BY Lake SydneyJune 15, 2022, 7:13 PM
A view of the Cornell Tech Campus and TATA Innovation Center on Roosevelt Island as seen in March 2021 in New York City. (Photo by Roy Rochlin/Getty Images)
A major heat wave in the US market that began at the start of the COVID-19 pandemic has since cooled – and dramatically – to what some experts are now calling the Great Deceleration. But the the commercial real estate market is holding upand grow stronger, despite rising interest rates – a bright spot for both industry and a business school.
Along with the momentum in the commercial real estate market, Cornell University announced last week that it had received a $30 million grant to establish the Paul Rubacha Department of Real Estate. The department will be managed by the Cornell SC Johnson College of Businesswho Fortune ranks as one of the top full-time MBA programs in the country, and the College of Architecture, Art and Urban Planning (PAA).
Cornell alum Paul Rubacha donated $30 million; $5 million of that will be used to encourage more donations through a matching fund challenge. Rubacha is partner and co-founder of Ashley Capitalwhich has a current portfolio of approximately 25 million square feet of commercial real estate.
The donation will also be used to strengthen the existing Baker Program in Real Estate, a specialized master’s program that is currently co-hosted by the colleges of commerce and the AAP. “It’s not just a question of funding and investment, but also of design, of the environment,” said Andrew Karolyi, dean of Cornell SC Johnson College of Business. Fortune. “It also addresses issues such as sustainable cities. We like to call it the holistic approach to real estate.
Fortune sat down with Karolyi to learn more about what the investment will mean for Cornell’s business school and what it plans to do with the money.
The following interview has been edited for brevity and clarity.
An investment in real estate education, New York market
Fortune: Why invest more in teaching real estate at Cornell?
Karolyi: The donation, in its essence, is a testament to the deep passion that so many Cornellians have for the subject and the subject of real estate. I mean not just within our college of commerce but also within other colleges whether it be engineering, human ecology, agriculture and life sciences, and of course the college partner on this gift, which is architecture, art and urban planning. It is not only a question of financing and investment, but also of design, of the environment. It also addresses issues such as sustainable cities.
We believe students in the market crave a holistic perspective on real estate as it relates to their education for their long-term career. They could become real estate developers or work on the asset management side of a ledger, or the operational side of it, or the design side. Knowing every aspect of it is our big differentiator with this program. We have big ambitions for this.
How do you intend to invest in the New York market?
We have the physical footprint in New York, but it’s about using it for that purpose. We have room to Cornell Technology through the Johnson Graduate School of Management; we actually have about 22,000 square feet at Tata building at Cornell Tech on Roosevelt Island. We also have a fully finished seventh floor at 570 Lexington Ave., which I think would be the most ideal location for the Baker program in real estate.
We want to hire teachers to be there in the field. That’s the beauty of having a presence in New York is that we have all the professionals there in this ecosystem that could really transform these students. This will really allow this program to be competitive in the market.
What the Program Means for Cornell Business School
Will real estate programming be available for undergraduate and graduate students?
This $30 million gift will take us to the next level by really strengthening our graduate education in real estate. This is where there is real desire in the market. People come from undergraduate programs in economics or engineering, or they may have taken courses in infrastructure or design. But they want to come in and basically capture that holistic approach. They think long-term career, this pivot of what is called a master’s degree specializing in real estate. I think that’s really where the Rubacha Gift’s energy and focus will really come in handy.
There will be spin-offs to further strengthen undergraduate real estate programs for our Nolan hotel school students, but also campus-wide. We also have a big, big, ambitious goal to have a huge presence in New York for this program. That’s really an important part of it. This donation will give us the resources of this department so that the Baker program in real estate has this platform in New York. It’s really going to be a catalyst for the students.
What type of demand do you expect given what is happening in the real estate market?
It’s more accessible, more open. We have no illusions about the competitive nature of specialized masters in real estate. We know that we are going to have to fight with our competitors. We know that it will be necessary to invest and support the career management functions. We have no illusions about any of this. But I think the real differentiator is that broader approach that comes from the multi-university structure that’s in place.
When can we expect to see changes to the real estate program?
The program has been around for quite a while. It’s not a minute too early for us to start investing. We will immediately invest strategically. There will be a planning group with this inaugural faculty that will be associated with this department that will immediately work on the curriculum for this New York City program for, ideally, delivery within a year. Students who enter the program even this fall will benefit from the second year of their program. We jump in.