Why B-Schools Should Teach Commercial Real Estate

As an industry that affects everyone on the planet, commercial real estate is an industry that should be taught in every business school.

Why B-Schools Should Teach Commercial Real Estate

CAN YOU NAME an asset class that touches the lives of every person in the world and has a global value of US$215 trillion—36 times larger than all the gold ever mined and considerably larger than all the traded equities and securitized debt instruments in the world economy? Wouldn’t you expect that asset class to be a topic that’s formally covered in most business school curricula?

Commercial real estate (CRE) is that asset class, and it’s continuing to grow in importance. In fact, CRE gained its own Global Industry Classification Standard (GICS) in September 2016, moving from its previous financial classification. Now that CRE has become one of the 11 classifications used by the global financial community, there could be explosive growth in the amount of investment capital moving into public real estate securities. It seems to me that an industry with so much scope and so much potential for growth should be taught at today’s business schools.

There are two additional reasons I think CRE should be part of every b-school curriculum. First, CRE surrounds us as we live, work, and play; it contributes to the collective well-being of society. The design and thoughtful development of the “built environment” can enhance employee productivity, create communities, and provide improvements in quality of life for all parts of the socioeconomic spectrum.

Second, commercial real estate accounts for up to 40 percent of greenhouse gas emissions, and it creates environmental impacts in areas such as stormwater management. As we expand our built environment through CRE, we need to make sure not only that our buildings are functional, but that their negative consequences are minimized. Global climate change is one of the “wicked problems” facing governments and policymakers around the world, and I believe that an industry that has a profound impact on the environment should be studied at today’s business schools. However, today CRE can be found as an area of emphasis in only a handful of business programs.


While elements of CRE are taught at business schools, and within other academic units at the university, they’re often separated into the formal silos of engineering, urban planning, construction management, architecture, economics, and business. It’s important for students to gain functional excellence in these areas, but I think it’s equally important for CRE education to break out of these silos and be taught in an interdisciplinary approach that emphasizes how each individual function interacts with all the others.

At the Villanova School of Business, we take just such an interdisciplinary approach to teaching CRE. Students choose a traditional major, then co-major in real estate. We offer four core real estate classes: law, investments, modeling, and development. Students also select electives in their chosen fields that combine their major and real estate topics. For instance, the finance elective focuses on real estate capital markets; it considers the perspective of buy-side investors in public real estate markets. The accounting elective, accounting for real estate investments, is taught by partners at one of the Big Four accounting firms. The courses are designed to appeal to all types of business majors so we can bring a diversity of disciplines in the classroom.

In the future, we hope to make the interdisciplinary aspects of our program even broader. At Villanova’s Daniel M. DiLella Center for Real Estate, we are working to develop cross-college curricula that will bring in an even wider range of perspectives to enhance student learning.


Many b-school administrators will feel that they don’t have room in their curricula to add a CRE focus, but I believe academic change is possible, even though it might be difficult. One way to integrate a CRE emphasis into the program is to start small, perhaps by offering an introductory class in real estate. Before we even had a real estate minor at VSB, we offered classes that were developed and taught with the cooperation of real estate professionals. Demand was so high that we developed the minor, and then the co-major.

Global climate change is one of the “wicked problems” facing governments around the world, and I believe that an industry that has a profound impact on the environment should be studied at today’s business schools.

We’ve also found it essential to bring in real-world perspectives by providing our students access to real estate professionals both inside and outside the classroom. Almost all of our classes are taught by faculty with extensive practical experience in their subject areas. Because they have industry ties, they can bring in guest speakers and offer students access to current cases. Outside of the classroom, we bring students together with professionals through an annual career conference and a mentor program. In addition, we offer students the opportunity to compete in global case competitions, one of which we host.

If schools want guidance on what kinds of programs the market needs, they could seek input from the government and industry partners that will employ tomorrow’s graduates. They also could work with academic organizations such as the American Real Estate Society (ARES) and the American Real Estate and Urban Economic Association (AREUEA) and with government and industry organizations such as the Urban Land Institute (ULI). We’ve participated on panels and committees for these organizations, shared our experiences, and learned from others.

By following these steps, other schools can adapt and improve on programs such as ours as they add CRE to their own programs. The built environment plays a huge role in the day-to-day lives of everyone in the world, and it will have an immense global impact in the coming decades. Business schools must nurture and train industry leaders who understand CRE in the context of both their own functional areas and the breadth and reach of the decisions they will make.

Shawn Howton is faculty director of the Daniel M. DiLella Center for Real Estate and professor of finance at the Villanova School of Business in Pennsylvania.

This article appeared in print in the March/April 2017 issue.