Botte is keeping his eye on deals in the Southern California market. “There comes a point where the amount of runup and people's incomes have not kept up,” he says.
The risks associated with potential builder partners in those markets will be analyzed even more closely, Botte says, and he expects to close smaller deals, both in terms of units and dollars. “We're looking toward three years or less. We can judge the here and now,” he adds.
Bank of America's Johnson believes the positive changes he's seen in the housing market are here to stay. “At the end of the day, it becomes a question of end demand. It seems that in the intermediate and long term, the industry has a bright future,” he says, adding hopefully, “We have interest in that being the case because we've put a lot of capital into the industry.”
School DaysA crash course on real estate development helps executives learn the business.
Success in real estate development comes from more than skill in construction, finance, and sales. Twice a year, classes of about 25 real estate professionals learn just that in the University of Southern California's Lusk Center for Real Estate's Ross Minority Program in Real Estate, designed to teach the ins and outs of urban development.
Students—most of whom have prior experience in some aspect of real estate—learn about a wide range of topics such as feasibility analyses and delivering units. Finance comprises much of the curriculum, but the program takes participants beyond books; real investors interested in making deals attend the sessions as guest speakers and meet students over networking dinners.
“The most important part of the program is creating the network,” says Nicole McAllister, the Lusk Center's executive director of development and external affairs, who adds that having more than 300 fellow alumni gives participants a ready supply of colleagues from which to build development teams.