The Paths and Characteristics of Real Estate Entrepreneurs
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The Paths and Characteristics of Real Estate Entrepreneurs by Michael Kazmierski B.S., Finance, 2006 Bentley College M.S., Finance, 2007 Bentley College Submitted to the Department of Architecture in Partial Fulfillment of the Requirements for the Degree of Master of Science in Real Estate Development at the Massachusetts Institute of Technology September, 2008 ©2008 Michael Kazmierski. All rights reserved The author hereby grants to MIT permission to reproduce and to distribute publicly paper and electronic copies of this thesis document in whole or in part in any medium now known or hereafter created. Signature of Author: ______________________________________________________ Department of Architecture July 31, 2008 Certified by: _____________________________________________________________ John F. Kennedy Lecturer Thesis Supervisor Accepted by: ____________________________________________________________ Brian A. Ciochetti Chairman, Interdepartmental Degree Program in Real Estate Development The Paths and Characteristics of Real Estate Entrepreneurs by Michael Kazmierski Submitted to the Department of Architecture on July 31, 2008 in Partial Fulfillment of the Requirements for the Degree of Master of Science in Real Estate Development ABSTRACT What paths have real estate entrepreneurs taken to establish their own firm? Also, what characteristics did they develop and utilize in the process? This thesis gives the unique opportunity to better understand the life of the real estate entrepreneur. Also, this thesis shall add clarity to these questions by providing case studies and analyses through reviewing such topics by obtaining information from face-to-face interviews of leaders and legends in the real estate industry. Included is a study on the general characteristics that are utilized by entrepreneurs and their importance. Also, studies on the application of these characteristics and their statistical significance are discussed. These characteristics have been reviewed to create a better understanding of the composition of the entrepreneur and how the application of these factors will help in entrepreneurial achievement. This framework will also help create a better understanding of the case studies and the paths the real estate entrepreneurs took to establish their firms. For the development of the case studies, 12 entrepreneurial leaders in the real estate industry were interviewed based on a framework of questions. From this information, a case study is created to obtain an understanding of their family background, education, experience, path and characteristics. Each case study will be accompanied by an analysis section discussing the important steps and characteristics that led to the development of the entrepreneur's career. These individuals represent a variety of fields in the real estate industry including development, construction, service, and finance. In review of the case studies and analyses, 5 distinct paths are found which have led to the preparation of being able to establish a real estate firm. Also, it is shown that no set group of characteristics is utilized by each real estate entrepreneur. Yet, each entrepreneur provides premier examples of these characteristics and gives insight to their application in the real estate industry. Thesis Supervisor: John F. Kennedy Title: Lecturer 2 Acknowledgments Special thanks to my parents, who helped instill in me the characteristics of persistence, hard work, and a desire for achievement which enabled me to be a part of this great institution. Incredible thanks to my mother who, with her countless hours of transcribing, made it possible to include as many entrepreneurs in this thesis. Thanks to all the interviewees, who were generous enough to set aside some of their precious time and were willing to open the door to their lives to give me a chance to understand the way they achieved greatness. Thanks to my thesis advisor, John F. Kennedy, who gave continual support, prompt responses, and new ideas throughout the process. Finally, great thanks to all the professors, lecturers and staff at the CRE that have been responsible for enriching my life and my passion for real estate. 3 TABLE OF CONTENTS Page Title Page…………………………………………………………………………….…...1 Abstract…………………………………………………………………………………...2 Acknowledgments………………………………………………………..……………….3 Table of contents………………………………………………………………………….4 Introduction……………………………………………………………………………….6 Chapter 1: Literature Review……………………………………………………………..8 Chapter 2: Pietro Doran, Chairman and Founder, Doran Capital Partners 2.1 Case Study……………………………………………………………………..…....20 2.2 Path and Characteristics Analysis……………………………………...