Every year the National Real Estate Challenge, hosted by The University of Texas at Austin, is a rewarding opportunity for select UNC Kenan-Flagler second-year MBA students who are concentrating in real estate. A group of our faculty and staff select the team based on a qualification paper and case competition.
This year, the committee selected Mehegan Easley, Tip O’Donnell, Zach Spencer, Kevin Wade, Shelton Whitley and me to represent UNC.
We had an initial team meeting to outline anticipated workflow and overall expectations. We each performed research and preparation separately in the weeks prior to the competition. Once the case was distributed, we had 72 hours to turnaround a final product. We received the case on Thursday, Nov. 9 and the clock began.
For the case, each team needed to make a recommendation on a closed-end debt fund that held an underwater mezzanine loan on a power center. The recommendation centered around whether to accept or counter a revised term sheet from the property owner and senior debt holder.
After reviewing the case and debriefing the situation, we decided that the power center was a strong asset with short-term liquidity issues, and the proposed term sheet created a risk and reward imbalance. To build our case, we examined the overall retail market while drilling down into subsectors and each tenant’s health. We reviewed the motivations for all parties in the deal and ran in-depth financial analysis to understand potential outcomes of various scenarios and deal options. Finally, we created an innovative counter proposal to remedy the situation, properly reward each party, and remain in line with the debt fund’s strategy.
After submitting our final product on Sunday night, we divided up talking points and turned our attention toward selling our story. We had a few days in Chapel Hill to practice before heading to Austin on Wednesday, Nov.15.
UT was a gracious host and threw a fantastic welcome party for Challenge participants. We enjoyed getting to know the other participants before the competition, but stayed focused on preparing to deliver a flawless presentation. The next day, our presentation went off without a hitch and we walked out of the room extremely satisfied with our presentation.
The competition was fierce and, unfortunately, the judges did not select us to move forward towards the finals. We remained proud of our work and our pride solidified after several judges approached us to commend us for our innovative thinking and creativity. We watched the remaining presentations, which was a great opportunity to learn from our peers and see a variety of proposals. To cap off the trip, we enjoyed a team dinner to celebrate our hard work, the unique idea we cultivated, and an overall, great experience.
While we did not bring home a trophy, I really enjoyed working on a debt financing case and tackling a real-world problem with my peers. Everyone on the team learned a lot and our innovative approach to the case left a lasting impression to take forward in our professional lives. We are all proud to have represented UNC Kenan-Flagler Business School at the National Real Estate Challenge, and I know it will go down as one of my favorite MBA experiences.
By Braeden Crosby (MBA ’18)