At Business Schools, Renewed Interest in Real Estate

Students at top business schools are once again focusing on real estate.

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The real estate recovery has been shaky but strengthening, and few know it better than the people whose future fortunes are going to depend up on it. According to several top business schools, student interest in studying real estate has been growing in recent years, providing yet another promising indicator of a strengthening recovery.

Real estate is by no means the top field of study for business school students, but it is starting to regain its former popularity. At Dartmouth College's Tuck School of Business, around 5 percent of the student body is specializing in real estate, says Jonathan Masland, director of counseling and recruiting in the school's career development office. That's a major comeback from where it was just a few years ago, when there was barely any interest, and represents a return to almost where it was pre-crisis.

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"Even after the crash...3, 4 percent of the class was focused on it," he says. "But then after that, because there tends to be a lag in terms of people's response, just a few would commit to real estate."

Other schools have seen similar trends.

"At UW, our applications fell significantly between 2005 and 2010. The quality of students didn't change much, but the number of students did. Now we're seeing applications pick back up again," says Morris Davis, academic director for the James A. Graaskamp Center for Real Estate at the University of Wisconsin's School of Business.

The pickup indicates some of the people keeping the closest watch on real estate—those who want to work and invest in it­—are feeling optimistic. In December, new housing starts posted their highest rate of growth since June 2008. Commercial real estate is also starting to pick up, though some analysts say that new construction will see high growth starting in 2014 or 2015.

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With those upswings already in progress, students considering careers in real estate may want to get into it immediately, if not sooner. Indeed, they may have missed their best chance at making it big in real estate investment.

"The time you want to enter the profession is the time when you expect the boom period to be the longest. You expect the boom period to be the longest at the trough of activity. The question is whether students can time the trough appropriately," says Davis. "I'm guessing that the students with the brightest career perspectives graduated here last year."

That may be true, but it may also come as cold comfort to some of those recent graduates.

"If you're asking the student who's graduating, they don't look at it that way," says Paul Habibi, a professor at UCLA's Ziman Center for Real Estate. While a student who graduated in the last few years may have a long upswing ahead of her, says Habibi, it likely did not feel that way immediately after graduation.

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That was definitely the case for Drew Sadowski, a 2010 graduate of Duke University's Fuqua School of Business and the former president of that school's real estate club. When he graduated from Fuqua, he says, the job market was grim—he can recall only one other student in his cohort getting a job in real estate after graduation. Now, things are just starting to pick up; though he graduated when the real estate market was looking fantastically unhealthy, he believes anyone who even got a job during that tough time likely got a significant leg up.

"In terms of coming out and just getting your foot in the door so that you're ready to jump when those positions come back, I think that's definitely true," says Sadowski.

He's seeing the recovery firsthand in his current position, as a vice president and transaction manager handling real estate at Bank of America. His division is finally hiring again after a hiring freeze that lasted longer than a year.

That could mean a bright future ahead for 2013 graduates who happened to specialize in real estate. They may in the end prove to have been prescient, now graduating with plenty of time ahead of them before the real estate market hits another peak.