UCLA Anderson School of Management Blog

The Purpose Economy

UCLA Anderson students and staff collaborated to produce Impact Week. Back row, left to right: [email protected] program manager Kelly Chung, Karthik Patange (’18), Qingqing Wu (’18), Katie Donovan (’18), [email protected] director Bhavna Sivanand (’14); front row, left to right: Janna Stucky (’19), Elizabeth Heredia (’19), Jessica Lin (’18), Molly Tarrant (’19)

---

By Carolyn Gray Anderson

[email protected] and the award-winning UCLA Anderson Net Impact chapter presented Anderson’s 2018 Impact Week in April. Under the theme Purpose + Profit, invited thought leaders and company founders shared stories about mission-driven careers, businesses and projects that fulfill unmet needs in sectors from entertainment to real estate.

Impact Week attracted members of the greater UCLA and Los Angeles communities to engage with Anderson students, alumni, faculty and staff in interactive panels and workshops tackling topics that included impact investing, affordable housing, blockchain technology and finding purpose in traditional workplaces.

The week kicked off with a keynote address by Cara Chacon, VP of social and environmental responsibility at outdoor clothing retailer Patagonia. The privately held company is on its way to a 100 percent climate-neutral goal by nurturing a squeaky-clean supply chain that accounts for everything from healthy soil for regenerative organic agriculture to fair wages for a healthy community (and therapeutic surfing breaks for Ventura-based staff). “A responsible business model works,” said Chacon. The proof? Patagonia recently reached $1 billion in revenue.

For-Purpose Profits: UCLA Anderson Drives Change During Impact Week

[email protected] and the UCLA Anderson Net Impact chapter present Anderson’s annual Impact Week, April 9–13, 2018. Under the theme Purpose + Profit, invited thought leaders and founders of mission-driven companies explain how they are shaping the future of business through the creation of a social, environmental and economic evolution. They share their insights in workshops, panels and a networking mixer open to the campus community and the wider public.

Jessica Lin (’18) and Karthik Patange (’18), both VPs of Impact Week and UCLA Anderson’s Net Impact chapter, which won NI Graduate Chapter of the Year in 2017, are spearheading Impact Week. As purpose-driven MBA candidates, they hope their peers will be inspired to build service and the greater good into their plans for profitable careers.

---

Q: As Impact Week comes together, where do you anticipate MBA students and alumni will find particular value?

Karthik Patange: The technology theme will be prominent during Impact Week. We live in a world where tech governs everything, including our future careers. However, it’s hard for some to envision how tech and social purpose come together unless it’s through the traditional CSR “add-on.” This year, Impact Week delves into blockchain, social media and education through computer science. We hope to show MBA students that they can make an impact within their tech roles, and not as a peripheral initiative of their companies.

Jessica Lin: We wanted to highlight a variety of industries in which profitable companies also have meaningful impact. I expect that representatives from the big name companies, such as Patagonia, Google and BuzzFeed, will help expand people’s knowledge of and interest in having impactful careers.

KP: Definitely. I hope students understand that big companies with big business practices can also cater to big purposes, and that this mindset can shape their individual careers.

Q: What is the role of social media in realizing the “purpose + profit” goal?

KP: Social media directly influences social impact. Online social networks are outlets for individuals to be outspoken about their purposeful initiatives and generate awareness. How is the business side supporting this interest, especially in today’s always-online climate? From simple knowledge sharing to how to use data for social good to spreading the word on the human condition in other parts of the world, social media networks can support purpose in a sustainable and profitable way.

UCLA Ziman Center's Richard S. Ziman: "To Succeed in Life is about Making a Difference"

 

Real estate investor, corporate executive and philanthropist Richard S. Ziman doesn’t hesitate when asked why he has contributed so much time, energy, leadership and financial support to the UCLA Anderson School of Management.

“To succeed in life is not just about having the biggest and most successful business endeavors,” Ziman said recently while standing outside the real estate center that bears his name. “To succeed in life is about making a difference, whether it’s in business or in philanthropy, and especially in education.”

Indeed, for almost 50 years, philanthropy has been a big part of Ziman’s life. “I started giving back through involvement and then financially, even before I could afford to,” he said, “because making a difference is as important to me as my job.” He turned his attention to UCLA Anderson School of Management in the 1990s. After being approached by John Anderson (with help from fellow real estate leaders Gene Rosenfeld and John Long), he established and endowed the UCLA Ziman Center for Real Estate at the Anderson Graduate School of Management in 2001. He now serves on both the Ziman Center’s and UCLA Anderson’s boards of advisors.

Retail: Survival of the Fittest

By DJ Busch

Retail as we know it is going through a dramatic shift, and the negative narrative is loud as ever. Consumer behavior is changing, retailers are trying desperately to compete and owners of retail real estate are working to ensure their properties are positioned for the future. But not all the news is bad. Some landlords should be positioned not just to survive, but to do quite well.

