Case Study: Millegan Creek Apartments

The first real estate-specific course I took as a part of my MBA curriculum was Real Estate 710: Real Estate Finance and Investments. This class was, at that time, perhaps the most challenging course I could remember taking at the collegiate level. We were thrown into the thick of topics including the time value of money, mortgage math, and other financing topics. As someone who had one finance course as a part of my undergraduate studies, it was a big adjustment.

While the course was difficult, I found that it helped me learn the material more deeply. Real estate finance is the basis for most other real estate courses in program, so understanding these topics is incredibly important. I was also thankful for the instructor, who had just been hired by the department. He came to Wisconsin as an alum and a former analyst on Wall Street and REIT CFO.

The most engaging project our class had was a Harvard Business Case Study from 1994, titled “Millegan Creek Apartments” by William J. Poorvu and John H. Vogel Jr. Our instructor felt that although the case was dated, it would help us understand some of the basics behind debt financing and how banks determine whether or not to lend.

This was a group project, and my group felt that the bank should make the loans, based on demand factors of the Austin, Texas market and experience of the developer. In our report we summarize our findings and include financial analysis as a part of our conclusion.