Interview With Mark Eppli, Director of the Graaskamp Center for Real Estate, University of Wisconsin–Madison

This week I had the opportunity to connect with a real estate professional who’s been on my radar for some time. Mark Eppli agreed to put time aside to take part of this interview where we discuss how the industry has evolved in recent decades, the various programs available to students who want to purse a career in real estate, what ones should pay attention to when developing a sense for how the real estate market behaves, and what lies ahead.

About Mark Eppli

Mark J. Eppli has been the Director of the Graaskamp Center for Real Estate at the University of Wisconsin – Madison since August 2018. Before that, he was the Robert B. Bell, Sr. Chair in Real Estate at Marquette University (2002-2018) and Director of the Center for Real Estate (2009-2018). He also served as Interim Keyes Dean of Business at Marquette (2012-2015) and held various academic roles at The George Washington University (1991-2002).

Dr. Eppli has been an active instructor and author for the Urban Land Institute and worked in commercial real estate before his academic career. He has received several awards for his contributions to the field and efforts to promote diversity in commercial real estate.

Your career spans various academic and professional roles in real estate. What initially drew you to the field of real estate, and how has your perspective on the industry evolved over the years?

Eppli. Jim Graaskamp’s passion, intellect, and thoughtful understanding and ability to present on the built environment captured my imagination and drew me into the field. Graaskamp had a booming voice and captivating view of commercial real estate and how the social, political, and entrepreneurial environments impact our built environment . . . . and ultimately how we live.

The industry has evolved over the past three decades from local developers and capital markets to national property and capital markets. In short, the extraordinarily fragmented industry is turning to large private equity funds for capital, global data providers for information, national competition for tenants, and large-scale multi-city developers.

Additionally, the industry has shifted from the four major property types to two: hospitality and logistics. Hotels, apartments, and office buildings are places where hospitality matters – not space. Retail and industrial space is about the ability to move goods — not store and merchandise goods.

As the Director of the James A. Graaskamp Center for Real Estate, what are some of the most significant changes and innovations you have overseen during your tenure?

Eppli. My role at the Graaskamp Center spans years before and after Covid. While the use of Zoom and Teams has allowed us to bring talent to the classroom from around the globe the role of in-person lessons and applied learning is more important than ever.

Over the past five years, the UW started two new 12-credit graduate tracks in: 1) Real Estate Private Equity Investment, and 2) Affordable and Sustainable Housing Development.  The Real Estate Private Equity Investment track invests in real estate limited partner positions for two alumni investment funds.  Student learning and engagement is off the charts when approaching a live investment opportunity with the ability to present to a talented investment committee.  Live learning opportunities with consequential outcomes is where the most significant innovations are happening in the classroom.

We are doing similar work for the ASHD program.

You have co-authored influential books such as “Real Estate Development: Principles and Process” and “Valuing the New Urbanism.” Can you share some key insights from these works that are particularly relevant to today’s real estate professionals?

Eppli. Real estate development occurs at the intersection of space users (tenants), space producers (developers and capital markets) and public infrastructure (the municipal government) to create spaces and places where we thrive in environments where we live/work/play.

The health and happiness of individuals, communities, countries rely on real estate development that engages our social, psychological, and physical well-being.

Given your extensive experience in both academia and the industry, what do you believe are the most critical skills and knowledge areas that real estate students should focus on to succeed in the current market?

Eppli. First, a broad understanding of urban economics which defines why cities exist and examines which regions within a city thrive – know the setting.  Second, understand the details of lease contracts and market assumptions held in the property income proforma and discounted cash flow analysis and form a deep understanding of development feasibility and the sources and uses of funds – know the details. Third, be able to craft an investment thesis – tell a story.  A high IRR or equity multiple is nice, but the story behind what provide the investment returns is what sells.

You have been involved with the Urban Land Institute and have received recognition such as the Distinguished Fellow title from NAIOP. How have these affiliations and recognitions influenced your work and contributions to the real estate field?

Eppli. Real estate professional organizations have always been a place where best practices and ideas are shared and learned.  Today’s property and capital market data and information is more broadly and transparently distributed than ever before, however, due to the site-specific and idiosyncratic nature of real estate development, ideas are not easily shared on large platforms.  The need to take best practices from one community to another is a critical role that real estate professional organizations play.

Sustainability and urban development are increasingly important in real estate. How do you see the role of sustainable practices evolving, and what impact do you think this will have on future real estate projects?

Eppli. As we learn about the social, psychological, and physical needs of humanity, the places we develop will evolve.  I believe that the current focus on sustainably and locally sourced building products and the need to place development in places that reduce our carbon footprint will morph into a user or tenant-focused built environment —  a place where humanity thrives.

Looking ahead, what do you see as the biggest challenges and opportunities for the real estate industry over the next decade, and how can professionals and academics prepare to address them?

Eppli. The urban built environments are changing across the U.S. and will do so at an accelerated pace.  Many downtown office buildings have lived beyond their economic life and will need to transform, adapt, reconfigure.  From office buildings without tenants to parking structures without cars (think autonomous vehicles) the type of space needs in the future are not the same as those that got us to this point.

The ability to commute in light-weight, portable electronic transportation devices (think electronic scooters and bikes that collapse into something the size of a briefcase) and the ability to traverse short and longer distance cheaply and easily will reconfigure and flatten the bid/rent curve for urban land.  The historic siloing and zoning for singular uses are and will change.  The desire to live, work and be entertained in our cities will replace urban office corridors.  As our urban area house our museums, lively arts, diverse restaurants, sporting venues, and other kinetic, unstructured places, and will draw people back to cities, but it will take some difficult financial and municipal decisions to get there.  As fewer and fewer households include children under the age of 18, more of us are free to chose the places and spaces that we live.