Last week, Cornell University hosted the 5th Annual Real Estate Shark Tank for the graduating class of 2019 of the Baker Program in Real Estate. This capstone project is a culmination of two real-world courses that prepare students to pitch real estate development deals – the first, on the zoning, entitlement and subdivision approval processes, the roles that major participants, both public and private, play in that process, and the law that controls such approvals as it relates to the deal; and the second, a peer-reviewed pitching of their deals. The top teams are selected to pitch their deal before a panel of real estate “Shark Tank” investors and an audience of students, alumni, and real estate industry members.
This year, as with previous ones, there were some known faces of the industry on the panel of sharks. These included James Eisenberg (AAP ’96 and MPS ’02), Executive VP of Urban American; Joshua Eisenberg (AAP ’96 and JD ‘00), Executive VP of Urban American; Tammy Jones (A&S ’87), Co-founder and CEO of Basis Investment Group; Matthew Mitchell (ILR ’97), Managing Partner of SteepRock Capital, LLC; and Dionis Rodriguez (SHA ’98), Founder and Managing Principal of Crimson Rock Capital. The panel was moderated by Dustin Jones, Director of the Baker Program in Real Estate. Three students, Tyler Phelps (Baker ’19); Krizia Calmet (Baker ’19); and Ershad Chagani (MBA ’19/Baker ’19), presented their deals to the sharks, seeking LP equity investment of between 1 to 1.5 million dollars.
Tyler Phelps pitched a multifamily ground-up development opportunity in Salt Lake City, UT located in the historic Granary District neighborhood. The project honored the rich crossroads tradition of the east and west sides of the transcontinental railroad with quick access to downtown amenities and major CBD employers while maintaining affordable living accommodations. The opportunity is positioned to capture the demand for the underserved mid-market apartments in a vibrant neighborhood. The sharks raised potential issues of the Opportunity Zone across the street and the nearby Transit Oriented Development zone being competition to the tight exit cap rates. They looked to continue the conversation with Tyler if incentives could be secured from the City and if the offering could be restructured as microhomes to ensure affordability.
Krizia Calmet proposed a value-add deal of a multifamily asset in a century-old brick colonial building with ground-level offices and below market-rate apartments on the upper stories. The project was pitched as a 12-month renovation to convert the property to market-rate apartments with cosmetic upgrades, structural changes, and in-unit enhancements to generate substantial project returns. The sharks promised investment of $1 million if the deal was repositioned as only renovation and without build-out and targeted towards either the younger population or workforce housing instead of empty nesters as originally proposed. Krizia was happy to accept the recommendations and is in the process of furthering these discussions.
Ershad Chagani proposed the rehabilitation of a vacant two-story, 18,000 square feet brick-façade building constructed in 1912 in Edmonton, Canada. Located in Old Strathcona, Edmonton’s entertainment district, the building has evolved from a garage to a restaurant over the past hundred years. The pitch was a value-add proposal to reposition the building by modernizing and re-tenanting the main floor with quality retail and developing 12 one-bedroom apartments on the second floor. The Sharks urged Ershad to consider the potential for a food hall instead of the proposed traditional F&B retail. Ershad will continue the discussion after considering these possibilities.
This was an excellent learning experience for not just the students pitching, but those who will go through the process next year as well. The real-world stakes and rewards are a unique proposition of the Cornell University Real Estate Shark Tank. The Baker Program congratulates Tyler, Krizia, and Ershad for successfully going through the rigorous process and wishes them luck in the execution of their pitched projects.