In the public market, mall REITs have been trading at large discounts to the underlying value of their assets for quite some time. This investor skepticism has spilled over to open-air shopping centers (strip centers), which are now also trading at discounts. While mall REITs own 80 percent of mall value in the U.S., these signals from the public market can have important, and often overlooked, implications for private market players. It’s no secret that the U.S. is over-retailed, and we have a substantial amount more square feet per capita than any other country.

Alumna Esther Torrez Went from Farming to Finance to Building “Forever Families”

---

National Hispanic Heritage Month runs from September 15 through October 15. UCLA Anderson, in conjunction with the Anderson Latino Management Association and the UCLA campus, recognizes the significant contributions to society among our Latino and Hispanic students, alumni, staff and faculty. Visit [email protected] to enjoy their stories.

---

By Jill Hisey (B.A.’87, ’95) and Carolyn Gray Anderson

Esther Torrez (’82) looks at the shifting financial landscape in much the same way a farmer might regard the agricultural landscape. “Sometimes, you plant a crop,” she says, “and weather destroys the entire crop. Your entire financial livelihood is gone.” Make-or-break solutions to securing a livelihood — whether they come in the form of an advanced education or answers to the problem of homelessness among teens exiting the foster system — form the leitmotif of Torrez’ career.

Torrez grew up in California’s San Joaquin Valley, the granddaughter of a man who immigrated to the U.S. from Mexico to work the land around Tulare, raising cotton, rice and cattle. He taught himself math and reading and advanced to management in agriculture. His granddaughter, in her turn, helped her migrant classmates in elementary school learn English. Her dream since the first grade was to become a teacher.

Earning a bachelor’s degree from Fresno State, and a Master of Psychology from California State University, Bakersfield, Torrez became the teacher she dreamed of being and, later, dean of girls at Pioneer Junior High in Porterville. She was recruited away to become an associate professor of psychology and sociology at Bakersfield College, where she also served as a counselor. Eventually, though, Torrez wanted to expand her knowledge of the business world, and she applied to what was then UCLA’s Graduate School of Management.

UCLA Anderson Forecast: Is a Recession in Sight?

UCLA Anderson Forecast anticipates continued modest growth in its second quarter report. Edward Leamer, UCLA Anderson Forecast director, took a deep dive in an accompanying essay into the state of the nation’s economy, offering advice about the three critical forecasting questions: (1) Is the risk of recession elevated? (Answer: No.) (2) Can President Donald Trump make America great again in the sense of getting GDP growth back up to 3% after seven years of 2%? (Answer: Not likely.) (3) Are inflation and interest rates likely to jump up soon? (Answer: That’s hard to say.)

In his essay “Three Things to Worry About,” Leamer indicates that the president and Congress need “to figure out how to get us back into the 3% corridor, or better yet, make America great again by turning the clock back to 1960 when the growth rate was 4.8%.” Those efforts are critical to keep and support programs such as Medicare and Social Security. “A more rapidly growing economy would produce greater tax revenues and would help a lot with the burden of taking care of our elderly.”

Although the country is currently experiencing its 32nd quarter of expansion, “This current expansion has had the mildest rate of growth of any U.S. expansion in the data set,” Leamer writes. A number of factors contribute to the slow rate of growth, including the decline in manufacturing jobs, a weaker auto sector, decline in the growth rate of the working population and in total hours worked, as well as a productivity growth rate of only 0.5% since the Great Depression.

Moving Forward: Can We Solve L.A.’s Housing Affordability Problem?

Photo: Owen CL, Unsplash.com

---

By Carolyn Gray Anderson

Last March, Los Angeles voters rejected proposed limits on the construction of large-scale buildings, limits that included a two-year moratorium on development of dense, high-rise residential properties. In a city where working-class and middle-income households are increasingly forced to prioritize housing costs over medical care, food and even transportation, it was a decisive defeat for ballot Measure S. But will augmenting the pace and quantity of available dwellings really make living here more affordable for anyone but the super rich?

The UCLA Ziman Center for Real Estate studies the problem of housing affordability as it reaches crisis levels in California. The constraints are especially acute locally because although there is an immense amount of wealth concentrated in L.A. and land values are extremely high, ours is a very expensive city with no real wage growth within the working class.

Ziman partners regularly with the nonprofit Mercy Housing to organize symposia on topics germane to professionals in real estate, government and industry — but with a crucial public education component consistent with the mission of Ziman’s Howard and Irene Levine Program in Housing and Social Responsibility to promote the kind of dialogue that improves society in all economic sectors. Mercy Housing is a national nonprofit organization that provides affordable housing and supportive programs in 41 states to improve the economic status of residents, revitalize neighborhoods and stabilize lives.

