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byline: Cathy Jett

Return on investment

Christina Fleming embarked upon a career in marketing with the goal of getting an executive MBA degree, but other commitments kept getting in the way.

She got married, had two children and moved up the corporate ladder for 26 years, rising to chief marketing officer at Blackboard Inc., a global education technology company that was based in Reston. In April, she launched her own company, Monarch Performance Marketing.

“It was just something that I kept putting off, but I always knew I wanted to do it,” Fleming says. “So, towards the end of last year, I made the decision to go ahead and pursue my MBA. I really felt it would be important and helpful to me as a business leader.”

She looked at executive MBA programs that were within driving distance of her Laurel, Maryland, home, taught in-person and could be completed in under two years. She chose the one at William & Mary’s Raymond A. Mason School of Business and enrolled in fall 2021 as one of 13 students in her cohort. Now about halfway through the program, Fleming commutes every other weekend to Williamsburg for classes.

“I was learning every day in the moment and accumulating all sorts of skills [at work], but what the MBA has done is given me an opportunity to really step back and look at how all these aspects of business and the economy are connected,” she says. “It just provides this solid foundation in which I believe I can become a better leader.”

Executive education programs are designed for business professionals like Fleming who have managerial or executive- level experience and want to improve their knowledge and skills so they can advance in their careers. The classes help them stay on top of the latest industry trends, expand their networks and get real-world experience working on projects.

Seven Virginia public universities offer some form of executive education. Programs range from traditional MBA degree programs at W&M, George Mason University, James Madison University, the University of Virginia and Virginia Commonwealth University to shorter certificate programs offered at George Mason University and Virginia Tech. GMU offers customized programs for businesses and organizations, as do U.Va., Virginia Tech and Old Dominion University.

One of the prevailing trends is shorter and more convenient MBA programs, in response to student demand.

William & Mary has offered executive MBA degrees for more than 40 years. Three years ago, the school sought feedback from W&M’s prospective students and alumni — as well as from alumni of other executive education programs across the country and employers, says Ken White, associate dean of W&M’s MBA and executive programs.

What they heard was that students thought MBA programs took too long and that they wanted a certificate option that took less than two years. Respondents also wanted leadership coaching and the possibility of international business experience, White says.

Student feedback helped reshape W&M’s program, which is now 18 months long with eight-hour, in-person classes every other Friday and Saturday.

Global and national perspectives — provided most often by taking students to other countries and introducing them to corporate leaders — are increasingly important, too.

W&M students spend a short residency in Washington, D.C., and go abroad twice to study and meet with business leaders. This year, they’ll go to Greece and South Africa.

“That was another piece that we got in our research,” White says. “People were saying, ‘You know, we need to know a little bit more about the federal government and how it affects business.’ So, we have the two global immersions, and then we have a D.C. residency where the class goes up there for not quite a week.”

William & Mary isn’t alone in offering global travel opportunities to executive MBA students.

George Mason’s MBA Global Residency is a weeklong international study tour. Past residences have included Chile, China, Central Europe and Western Europe.

VCU’s program includes a roughly 10-day trip abroad, usually to partner universities in Central and South America or Europe. Naomi Boyd, VCU’s business school dean, says faculty look at who’s in a cohort, pick a location and build an agenda that can include projects and case studies.

As part of JMU’s MBA program, students can take an optional 7- to 10-day trip abroad to countries such as China, Portugal, Argentina, Chile, Germany and Vietnam, making visits to companies like Hyundai Motor Co., Maersk or Rémy Martin.

Speeding up

Many of Virginia’s executive MBA programs offer an international travel component. In March, JMU students went to Portugal. Photo courtesy James Madison University

At the University of Virginia’s Darden School of Business, MBA students have two nonresidential executive MBA tracks: the executive and global executive programs. Both take 21 months and are hybrid, with in-person sessions held at Darden’s D.C. Metro space in Rosslyn. The other classes are offered remotely, including live online courses and self-paced activities.

Executive students participate in one international residency with the option of adding others, while global MBA students participate in four residencies outside the United States. These typically include a mix of company visits, talks with industry leaders, meetings with executives and cultural excursions. U.Va. also offers a full-time residential MBA program and a part-time MBA option with more scheduling flexibility.

Students in both U.Va. executive MBA programs also participate in two weeklong leadership residencies in Charlottesville on the Darden grounds.

VCU used to offer a two-year MBA program, but it has now shortened the time to get the degree to 17 months, with classes held on alternating weekends, Boyd says.

James Madison University’s College of Business offers an MBA with an executive leadership concentration over 28 months, a longer period than other universities, but it’s geared toward student accessibility. Most of the classes are held online, with in-person residencies that meet on a Saturday once every other month in Tysons. (JMU’s largest alumni populations are concentrated in the Richmond and D.C. areas.)

“It gives us somewhat of a regional tie for people interested in the program in the D.C. metro area, and then maybe some folks who have connections to the institution who live outside of there can still participate in our program,” says Michael Prior, the MBA program’s director of marketing.

Universities also have started offering even shorter options — typically for executives in pursuit of a certificate instead of a master’s degree.

The University of Richmond, a private university, offers a 14-week “mini-MBA” program, for example.

