the University of Southern California (1986), Johns Hopkins University (1989), and Cornell University (1996). These programs or concentrations emphasized a broader and evenly balanced education in real estate that recognized the complicated interrelationships between business, design, construction, and the built environment. Unfortunately, the initial focus on holistic real estate education shifted during the last real estate boom, just before the housing bubble burst. The problem started with the concept of securitization applied to commercial real estate. This paved the way for potential misuse with far-reaching consequences for the industry. It created a marketplace for massive amounts of capital, desperate to be placed in this new growing field, which inevitably led to over lending. The financial sector’s attempt to integrate real estate into their normal commodity trading business model compounded the problem due to the reliance on derivatives, and led to the eventual (and unfortunate) loss of any connection between the real asset and the security. The securitization boom had a marked influence on real estate programs, which were forced to incorporate these new products and topics into their curricula in order to maintain relevance and to meet the job requirements of the growing financial real estate industry. In addition, the tremendous success enjoyed by this new sector rendered the impression that highly attractive investment returns could be generated solely through creative financial structuring. Comprehensive knowledge of real estate itself and an understanding of significant external
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Unlike most other sciences, the study of real estate at the graduate school level is still in the embryonic stage. Historically, graduate level coursework in real estate was a small subdivision of business programs or of architecture and urban planning schools. Whereas business school programs emphasize the financial and investment processes involved in real estate, MBA students typically lack adequate understanding of comprehensive real estate principles linked to other fields, such as design, construction, and soft factors that arise within the built environment. On the other hand, real estate courses at design and urban planning schools are often confronted with the opposite teaching challenge, and do not sufficiently cover the economics of real estate transactions. Over the past several decades, the real estate industry has evolved into a discipline of great complexity with an increasingly institutional ownership structure. This increased complexity and internationalization of the industry has created a demand for practitioners with knowledge of real estate which extends beyond that of the traditional MBA generalist. This has led to the creation of new, one to two year graduate level real estate programs, which began with the founding of the NYU Real Estate Institute in 1967 (now known as the NYU Schack Institute of Real Estate) and shortly thereafter, MIT’s Center for Real Estate (1983). In the following years, professional graduate programs or concentrations focused solely on real estate were established by Harvard University (1983), Columbia University (1985),