Left to right: Paul Ong, Ann Sewill, Doug Shoemaker, Ben Metcalf, Ben Besley, Kevin Ratner

UCLA Wins 19th Annual NAIOP SoCal Real Estate Challenge with Creative Proposal for City of Inglewood

 

Hoisting the Silver Shovel (left to right), Daniel Gates, Scotty Weber, Nora Collins, Joseph Pfeiffer, Alyssa Koehn

---

Contributed by UCLA Ziman Center for Real Estate

A multidisciplinary team of UCLA graduate students won the 2016 NAIOP SoCal Real Estate Challenge held on November 17 at Carnesale Commons on the UCLA campus against formidable rival USC. Claiming the coveted Silver Shovel, the UCLA team consisted of second-year (Class of 2017) UCLA Anderson MBA students Joseph M. Pfeiffer, Scotty Weber, Nora K. Collins and Daniel Q. Gates, and UCLA School of the Arts and Architecture student Alyssa Koehn (M.Arch. ’17).

The annual event, sponsored by the National Association of Industrial and Office Properties (NAIOP), presents a specific real estate case challenge to a team of students at UCLA and USC. In addition to providing a rich learning experience that requires participating students to produce high-quality professional work within a limited timeframe, the competition is designed to showcase the talents and creativity of the next generation of real estate professionals.

This year, the Challenge involved a 5.07-acre parcel of land located at 10126 Prairie Avenue in Inglewood. The site, which is owned by the City of Inglewood, is adjacent to City of Champions redevelopment site, which includes the new NFL stadium for the Los Angeles Rams, a casino, 800,000 square feet of office development, 2,900 residential units, a 300-room hotel and park space. The teams were challenged to create and present the highest and best use for redevelopment of the site.

UCLA Anderson Economic Forecast: Slowly, Steady Growth Continues

 

The UCLA Anderson quarterly economic forecast conference takes place on June 8 at UCLA. Peter Lowy, co-CEO of Westfield Corp., will deliver the keynote address.

Will the Commercial Real Estate Boom Continue?

Commercial real estate prices have more than doubled since the financial crisis lows of 2009, and in many cities the skyline is dotted with construction cranes. Similarly, multi-family housing has been on a tear with rent growth outstripping income growth for most of the current decade, making affordability a political issue. The critical questions professionals will be asking at this quarter’s UCLA Anderson Forecast conference concern whether or not these trends will continue — or if the bull market is over.

All the Anderson economists’ reports will be presented at UCLA Anderson Forecast’s quarterly conference, which features a number of panels focused on commercial real estate and Peter Lowy's keynote address.

The National Forecast

In his Forecast essay for the nation, UCLA Anderson Forecast Director Ed Leamer takes a deep dive into the factors driving the current U.S. economy, one that has been growing steadily at 2% following quarterly growth rates of 3% for the 40 years between 1965 and 2005. Leamer writes that growth since 2010 has been so eerily steady that it is defining an entirely new corridor at 2% instead of 3%. “Something is different, terribly different. What should forecasters be thinking?” Leamer asks. “We are thinking 1.7% real GDP growth in 2016, 2.8% in 2017 and 2.1% in 2018, averaging 2.2, with a strong labor market averaging about 200,000 increases in payrolls per month and a steady unemployment rate around 5%. More of the same, in other words. We are starting to see more evidence of inflation ahead, and are forecasting interest rate increases to keep real rates of interest pretty constant.”

The Coming Transformation of South L.A. and Inglewood

By Tim Kawahara, Executive Director, UCLA Ziman Center for Real Estate

At long the last, the NFL is back in Los Angeles. A new $1.86 billion, 80,000-seat stadium and 6,000-seat performance venue is currently under construction in the City of Inglewood. The stadium will serve as home to the Rams, and possibly a second NFL team in the near future. These are the stories grabbing the headlines, but the NFL’s return to Los Angeles is just part of a larger economic revitalization effort underway in Inglewood.

The stadium is part of the City of Champions Revitalization Project, a massive 298-acre mixed-used real estate development which includes retail, office, residential, hotel, and park space. The development is being built on the former site of the Hollywood Racetrack and Casino, the largest parcel of undeveloped land in the greater Los Angeles area. The development is a joint venture of San Francisco-based Stockbridge Capital and Missouri-based The Kroenke Group under the entity Hollywood Park Land Company.

Projects of this magnitude have the potential to be economic catalysts for communities in which they rise. And, Inglewood, a city of 110,000 residents, is in desperate need of revitalization. It suffered through the 1992 riots, the recession of the late 80’s, and the Great Recession. With a deficit of $18 million, the city was on the brink of bankruptcy just months ago, and the school district was taken over by the state for financial and performance issues. In popular culture, Inglewood has a long-held reputation as a rundown crime-ridden city.