Two New York University students had a bet. One said that the team from Wharton would win, and the other wagered that one of the other 14 competing universities would. The members of the Wharton team settled that bet, coming home with the first-place title and a six-foot check for $10,000.
Last week, six members of the Wharton Undergraduate Real Estate Club traveled to New York to compete in the annual Cornell International Real Estate Case Competition, the largest event of its kind. This was the first year that Penn was represented at the competition, and it was also the first year that Cornell’s team was defeated.
Five days before the teams met in New York on Nov. 15, they received an email outlining the details of the case they would be presenting. They were given a portfolio of hypothetical real estate properties and asked to advise either for or against investing.
The case was based on a similar real-life investment opportunity that one of the 15 competition judges had faced a few years prior.
“We switched last minute from a yes to a no because after the model was finished, we realized it really wasn’t worth taking the risk,” said Wharton and Engineering junior Sharon Wang. Team member Wharton senior Christian Hung explained that the team was wary of the level of debt on each individual property, which made them more risk-averse than some other teams.
Each team had 20 minutes to present their analysis to a panel of judges, all of whom were leading figures in the real estate industry. The second half of the presentation was a question-and-answer session, in which the judges questioned the teams about specific details of their calculations and challenged their analyses of the case. “We were really getting critiqued by some of the best in the business, and that was very valuable for us,” Wharton senior Jason Morgan said.
Wharton senior Jay Yang estimated that the team spent about 30 to 40 hours compiling market research, developing the financial models of their proposed investment returns and creating their 60-slide presentation.
But Wharton junior Eric Wright, co-president of the Wharton Undergraduate Real Estate Club admitted, “I could not make the argument that we were over-prepared.” By the day of the competition, they still had not rehearsed the whole presentation as a team. Even though they didn’t get to practice as much as they would have liked, Wang said that all of the team members were talented speakers and the presentation went smoothly.
To preserve the teams’ anonymity and ensure fair judging, each school went by an alternate team name throughout the competition. While most teams went for more traditional-sounding names like Cornerstone Advisers or Commercial Property Advisers, “We tried to take a bit of a more light-hearted approach,” Wright said. Their team name was CMB-Yes, a pun on the real estate acronym CMBS, or “commercial mortgage-backed securities.”
In addition to their element of humor, the team also set themselves apart from the competition in their collaborative presentation strategy. While other teams relied primarily on one or two team members to respond to the judges’ questions, CMB-Yes took a different approach. “Since we all really knew the model inside and out, they asked us questions and our team had everyone answer,” Morgan said.
Even though they ultimately came to the opposite conclusion of the real-life case, the judges were impressed with the overall quality of their presentation. “It was nice to have been given very limited information on a real life case and have the judges tell us our analysis was very close to how they would’ve looked at it in real life,” Yang said.
While the team members felt that their Wharton experience prepared them well for the competition, this competition illustrated the differences between the classroom and the business world. “Our projections were very conservative, which is sort of what our professors are telling us to do, but the judges who are real world professionals, were encouraging us to be more aggressive when making assumptions,” College and Wharton senior Matthew Sherman said.
The team agreed that the opportunity to apply their skills outside of the classroom was an invaluable part of the experience, but their collaborative success was even better. “The best part was the fact that we took the initiative to do something that we’ve never done before and represent our school,” Hung said. “We didn’t go in with any expectations, we just wanted the experience, and we ended up winning.”
This article has been updated to reflect that Wharton and Engineering junior Sharon Wang is not a co-president of the Wharton Undergraduate Real Estate Club.