CHANGING THE WORLD What your investment in UT makes possible
REAL (ESTATE) WORLD EXPERIENCE McCombs alumnus John Goff gives $6 million to make real estate program No. 1
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McCombs School of Business entered the Fort Worth office of John Goff with an idea. The moments before reaching his door must have felt like something between TV’s Shark Tank and Dorothy approaching the Great
and Powerful Oz. Goff is founder and chairman of Crescent Real Estate LLC, at one time the largest commercial real estate company in Houston, Austin, and Dallas with billions of dollars worth of properties from Los Angeles to Miami. Though his credentials can be intimidating, the man is anything but. Warm and down-to-earth, he talks about his own days on the Forty Acres as if he just graduated.
Above: Dean Jay Hartzell visits with McCombs School of Business students. CREDIT: Courtesy McCombs
School of Business
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Goff, BBA ’77, grew up south of Houston in Lake Jackson, where his father worked at a Dow Chemical plant. He followed his older brother to the University of Texas at Austin to study electrical engineering. One of the perks of that program was the chance to intern every summer back home at Dow. One day during
his third summer back, he got to interact with the business staff there about a chemical plant being built in Brazil. “I realized in that one meeting that I had more in common with the businesspeople than with the engineers,” Goff says. “I really enjoyed learning about the financing behind the project.” When he
returned to Austin, he switched majors. With a hard-won business degree under his belt, he eventually became an accountant at KPMG in Fort Worth, whose primary client was the city’s most famous billionaire family, the Basses. There, Goff interfaced with a fellow UT alumnus he came to idolize, Richard Rainwater, who had made a personal fortune working as the Basses’ chief investment officer. When Rainwater left the Bass family in 1986, he invited the young CPA to join him in the investment business. “I got to learn the world of investments at the heels of a master, and it was a wonderful experience,” Goff recalls. “I got to do a lot of things I probably had no business doing at the time, and I learned a lot of things the hard way.” Goff was only 32 when he pitched Rainwater on the idea of adding real estate to their investments. It was after the hard times of the 1980s, when depressed oil prices, S&L failures, and a stock market crash helped create a general malaise in Texas. The real estate market was significantly overbuilt, and properties could be had at a fraction of their construction cost. “Richard said, ‘I think it’s a great idea. If you want to take charge of it, go do it.’ And so I did,” Goff remembers. Rainwater’s one requirement was that Goff put up his entire net worth. “That was always Richard’s style,” he says. “He wanted his partners to have their entire net worth on the line. It was very scary. I had started out with nothing, and by that moment in time I had built my net worth to probably $6 million, so I risked it all, and with a young family. Away I went.” The decision paid off, big. He bought up large but struggling commercial properties “by the pound” and turned them into lucrative assets, like the company’s namesake, The Crescent, a hotel, office, and retail complex in Dallas. That was the genesis of Crescent Real Estate. He bought The Woodlands Corporation north of Houston. In 1994 he took the company public, and 13 years later he sold it to Morgan Stanley for $6.5 billion. So when those five MBA students and Dean Hartzell came calling, they were calling on someone who knew the industry inside-out. One of the five students was Scott Sowanick, who says, “John is a legend. Meeting and talking with him about our idea was an incredible honor.” Their pitch was to dramatically expand the McCombs School’s Real Estate Investment Trust Fund. The REIT Fund, opened in 2007, is a student-managed investment fund for which select MBA students serve as equity managers, while faculty members and an outside advisory board act as mentors and oversee the fund’s performance. The fund makes McCombs the only business school in the country where students have the opportunity to manage both public and private real estate investment funds as part of their course work. Goff remembers, “Jay Hartzell did a really good job of letting them get involved in the
original template of raising money and how that money could be used. We ultimately modified and expanded the original concept, but it was energizing for him to come in with this elite group of MBA students to talk to me about this idea. That was compelling. I love being around young people and seeing great ideas and their energy. I was once in their shoes.” T he resu lt? G of f ha s g iven UT-Austin a total of $6 million, which will be divided among three areas at McCombs: ••$2 million will go to the real estate fund, and he will match an additional $2.5 million. The McCombs School development office is now raising the matching donations. This will bring the total value of the fund from $3 million to $10 million. The fund’s earnings will be reinvested in the program. ••Beyond that $4.5 million, he has donated $1 million to endow a chair. “We need to bring in a thought leader,” he says, “someone with a real estate research and finance background or experience. It could be a professor, researcher, or an industry veteran.” ••The remainder will support the creation of the John Goff Labs in Robert B. Rowling Hall, the new home of McCombs’ graduate programs. Five conference and presentation rooms will be decked out with Bloomberg terminals and video equipment—“everything the students would need,” Goff says. “This will also let students work with alumni who run real estate investment businesses. That’s where the opportunities are going to come from. They’ll have to present to a board for approval.”
