's real estate department.Most business majors may not know him yet, but if all goes according to plan, the San Diego real estate industry will not need to ask, "Who is Michael Lea?"
The College of Business Administration at San Diego State University (SDSU) announced the launch of The Corky McMillin Center for Real Estate. The Center was established with a donation from the McMillin family who owns one of San Diego’s most successful real estate and development companies. The Corky McMillin Center for Real Estate was created to improve the educational experience for real estate students at SDSU, foster academic research in the area of real estate, and to act as a liaison with real estate professionals, government and industry organizations. “As a real estate professional, I look forward to the contributions The Corky McMillin Center for Real Estate stands to make in terms of real estate research and the education of future industry professionals,” said Mark McMillin (’79, marketing), president and CEO of The Corky McMillin Companies. “On behalf of the McMillin family, we proudly support the continued development of SDSU’s real estate program and the student-run Real Estate Society of San Diego State University.” The College also announced Dr. Michael Lea as the Center’s director. Lea has over 30 years of experience in the financial and real estate industries having previously held high-level positions at Countrywide Financial Corporation, Freddie Mac and Imperial Corporation of America. Lea formerly taught at Cornell University, University of California, San Diego, and the Wharton International Housing Finance Program at the University of Pennsylvania. Currently, he is the principal of Cardiff Economic Consulting which specializes in analysis of domestic and international mortgage markets and institutions. “As the first director of The Corky McMillin Center for Real Estate, this is a once-in-a-lifetime opportunity to further real estate research and expand the real estate educational program at SDSU,” said Lea. “I look forward to the challenges offered by position and I plan to hit the ground running.” “With his real-world expertise and his academic experience, Dr. Lea is an ideal choice to head the Center,” said Mike Neal, chair of SDSU’s real estate advisory board and the president and CEO of the H.G. Fenton Company. “We welcome his arrival at SDSU and eagerly anticipate the leadership Dr. Lea will bring to his new position and to the real estate program.” Lea began his role at the Center on October 12, 2009 and will begin teaching classes during the spring semester of 2010. About the College of Business Administration With over 5,000 students, SDSU’s College of Business Administration is one of the largest business schools in the U.S. Its programs have been ranked among the top programs in the country by U.S. News & World Report, which ranked recently SDSU’s international business graduate program as 11th best in the nation. For more information, visit www.sdsu.edu/business. About SDSU San Diego State University is the oldest and largest higher education institution in the San Diego region. Since it was founded in 1897, the university has grown to offer bachelor’s degrees in 85 areas, master’s degrees in 75 areas and doctorates in 16 areas. SDSU’s more than 33,000 students participate in academic curriculum distinguished by direct contact with faculty and an increasing international emphasis that prepares them for a global future. For more information, visit www.sdsu.edu. Real Estate Society helps students connect 10/24/2009
 One student organization is helping students to stake a claim in the real estate industry. The Real Estate Society of San Diego State is aimed at helping students interested in real estate to network with current professionals and find career opportunities, according to Sean Bascom, business senior and vice president for the RES. The RES is open to students of all majors and Bascom said anyone who might be interested in real estate should attend a meeting, because the industry is about more than just housing sales. “I think a lot of people who aren’t really familiar with real estate think that if you work in real estate you only buy and sell houses,” he said. New this semester, the RES will be offering $10,000 worth of scholarships, which are only open to real estate society members. Four $2,000 scholarships and four $500 scholarships will be awarded. Bascom said the organization was founded five years ago by two students interested in real estate and featured only about six members and no sponsors. Since then, the society has grown to more than 80 members, with several major sponsors including Corky-McMillin Companies and ECP Commercial, and operates with a budget of $25,000. Every semester, RES hosts networking events, social events and weekly meetings. Bascom said networking events give members a chance to connect with professionals in the industry and help students find internships and other job opportunities. The weekly meetings allow members to create and update their resumes, improve their interviewing skills and help arrange meetings and job interviews. The next meeting is from 5:15 to 6:30 p.m. on Oct. 13 in lower Aztec Center. The meeting will feature Michael Hartnett from Ernst & Young, who will be speaking about real estate tax services and what it takes to get into the industry. Students who are interested in RES can find more information can be found at the RES Web site atwww.resofsdsu.com.  Past and Present Society Presidents (from left to right): Joe Anderson, Patrick Hale, Kelsey Stuart, Kate DeBord (current president), Pat Gear The Real Estate Society of San Diego State University held its annual networking and awards ceremony on May 7, 2009 at Scripps Cottage on the SDSU campus. The annual event provides SDSU real estate students the opportunity to network with current brokers, developers and others in the real estate profession. Also, several members of the Society were honored for dedication to the group and the new officers were introduced to the audience.  Members of the SDSU Real Estate Board, left to right: Paul Robinson, Rick Reeder, Mark Selman, Mark McMillin and Ure Kretowicz. The Real Estate Society (RES) of SDSU held a network reception and awards ceremony at Scripps Cottage on the evening of May 1, 2008. Over fifty professionals from the real estate and finance industries of the San Diego area met students actively seeking advice and industry related news. Also in attendance was San Diego State University’s Real Estate Advisory Board and real estate professors.  This program was intended as a way for members of SDSU’s student real estate organization to meet and connect with the Society’s 17 corporate sponsors. A special award was presented to the RES’s outgoing president of over two years, Kelsey Stuart, by incoming president, Patrick Hale. Kelsey has been instrumental in growing the organization from about 12 students to its current membership of over 70. In addition, the group’s business advisor, Joe Bonin and the group’s academic advisor, Mark Goldman and Ure Kretowicz, chair of SDSU’s real estate advisory board gave presentations where they discussed SDSU’s real estate program and the future of the real estate industry.  Mark McMillin, co-chairman and CEO of The Corky McMillin Companies, was presented with a 2008 Monty award by the SDSU Alumni Association during its annual ceremony held March 29, 2008 at the San Diego Marriott hotel. McMillin, (’79 marketing) was chosen as this year’s honoree from the College of Business Administration and he has actively participated in CBA’s Real Estate Board. On March 28, 2008, McMillin met with 12 student officers of SDSU’s Real Estate Society and Financial Investment Society for a luncheon followed by a question and answer session. During the session, McMillin discussed the origins of the McMillin Companies, how his family built their business and some of the challenges faced by his family’s business during the current economic downturn. With operations in three states, The Corky McMillin Companies employ approximately 1000 people and are San Diego’s largest commercial real estate developer and independent real estate firm.  | ArchivesApril 2010 Categories |
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