| The REC Welcomes New Sustaining Sponsor: Park National Bank |
Park National Bank, based in Chicago, recently joined The Real Estate Center's elite group of sustaining sponsors. Park National is a high performing, financially strong full service commercial bank with $3.9 billion in assets. Park National is owned by Oak Park based FBOP Corporation. FBOP Corporation, through its family of financial institutions, has total assets exceeding $14 billion.
In January 2006 five local banks (Cosmopolitan, Regency Savings, First Bank of Oak Park, Pullman, and Park National) merged to create Park National Bank. Since the merger Park National, through its 30 branch network, has become a growing presence in the Chicagoland market offering exceptional service with its wide array of loan, deposit and trust services.
Park National has distinct expertise in Commercial Real Estate lending. The Bank's Chicago and National Commercial Real Estate Groups are active in project finance, bridge and stabilized loans ranging from $1 million to well over $200 million.
 Park National's two senior Commercial Real Estate executives are DePaul University graduates. Jon Gilfillan, SVP, who holds BS and MBA degrees, manages the Bank's Chicago Commercial Real Estate Group. He
has been active with The Real Estate Center for the last four years as a guest lecturer covering development financing.
Terry Rosenberger, EVP who has a MBA degree from
DePaul, manages the Bank's National Commercial Real Estate Group. |
| Moral Hazard & Adverse Selection for Subprime Lending & Securitization--Priced or not Priced? |
Professor Jim Shilling recently wrote a paper on subprime lending that addresses two puzzles. First, why has subprime lending in the US been so contentious, and why now? After all, subprime lending in the US has been going strong for the last ten years, rising from 10% of originations in 1997 to 23% in 2007. The second puzzle has to do with whether efficient markets theory holds in the pricing of subprime mortgages.
Clearly having an understanding as to how subprime mortgages are funded is the first step in explaining why the crisis has occurred, and why now. Initially, once a subprime mortgage was originated, it was typically pooled and sold to secondary market investors in the form of an asset-backed security (ABS), with the originator keeping the first-loss piece, exactly as the theory would predict.
The market has since evolved greatly. Once subprime mortgages are now originated, the loans are typically pooled and sold to secondary market investors in the form of an ABS, but the first-loss piece is no longer necessarily kept by the originator. Instead, this piece is typically pooled and sold to secondary market investors in the form of a collateralized debt obligation (CDO), sometimes with a credit default swap and sometimes without. However, the process does not stop here. Next, the lowest priority tranches of these CDOs are usually re-packaged into yet another CDO, and then sold again.
This process of securitization has allowed the underlying subprime mortgage loan cash flows to be apportioned to investors with more congruent risk preferences. But, as the originator's first-loss risk exposure has declined, the risk of moral hazard and adverse selection has increased. This explains why so many loans that should have never been originated were originated, and why there appears to be tiering in the pricing of subprime ABS securities.
If you would like to read the entire paper, please contact Kathleen O'Hare at kohare@depaul.edu. |
| Student Real Estate Organization Winter Speaker Series |
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 DePaul's student Real Estate Organization hosted two speaker events, the first featuring Sam Delisi of C.B. Richard Ellis (CBRE). As Managing Director Asset Services of the Eastern region of the U. S., Mr. Delisi is responsible for delivering the CBRE Asset Services platform to approximately 210 million square feet of office, retail, and industrial real estate. An alum of DePaul University, Mr. Delisi spoke to MBA and undergraduate students about the different career opportunities in real estate as well as the wide array of services CBRE offers its clients. Mr. Delisi's presentation also included a case study from a recent deal involving the disposition of Equity Offices property portfolio.
The second speaker event, which brought record  attendance, featured Mary Ludgin of Heitman. Ms. Ludgin spoke to students about Heitman and her responsibilities as Managing Director and Director of Investment Research. She also outlined a current deal and shared some of her experiences in Chicago's real estate industry.
DePaul's Real Estate Organization will be kicking off its spring speaker series on April 16th with a company presentation by Builders of Chicago.
For more information about REO and our events please visit www.reodpu.org. |
| Spring Continuing Education Course |
COMMERCIAL & INDUSTRIAL LEASES
Instructor: Jana L. Langston, Principal, 
Date/Time: April 17, 2008
9:00am-5:00pm
Fee: $300
Registration closes April 11th. Day of registrations will not be taken.
Course Description
This course demystifies issues affecting both landlords and tenants as it walks you through the financial, managerial and legal implications of office, industrial and retail leases.
Previous participants have said:
- "There is so much information covered in this course, but it's tempered with real world experience/information so it isn't overwhelming."
- "One of the best parts of this course was taking a close look at actual leases to get a better understanding of each category in the types of leases and what the language actually means."
- "This instructor brought much life-experience to the class--much appreciated!!"
To register, please email Olinda Rios at orios@depaul.edu. |
| Annual Collegiate Real Estate Conference: April 4, 2008 |
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At this year's Collegiate Real Estate Conference, over thirty Chicago real estate experts representing all aspects of the real estate industry will speak to students from several midwestern universities about careers in real estate. The event features six panel discussions, offered three times over the course of the afternoon, so that students can get a broad selection of highlights of various careers in the industry. A networking reception will follow the event so that students can interact directly with the panelists.
Participating Schools:
DePaul University, Indiana University, University of Illinois at Urbana-Champaign, John Marshall Law School, Northwestern University, University of Cincinnati, University of Iowa, and Marquette University.
DePaul Real Estate Students can register with Olinda Rios at orios@depaul.edu. The registration fee is $15. | |
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| Calendar of Events |
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User Decision Analysis
April 4
Collegiate Real Estate Conferece
April 17
CPE Course: Commercial & Industrial Leases
April 21-25
June 9-13
Market Analysis | |
| Endowment Donors |
| Douglas & Cynthia Crocker
George L. Ruff
Michael J. Horne Education & Healthcare Assistance Foundation |
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