Stanford Wins NAIOP’s Real Estate Challenge, Closing in on Cal’s Lead

NAIOP, Annual Real Estate Challenge, San Francisco, Bay Area, University of California, Stanford University

NAIOP, Annual Real Estate Challenge, San Francisco, Bay Area, University of California, Stanford UniversityBy Daniel Smith

Among veterans of the Annual Real Estate Challenge produced by the San Francisco chapter of NAIOP, there is a tendency to wax nostalgic about those days of yore, when the Golden Shovel was stolen back and forth by student pranksters from the University of California and Stanford University.

Wait. Check that. That’s the Stanford Axe that used to get stolen.

[contextly_sidebar id=”T8IZeVKUufNWLEunU4rkYxKL5uUHsoTf”]One could hardly be blamed for confusing the two prizes, however, for the NAIOP Real Estate Challenge clearly plays off some Big Game traditions in taking the historic college rivalry to a different arena.

The Challenge was created for the commercial real estate association in 1990 by Steve Chamberlin, a developer and Cal professor who wanted to give graduate students some hands-on experience in real estate development. Every year since then, five-member student teams from each school have participated in the competition, which concluded this year with a luncheon May 5 at the Four Seasons Hotel in San Francisco.

“The motivation to do well in front of this audience brings out really outstanding presentations,” said longtime event chairman Dennis Williams, managing director at NorthMarq Capital who has worked on the Challenge since its inception. Explaining that the 20-minute lunchtime presentations are the final criteria before a winner is named, he added, “We get great attendance and people don’t leave.”

Each year an actual development opportunity in the Bay Area is chosen for which the two teams create development proposals, with this year’s site being the Prologis warehouse site at 245 S. Spruce Avenue in South San Francisco.

“They want to see what the possibilities are for their site,” said Williams of Prologis, conceding that the event is “playing on a natural rivalry between Cal and Stanford.”

The teams check in with a mentor halfway through the two-month competition, with Drew Hudacek of Sares Regis Group as the 2016 mentor for Stanford and Craig Davey of Diablo Wealth Management for Cal. Each team was told that Prologis itself would only be building an industrial plan and will view non-industrial proposals as potential land-sale opportunities.

The brisk 90-minute luncheon begins with a brief history of the program, followed by presentations and Q&A’s by the teams and concluding with tabulation and announcement of the winner. The Cal Development Group won last year with a proposal for Pier 1 at Fort Mason, but Stanford won back the Golden Shovel this year. It is the Stanford team’s third win in the past four years, closing Cal’s lead in the competition to 15-12 overall. The Cal team was represented by Jeff Bean, Samuel Becerra, Chiaki Nakajima, Jamie Robertson and Charles Tilleman. Stanford’s team was comprised of Travis Duncan, Ker-Wei Kwee, Diego Llano Salas, Kanika Pasricha and Deborah Stamm.

The teams make presentations in the morning to the six-member competition jury. This year’s jury members were Cathy Allor of Northwestern Mutual, Margo Bradish of Cox, Castle & Nicholson, Cathy Greenwold of TMG Partners, Carl Shannon of Tishman Speyer, Scott Stafford of Strada Investment Group and Marc Thompson of Mechanic’s Bank.

Stanford’s proposal focused on redevelopment of the project into a modern makerspace, a hybrid of industrial and office space that would allow Prologis flexibility for adaptive reuse later on, while at the same time generating a healthy 25 percent net present value increase over continued industrial use that exists today. The redevelopment opportunity was also presented to meet San Francisco’s goal of growing the economic base for high and low skilled workers as well as meeting the city’s objectives around creating more Production, Distribution & Repair space, which is extremely supply-constrained.

Other chapters of NAIOP like Seattle, Denver and Los Angeles have picked up on the Challenge idea for their regions, but Williams said most invite more universities.

“We believed that keeping it to the two schools makes it more interesting,” he related, adding that they just put the Challenge out to the two bitter rivals, “and then you let fear and competitiveness do the rest.”