Real estate students learn through experience in capstone project

The Nathan S. Collier Master of Science in Real Estate program completed its annual capstone project on May 3. This year’s winner was Team Ken, which consisted of Ken Trujillo, Aaron Banks, Peter Starr, Scott Steckroth and Prosper Surujon.

The competition provides MSRE students with one final experiential learning opportunity before graduating and beginning their careers. Students are given information on a property owned by Covenant Capital Group, a real estate private equity firm which manages over $500 million of equity invested in approximately $1.8 billion of apartment assets. Co-Founder and Managing Partner Rick Scarola, who is also a Bergstrom Real Estate Center Chairman Circle donor, provided this unique opportunity to the MSRE class of 2018, and Vice President and MSRE graduate Brian Lott helped coordinate the project.

Students were broken into five-person teams and had to come up with their case for why the Fund should sell or hold a community known as 1020 at Winter Springs.

“Every form of real estate faces the simple decision of: should I sell or should I hold?” Trujillo said. “This project allowed me to evaluate a buy or hold analysis from the perspective of a general partner fund manager. Being able to see this sell-or-hold decision from multiple stakeholder’s perspectives will certainly be mirrored in my future real estate careers.”

The assignment was broken into five group presentations over a one-month span. During the week the competition was launched, MSRE students traveled to Winter Springs to meet with Scarola and his team. They were able to see the property and gain insight to the area.

Team Ken did extensive homework on the property before the trip and came prepared with targeted questions about the area. They wanted to know about the school district and recent developments in the surrounding region.

“We focused our questions on the submarket and what this area had to offer,” Trujillo said. “We quickly learned that this area was hard to build in but was highly desired. This set the story we ultimately built off of to evaluate what our future strategies would be. We also got a feel for the property’s real quality.”

One major challenge for students was finding accurate information on the Winter Springs property. With every source they attempted to use, the team found inaccuracies or biases that made the information unreliable. These challenges mirrored ones they will face in their careers and helped them figure out how to work around the problems.

The lesson they learned was simple. They had to pick up the phone and have conversations with property managers.

“We did not contact enough property managers directly by phone, and looking back, this was a key deficiency of ours,” Trujillo said. “As millennials, we assume all the information we need must be online somewhere. My team and I spent hours looking for a site that did not exist that was reliable and had good information on property income. When we finally broke down and called people, we were able to gain a lot of insight quickly and with almost no resistance. I was surprised at how willing people were to provide their sensitive information and be helpful to students.”