A chance call from an employment agency led Alice Connell to a career at TIAA-CREF.
TIAA-CREF traces its antecedents to the Teachers Insurance and Annuity Association of America, which the Carnegie Foundation formed in 1918 as a life insurance and retirement plan for college professors and employees. Today, with a portfolio of $380 billion, TIAA-CREF is a leading financial services organization and provider of retirement services in the academic, research, medical, and cultural fields. It also is a leading real estate lender and investor, with a $67 billion portfolio that includes over $25 billion in commercial mortgages, almost $20 billion in commercial mortgage–backed securities, and over $20 billion in real estate equities.
Alice Connell is a managing director at TIAA-CREF and the head of the portfolio strategy and management team. As such, she oversees the investment strategy for the organization’s $25 billion commercial mortgage portfolio and is responsible for crafting the annual debt strategy. She is chair of the commercial mortgage team’s pricing meeting and has an integral role in all transactional approvals. Connell also is head of TIAA’s real estate fund portfolio, directing acquisitions and portfolio management for all domestic, international, and global funds.
Throughout her career, Connell has been involved in commercial mortgage lending, in property acquisitions—both domestic and international—and with public and private clients.
She is a trustee of the Urban Land Institute, founder and immediate past chair of the ULI New York district council, former board member of WX, and former member of the Real Estate Advisory Committee of Harvard University’s Graduate School of Design. She currently sits on the board of directors of the Pension Real Estate Association, is an executive committee member of the Zell-Lurie Real Estate Center at the Wharton School at the University of Pennsylvania, and is a member of the International Real Estate Advisory Board of EuroHypo AG.
In an interview with writer James Carberry, Connell talked about her career, career opportunities at TIAA-CREF, and the opportunities for young people starting out in real estate today. Carberry collaborated with Stan Ross, chair of the board of the University of Southern California’s Lusk Center for Real Estate, in writing The Inside Track to Careers in Real Estate, recently published by the Urban Land Institute.
You have undergraduate and graduate degrees in history. How did you wind up in real estate?
By chance, just like many of my peers. While I was in college, I enjoyed the academic life and thought of a career in academia. I also considered law school. But after I finished grad school, I thought it appropriate to join the workforce, if only until I decided my next academic direction. I applied to a variety of employment agencies. They must have associated me with higher education, because one day I received a call from someone at an employment agency. He said, “I have a job for you with a college pension fund.” It was TIAA-CREF.
What was your position when you started?
Mortgage analyst. At the time, the company was focused on mortgage lending. I and others starting as analysts learned how to evaluate the opportunities and risks in mortgage lending, to analyze assets and their functionality, and, most important, how to analyze people. We spent a lot of time evaluating prospective borrowers. It was great on-the-job training.
Where would a college graduate start with your company today?
We recently started a program to recruit and hire individuals with undergraduate degrees, and four undergraduates have recently joined our commercial mortgage team. An undergraduate starts as an analyst. The difference today compared with when I was starting out is that the company’s portfolio is much broader, covering both equity acquisitions as well as debt financing, and public and private real estate companies. Today, an analyst has much wider exposure to all facets of the real estate industry; they have greater opportunity to take on more responsibility quite quickly. TIAA-CREF is a low-cost financial services provider, and that translates into our staffing, which is rather lean. Even our junior analysts, while doing basic analytical work, will soon find themselves moving into more richly textured work, becoming part of a team that negotiates debt or equity transactions and goes into the field to look at transactional opportunities.
Where would an MBA graduate start?
It depends on their background. Our MBAs usually have several years of real estate experience and they join us as associates. One came in as an associate director, a more senior position.
How do the responsibilities of an associate differ from those of an analyst?
It’s mainly a question of degree. Associates would join teams sooner and be given more responsibility earlier. They would have a higher degree of independence in analyzing transactions compared with analysts, who would be mentored by someone on our staff.
In hiring undergraduates, do you have a preference as to their majors or degrees?
You’re speaking with someone who has two degrees in history, so I have a bias! Actually, we don’t give preference to one degree versus another. We do like to see individuals who have had some exposure to economics. We also look at their extracurricular activities and job experience. Was a student interested enough in real estate to join a real estate club on campus, or work during the summers in real estate–related fields? We also look for broader personal attributes such as good communication, interpersonal, and critical-thinking skills.
Where do you see the opportunities for someone starting out in real estate today?
Development of traditional properties such as office buildings is expected to slow, and so will the need for financing of these properties. But there will be great activity in real estate sectors that address large-scale, transformational changes, such as changes in demographic patterns. The aging of the baby boomers, for example, will create more demand for such properties as second homes, golf course communities, resort hotels, entertainment centers, etc. There also will be a continuing shift in population to fast-growing communities in the South and West, and a consequent increase in real estate demand in those areas. So young people starting out today should look at demographic and other trends that will affect the real estate industry and think about what real estate product areas they want to work in, where they want to work, and in what sectors they want to become expert.
What type of company should people think about joining?
On the finance side, you really want to go with an exceptionally strong, highly regarded organization that has the reputation of recruiting and developing top professional talent. I’m partial, of course, but our company does have a unique platform, with high-quality assets and strong relationships with best-of-class developers/owners. For the entering analyst, it’s a unique opportunity to gain broad exposure to the real estate industry through a company committed to best practices.
What opportunities will people have to work globally?
It’s inevitable that our company, and real estate companies generally, will increasingly focus more on the global market. Two-thirds of the commercial real estate universe is located outside the United States. TIAA-CREF already has about 20 percent of its stocks, bonds, real estate, and other assets outside the United States, and we expect to continue expanding in international markets. If you’re a young person with expertise in finance and/or real estate development, it’s likely that at some point in your career you will find yourself working on equity and/or debt capital transactions in Europe, Asia, or Latin America. You will have a global palette with which to work. It’s a very exciting time to be in real estate.