Was browsing the US list of billionaires and researching those who made their money from real estate. I've noticed that some of the top players I've come across graduated from law school- think there is any correlation here? (also noticed they're mostly California-based, but that one seems I assume to be related to the recent boom)
-Sam Zell
-Sanford Diller
-Rick Caruso
-David Bonderman
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Smart people go to law school, and understanding contract law helps a lot in real estate.
All that being said, take any list of real estate billionaires with a massive grain of salt. The people who compile those lists generally have little idea what's going on, which allows people to overstate or understate their wealth. It's very easy to hide identities and true valuations in this industry, unlike in the equities market, where shareholders are often a matter of public record.
Not to harp on him, but since he is President... Donald Trump basically made up a number for his net worth for decades and that was faithfully parroted by most media reporting on it. Whatever other shady shit he had going on, Forbes et. al. certainly weren't netting out the debt he owed, or questioning what he was determining the value of the Trump brand was (he claimed something like 3 billion, if I recall). On the other side of it, I know of at least a couple families that have owned Manhattan real estate for generations but are extremely private. Owning several thousand Upper East Side rental units means you're a billionaire, but these folks aren't interested in trumpeting that or being in the spotlight.
When you mentioned contract law, what ways is it helpful in real estate?
Or are you saying in general it helps to have a background knowledge in it?
Real estate is essentially governed by contracts: purchase and sale agreements, joint venture agreements, development services agreements, GC contracts, leases, loan agreements, listing agreements, permits/entitlements. Pretty much everything we do is reviewed or compiled by lawyers.
Wealthy individuals also hire Attorneys. So they see where and how the deals are being done and can copy their business plan.
these were the days before tech and start-ups were revered as well as entrepreneurialism. the best path for a smart person career wise was going to law school. These big RE guys studied law which was and still is a great career but realized they were smarter than their clients who were making much more than them so ventured into RE
Law school used to be more 'prestigious' than it is today. In fact, MBAs used to be viewed as 'trade school', and the MSRE(etc) didn't even become a thing until the late 80's (and only a few schools like NYU and MIT had it). This has changed a lot over the decades, most 'billionaires' are old. Law school was the top thing to do if you were smart and didn't want to go to med school.
The next round of billionaires from RE will probably be different, the will have Jr. next to their name, not JD!
It helps you be a more creative dealmaker because you arguably have a deeper understanding of the levers that exist for you to pull, as Ozymandia alluded to.
Many people go to law school because they don’t know what else to do, and it was even more prevalent back when these guys were in their 20s as redever mentioned.
To your JD list you could add:
Very random list of non-JD real estate entrepreneurs that could go on seemingly forever:
I think it's fair to say that historically there were more legal inefficiencies in the market that could be exploited, be it tax, zoning, the low income housing laws and regulations, etc., and that a law degree allowed one to navigate these inefficiencies.
Can someone chime in on Thomas Barrack (CEO of Colony, and also a JD)? His career seems like a pretty wild ride. Lawyer in Saudi Arabia, apprentice in Congress, friendships with Saudi royalty and ties to Trump, Manafort etc
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