……………29 Chapter 3: Dung-Kyu Choi, Chairman and Founder, Daebo Group 3.1 Case Study…………………………………………………………………….…….32 3.2 Path and Characteristics Analysis……………………………………...……………37 Chapter 4: Don Chiofaro, President and Founder, Chiofaro Companies 4.1 Case Study…………………………………………………………………………..40 4.2 Path and Characteristics Analysis…………………………………………...………51 Chapter 5: Ted Tye, Managing Partner and Co-Founder, National Development-Boston 5.1 Case Study…………………………………………………….…………………….54 5.2. Path and Characteristics Analysis……………………………………………...……64 Chapter 6: Jim Ansara, Chairman and Founder, Shawmut Design and Construction 6.1 Case Study……………………………………………………..……………………67 6.2 Path and Characteristics Analysis……………………………………………...……78 Chapter 7: Jon Davis, CEO and Founder, Davis Marcus Partners 7.1 Case Study…………………………………………………………………………..82 7.2 Path and Characteristics Analysis……………………………………...……………90 4 Chapter 8: Steve Karp, Chairman, CEO and Founder, New England Development 8.1 Case Study………………………………………………………………….……….92 8.2 Path and Characteristics Analysis……………………………………...……..……103 Chapter 9: Al Taubman, Founder, Taubman Centers 9.1 Case Study……………………………………………………………………...….106 9.2 Path and Characteristics Analysis………………………………………….....……115 Chapter 10: Ken Himmel, President, CEO, and Founder, Urban Related Development 10.1 Case Study…………………………………………………………………..……117 10.2 Path and Characteristics Analysis……………………………………………...…128 Chapter 11: Jerry Rappaport, President, CEO, and Founder, New Boston Fund 11.1 Case Study……………………………………………………………..…………131 11.2 Path and Characteristics Analysis……….……………………………...……...…144 Chapter 12: John B. Hynes III, CEO and Managing Partner, Gale International 12.1 Family History……...………………………………………….…………………147 12.2 Case Study……………………………….…………………………..………...…150 12.3 Path and Characteristics Analysis……….………………………...………...……163 Chapter 13: Joel Wilder, Founder, The Wilder Companies 13.1 Case Study…………………………………………………..……………………165 13.2 Path and Characteristics Analysis……….…………………………...…………...172 Chapter 14: Conclusion………………………………...……………………………….174 Path and Characteristics Exhibit…………………………………………..……………184 References...……………………………………………………….……………………185 5 Introduction What paths have real estate entrepreneurs taken to establish their own firms? Also, what characteristics did they develop and utilize in the process? A large amount of publications and literature has covered the characteristics of entrepreneurs. Furthermore, biographies and autobiographies of real estate entrepreneurs have covered their lives and scratched the surface of their real estate careers. Only a limited amount of entrepreneurs have already been reviewed. Each real estate entrepreneur provides a unique story and perspective through his career, and any additional insight would be highly beneficial to aspiring real estate entrepreneurs. The purpose of this thesis shall be to provide additional information through a variety of case studies created by interviews which will provide new information and insight into developers’ careers. This thesis offers the unique opportunity to better understand the life of the real estate entrepreneur. Also, this thesis shall add clarity to these questions by providing case studies and analyses by reviewing such topics through the interviews of leaders and legends in the real estate industry. Included is a study on the general characteristics that are utilized by entrepreneurs and their importance. Also, studies on the application of these characteristics and their statistical significance are discussed. These characteristics have been reviewed to create a better understanding of the composition of the entrepreneur and how the application of these factors will help in entrepreneurial achievement. This framework will also help create a better understanding of the case studies and the paths the real estate entrepreneurs followed to establish their firms. For the development of the case studies, 12 entrepreneurial leaders in the real estate industry were interviewed based on a framework of questions. From this information, a case study is created to obtain an understanding of their family background, education, experience, path and characteristics. Each case study will be accompanied by an analysis section discussing the important steps and characteristics that led to the development of 6 the entrepreneur's career. These individuals represent a variety of fields in the real estate industry including development, construction, service, and finance. In review of the case studies and analyses, 5 distinct paths are found which have led to the preparation of being able to establish a real estate firm. Also, it is shown that no set group of characteristics is utilized by each real estate entrepreneur. Yet, each entrepreneur provides premier examples of these characteristics and gives insight to their application