First Cornell Real Estate Case Study
“Golden Hills” may be a familiar phrase to future Cornell Program in Real Estate students. A case study written by Lars Kollmann (MPS/RE ’09) and Brad Olson, Senior Lecturer, explores the issues encountered by a national developer considering sale or build out of vacant parcels in a master planned community called Golden Hills. The case has been selected for publication in the 2009 edition of the Cornell Real Estate Review and is intended to serve as introductory material for future generations of residential development students.
“Writing the case study was a challenging but extraordinary experience. It was a unique opportunity to wrap up all of my skills and insights learned at Cornell.” said Kollmann. Topics in the case range from market and financial analysis to site planning and to anticipating and planning for community reactions to potential project impacts. Particular emphasis is placed on the quantitative analysis, specifically the impact various product mixes have on absorption rate and profitability.
“We are excited to have the opportunity to craft a case study that deals so directly with current issues in residential development. In future years, this case will serve as an excellent introduction to the industry and its complex issues,” said Olson. Students in Olson’s current residential development course assisted in testing the case. Under the intended approach to Golden Hills, the student must assume the role of Marc Baker, a project manager for Reality Development, a fictitious national developer. Reality Development must decide between building out two vacant but approved tracts obtained through the acquisition of a local developer and selling the land to a competitor. In this context, important quantitative and qualitative factors incident to building on the vacant tracts—including the appropriate product mix, density, pricing, revenue and cost implications, and potential community reaction—need to be considered. Based on this analysis, the student must provide a recommendation as to how Reality Development should proceed.
According to David Funk, Director of the Cornell Program in Real Estate, the Program plans to develop a series of real estate-related cases to complement the courses at Cornell and to eventually make them available to the industry and to other U.S. real estate programs. “The combination of collaboration with Cornell Real Estate Council members, faculty support, and enthusiasm on behalf of our students for case studies culminates in our interest in real estate case development,” said Funk, adding that cases designed around the learning objectives in existing real estate core courses at Cornell is a key goal with student involvement an added bonus. Interested students will work in partnership with faculty and industry professionals having expertise on the subject matter contained in the case studies. Golden Hills, and future Cornell Real Estate cases, can be found through the Program’s web site here.