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  • Writer's pictureAri Betof

Rubacha’s Gift - $30M to Create the Real Estate Solutions of the Future

Paul Rubacha has gifted[A1] University $30 million to create a new real estate department. The co-founder of Ashley Capital, who earned his MBA from Cornell in 1973, is quick to credit his time at the university for his success. He also acknowledges the late John Reps, professor emeritus and former chair of the Department of City and Regional Planning, as playing an influential role in his early career. Going on to found one of the largest privately held industrial real estate investment firms in America, Rubacha hopes his donation will enable future Cornell students to make similar contributions to the industry.

The Paul Rubacha Department of Real Estate will be managed by the College of Architecture, Art, and Planning and the Cornell SC Johnson College of Business. Cornell’s two-year Baker Program in Real Estate is rated as one of the East Coast's top real estate master's programs. The new department will expand and enhance the program to integrate finance, development, and the built environment.

Formally combining these disciplines will create a thoughtful real-estate education unlike any other program in the country—one that’s as focused on design and development as it is on the balance sheet,” according to Provost Michael I. Kotlikoff.

While the Baker Program will form the primary master’s program for the new department, further programs will be added in time. These will include a research-focused master's/PhD, as well as collaborations with Cornell colleges in Ithaca and New York City. Administrators say the new department will help address emerging priorities through innovative cross-disciplinary networks, research, and more adaptive programs.

Rubacha’s Recipe for Success - Acquire, Develop, Renovate

After leaving Cornell, Mr. Rubacha went on to serve in senior capacities within the real estate divisions of Goldman Sachs, Citibank, and Prudential Insurance Company. In the 1980s, the migration of US manufacturing activities to Asia created what became known as the Rust Belt—a band of hard-hit states including Ohio, Michigan, Minnesota, and Indiana that were faced with high unemployment and depressed regional economies. Rubacha and his partner Rick Morton saw potential in the outdated warehouses that distressed landlords were trying to offload.

They founded Ashley Capital in 1984, and their first redevelopment project was a 12-building warehouse complex in South Chicago. At the time of acquisition, the 2-million-square-foot site had less than 50 percent occupancy. Still, Rubacha assessed the buildings as functional. In addition, he achieved high cash flows by using a creative financing approach that utilized a tax abatement, part of a tax deferral program. Following the upgrades, the improved tenant experience resulted in an increased occupancy rate of 93 percent.

This first deal helped establish strong relationships with partners and clients, driving subsequent deal flow. Today, the New York-headquartered Ashley Capital has offices in Atlanta, Chicago, Detroit, Grand Rapids, and Norfolk. It continues pursuing opportunistic investments and creating value by acquiring and redeveloping underperforming industrial and office properties. In addition, it offers advisory services to corporations, financial institutions, and tax-exempt investors on asset enhancement and repositioning. Its current 25-million-square-foot portfolio is concentrated throughout the Eastern United States. As principal, Mr. Rubacha is primarily responsible for financing and capital transactions.

Enduring Ties with Cornell

Mr. Rubacha serves on Cornell’s College of Architecture Advisory Board and is chair of the Baker Real Estate Advisory Board. He is the former co-chair of the Real Estate Subcommittee of Cornell’s Investment Committee and has been a guest lecturer and panelist for the university for nearly 35 years. In addition, he has lectured at several other universities and served as a panelist for various organizations, including the Urban Land Institute, the US Department of Transportation, and Institutional Investor magazine.

Funds Will Be Used to Hire Faculty and Encourage Further Gifts

In 2021 the Baker Program produced 31 real estate MBA graduates, 96 percent of whom were offered employment at an average base salary of $90,769. The new Paul Rubacha Department of Real Estate is expected to attract more MBA students interested in attending Cornell to study real estate. Funds will also be used to add dedicated core department faculty to address the anticipated increase in demand. (Currently, 22 faculty members contribute a portion of teaching time toward the Baker Program, along with professors of practice and other non-tenure-track faculty.)

In addition to establishing the new department, Rubacha’s gift includes $5 million set aside to incentivize others to contribute through a matching fund challenge.

The COVID-19 pandemic and the effects of global warming have upended the real estate industry. Mr. Rubacha's gift will help ensure future generations of real estate practitioners are equipped to provide the innovative solutions America and the world need.

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