John Goff, BBA ‘77
“This gift will catapult forward a real estate program that is already among the world’s elite.” – dean jay hartzell “What’s really important is Jay’s personal background and his passion for real estate,” Goff says. “That was the catalyst for my decision. I knew that we had a dean in place who was going to be a champion of an enhanced real estate program. “I’ve been looking for the right opportunity to give back to the school that gave me so much in the way of opportunity and experience,” Goff says, “and this was good timing in my life. We have a great program in the business school for real estate and real estate finance, but I think we can turn it into the No. 1 program in the country.” —Avrel Seale s e p t e m b e r | o c t o b e r 2011
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CHANGING THE WORLD What your investment in UT makes possible But to take on this unpaid internship, the undergraduate had to say goodbye to her paying part-time job. Thanks to a new scholarship available to College of Fine Arts students, she was able to do that and still support herself. For the first time, Fine Arts students are using scholarships specifically designed to support them during internships. The scholarships, made available this semester, will be available going forward in the fall, summer, and spring.
“The intern scholarship has provided me with the financial stability to pay my bills. I could not be doing this internship without the scholarship and am forever grateful.” – ellen piazza
Violin performance senior Ellen Piazza CREDIT: Courtesy
Jocelyn Chambers
ART WORK
Fine Arts students get hands-on experience from donor-funded internships
A
s a n inter n w ith
A ustin C ity L imits L i v e at T he Moody T he ater , E llen P i a zza
is learning firsthand what it’s like to work at one of the local music industry’s most iconic venues. “I am constantly handling different and unique projects, and I love
How Scholarships Affected Me ANNA SCHATTSCHNEIDER, BA ’17 HOMETOWN: Berlin, Germany MAJORS: Plan II Honors, History, German
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cholarships have allowed me to think outside the box and the classroom by giving me a unique educational experience. They allowed me to participate in the Normandy Scholars Program, in which I spent a summer in Europe studying World War II, and to conduct independent research in former secret police archives in Germany. Without funding, my education would have been a lot more conventional and less exciting and enriching. This university has brought me face to face with the most amazing people, including students, professors, and staff. I think that is the beauty of this institution—it fosters learning in the most human setting: a community. The community I found at UT has helped me grow, challenged me, and confronted me in such a way that it makes me somewhat sad to graduate, but also excited to embark on creating such communities of learning in new settings outside the classroom. My degree has allowed me to study a wide range of topics, and this interdisciplinary approach is something I hope to implement as I pursue a master’s degree in public history. I hope to make history interesting and tangible for an audience removed from academia. I realize donors are usually thanked for their money, and I think they also should be thanked for the experiences they make possible. Anna has been supported by four scholarships: the Thomas A. Sullivan Endowed Presidential Scholarship; the Matilda Weeden Barker Scholarship in History; the Dr. Bailey R. Collins/Ellene Collins Ward/Mary Sue Collins Hibbs Scholarship Fund; and the Charles Paul Shearn Endowed Scholarship. If you would like information about how to support Longhorn students with a scholarship, call (512) 471-5424 or email giving@austin.utexas.edu.
working with so many different people who all love music,” says Piazza, a senior
studying violin performance at the Butler School of Music.
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The Meredith and Cornelia Long Internship Fund and the Becker Intern Scholarship are need-based scholarships that offer undergraduate and graduate Fine Arts majors the opportunity to professionalize their artistic and entrepreneurial ambitions. Students must demonstrate significant financial need to receive a scholarship and can receive up to $2,000 of funding to support their internship experience. Students who are traveling outside of Austin for their internships may apply for an additional $1,000 to use toward travel and lodging. “These internship experiences can play a major role in obtaining a job after graduation,” says Karen Munnelly, director of professional programs for the college. “Many students work while they are in school, and that can make participating in an internship very challenging. The goal of the scholarship is to offset some of the financial burden students face and level the playing field, so that it is possible for them to do an internship.” This semester five students received intern scholarships, and Munnelly says she’s eager to hear how it helped and see the program grow and expand. Internships not only give students valuable experience, but the work also can allow students to narrow down their career choices. “Finding the place in the arts world that is the right fit is very important,” she said. “Students also have the opportunity to apply concepts and theories they learned in the classroom to a real-world setting. This work experience will make them much more competitive in the job market.” “ We e s t a b l i s h e d t h e Meredith and Cornelia Long Internship Fund because we have seen firsthand the benefits of sponsored internship,” Cornelia Long says, “as much for the student as for the institution where they carry out their internship. We hope that our internship fund allows UT students not only to have a great résumé but also to have great exposure working in a professional environment in their chosen fine art field. “We support the College of Fine Arts because we feel that they have a great program and we would like to see it prosper. One of the ways that we reflect our support is through our Meredith and Cornelia Long internship fund.”
Changing the World is produced by the University Development Office. Please send your feedback and suggestions to Alisa Cohen Victoria at alisa.cohen@austin.utexas.edu. For more news and information about giving to UT-Austin, visit giving.utexas.edu.
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