Michael Golden is still a grad student at the University of Denver until June, when he will collect his MBA in real estate and finance. But the 26-year-old from Winnipeg, Canada, could easily be a teacher, sharing the lessons absorbed while parlaying a $5 million commercial real estate investment into a portfolio worth $35 million.
Still, he's not given to boasting. Not until the close of a conversation does he mention that he's got to pack and head to Omaha. Why Omaha? He's off to meet Warren Buffett — yes, the Warren Buffett, chairman of Berkshire Hathaway, and legendary American investor.
And by the way, he's met Buffett before, after winning an academic contest at the university's Daniels College of Business. “We had to write three questions we would ask Warren Buffett if we were alone with him for an hour.”
The two hit it off, and billionaire Buffett invited the real estate student back for Berkshire Hathaway's April 30 shareholders meeting.
Golden has made his own career opportunities. He knows that becoming an entrepreneur is one way to avoid a harsh job market that has stranded many members of the Class of 2011. The commercial real estate industry's slow recovery from the devastating recession and global credit crisis has left many prospective grads at prestigious real estate programs waiting for offers or accepting positions in fields other than their specialty.
Still, some schools report that the job market for new grads is improving. “I think everyone feels that we've passed through the real estate bottom, and we've started moving up,” says Stephen Bell, associate director of The Real Estate Center at DePaul University in.
Investors need analysts
From September 2010, when classes started, until late April, Bell counted 76 job opportunities for real estate students, compared with 36 in the same period a year earlier. “The opportunities have doubled,” he says.
At DePaul, 95 graduate students and 44 undergrads are enrolled in the real estate program. About half the graduate students will complete their studies this year.
“We're seeing a number of real estate investors looking in the marketplace for good. They need young people to help them analyze the deals,” says Bell. In addition, the brokerage CB Richard Ellis just hired one student, he notes. “The only place where we haven't seen any activity is in development, and I think it's going to be a while before we start seeing that.”
When it comes to real estate jobs, the real growth is overseas, says Mark Levine, director of the Burns School of Real Estate and Construction Management at the University of Denver. “There are wonderful opportunities internationally. Obviously the BRIC countries (Brazil, Russia, India, and China) are growing. But there's no question that in the United States we're still slow.”
Go East, young grad
Many Denver real estate grads are finding jobs in China, says Levine. “I've led a number of groups there. We just had a China symposium here in Denver.” With a 1.3 billion population and annual GDP growth surpassing 9%, compared with 1.8% in the U.S. as of the first quarter of 2011, China is poised for development.
Major cities are swelling in size, a pattern mirrored in India and other Asian nations. Multifamily housing is in great demand, says Levine. “They're saying, ‘We don't need 1,000 units. We need thousands and thousands of units.’”
But Michael Golden is not bound for Asia. The young Canadian wants to stay in Denver, if he can secure a green card. “I'm going to keep pursuing my entrepreneurial dreams. I've got my property up in Canada, some industrial as well as retail and multifamily, and I'm going to begin actively investing in this market.”
Apartment vacancy rates are hovering around 5%, he says. “I'll be competing for larger units against some big institutional players, because Denver looks very attractive. There's a very good quality of life. So that's going to be my strategy, and maybe I'll look for some distressed assets in good locations that have good potential to be turned around in a strong market.”
The key to leasing up an industrial, retail or office space, he says, is understanding the tenant, including the logistics and capital behind the users' business. “Once you begin to study and understand the market and understand the user's business, you'll be much more successful in acquiring tenants.”
He comes from an entrepreneurial family. His dad operated various businesses, including a deli and pinball arcade. At age 3, when the family ran a banquet hall, Michael carried out plates while his mom ironed tablecloths. “I grew up with a hard-work ethic,” he says. Underlying the succession of businesses was always the real estate. His dad bought the property. “He'd have the property appreciation in the end.”
Rolling up his sleeves
At 17, Golden started his own enterprises. He became a wedding planner, opened a karaoke bar and ran a vending company. Then he bought two brownfield sites, one a former leather tannery, and the other a cement factory. “I've acquired almost 400,000 sq. ft., personally. That's clear title, with no debt, that I own, as well as about 150 acres of land.”
It wasn't easy transforming the 158,000 sq. ft. tannery. “When I took it over, it had big vats, and big drums full of acid where they used to turn the hides for the leather,” says Golden.
The property also had serious environmental problems. “With hard work and a good crew, we went in there. We basically sandblasted and power-washed the entire inside of the building and repainted it, put in all new electrical and plumbing,” he recalls.
“It was three years of hard work and very low cash flow,” but now the transformed tannery and cement plant sites have new tenants.
Fresh possibilities abound in Denver, even as his investments thrive. “IKEA just announced it's building 1 million sq. ft. directly adjacent to our site,” in Winnipeg, says Golden. “So there's going to be a lot of opportunity.”
— Denise Kalette is managing editor.