Executive MBA students at the University of Virginia’s Darden School of Business attend in-person sessions at Darden’s DC Metro space in Rosslyn. Photo courtesy Darden School of Business

U.Va. offers The Executive Program, a six-month, hybrid advanced management certificate program that costs about $43,950 — less than a third the cost of the Darden executive MBA tracks, which cost $172,000 to $183,800. Virtual sessions involve a business challenge project, and faculty consultation and one-to-one coaching are included.

George Mason’s School of Business offers a traditional MBA program with accelerated or part-time options, and the school also targets specific specialties, including data and analytics. GMU’s hybrid executive education courses run five weeks each, and students earn a badge of certification. Executive specialties include diversity, equity and inclusion; marketing; risk; and sustainability.

GMU also offers a two-day real estate analytics program, and its faculty can customize offerings for organizations on topics such as government contracting, data analytics and real estate.

Virginia Tech’s Pamplin College of Business in the past has hosted cybersecurity risk series for executives and board members, with special focuses on entrepreneurship and integrated security in event management. Tech currently offers an executive data analytics certificate program.

Old Dominion University doesn’t offer an MBA specifically for executives, but its School of Continuing Education provides customized training for employers who don’t want to put employees “through a full-blown degree,” says Renee Felts, its assistant vice president for academic initiatives and continuing education.

Faculty can create a crash course on anything from soft skills to advances in cybersecurity. Classes can be taught in person, online or via a hybrid of the two. Fees depend on what’s created, and employers may pick up the tab.

“We feel like it’s a well-kept secret,” Felts says.

Executive education doesn’t come cheap, although the payoff can be career advancement and a bigger paycheck. Prices for these programs currently range from $995 for George Mason’s two-day real estate analytics course to $183,000 for U.Va.’s Global Executive MBA. Financial help is often available through the universities or an employer.

Caitlyn Read was associate director for communications at James Madison when she decided to apply for an executive MBA several years ago. She looked at several but says it made financial sense to enroll in JMU’s program since the university, as her employer, would pay for it.

“Our cohort was small, around 20 people. When it’s that small, you rely on each other for a lot. Some of my classmates are still mentors for career growth, some on how to navigate my career,” she says. “We still stay very close.”

Read graduated from JMU’s executive MBA program in 2018 and in 2020 became the university’s spokesperson and director of communications. She’s now its manager for state government relations.

Getting facetime

One important aspect of MBA programs that has remained the same is networking, even in the post-pandemic era.

A report released in May by UNICON, a global consortium of business-school-based executive education organizations, found that the pandemic opened people’s eyes to what could be accomplished in online MBA classes, but there’s still a strong preference for at least some in-person classes.

W&M’s executive MBA program, like those at other Virginia public universities, attracts students with anywhere from eight to 20 years of work experience who have C-suite ambitions. Others have started their own businesses or are preparing to do so, White says.

At the start of their education, students are paired with a certified leadership coach, whom they meet with regularly throughout the program, and they have access to executive partners — about 100 semiretired or retired executives who serve as additional advisers and mentors.

“The Executive Partners program is just a tremendous wealth of support and insight that we have at our fingertips anytime we want it,” Fleming says. “I can reach out to an executive within the marketing arena and learn from his or her experiences [and] have conversations. For example, we had one class where a group of executive partners came in and they did breakout discussions with us on a particular case. We spent time with them in small groups getting their perspective, and it was really exciting.”

VCU students are required to attend in person the first weekend of each month, then have the option of attending in person or online. During their summer semesters, they have the option to add a concentration in either corporate finance or health care management.

“One of the big benefits of the program is the networking,” Boyd says. “We feel it is really important to be integrated into their cohort.”

Although Fleming left Blackboard to start her own business before entering William & Mary’s MBA program, White notes that most of the university’s executive MBA students receive promotions or other career opportunities after earning their degrees.

“It’s very rare,” White says, “for someone to complete the program and have the same position at the end that they did in the beginning.”  

Sky-high rents

The Navy man sat in Barbara Gatewood Sgueglia’s office in tears.

His rent was being raised from $1,600 to $2,750, and with several children and his wife in school, he just couldn’t swing it, even if the landlord offered to split the difference.

Anything else he could afford would likely be “much less appealing,” says Sgueglia, Hampton Roads Realtors Association board chairman and founder of the Military Relocation Team in Chesapeake.

The sailor’s situation has become all too common in Hampton Roads, she says. The number of available rentals has dropped so low and rents have risen so high that it’s become hard for people to find what they can afford.

Part of the reason is that Hampton Roads, with its large military presence, has a lot of what Sgueglia calls “accidental landlords.” These are military families who bought a starter home several years ago and rented it out to build equity when they got reassigned. Now they’re moving back — and the area’s real estate market is so tight, it’s hard to find a new place for themselves.

“They’ve had to move back into their [old] homes and the renter has to move out,” Sgueglia says. “That takes another rental off the market.” The Hampton Roads market had 606 newly listed rental properties during August, according to raw data from the Real Estate Information Network Inc. (REIN) — a steep decline from three years ago, when 1,142 apartments were newly listed. 

Other investors may have pulled out because of problems they encountered during the pandemic and sold their properties at the height of the real estate market, she says.

Meanwhile more people are looking to rent, says J. Van Rose, president of Rose & Womble Realty Co. in Virginia Beach.

“One of the reasons the housing market was so blisteringly hot was with interest rates as low as they were, you could buy almost a $400,000 house with a 3% interest rate and it would be cheaper than going into an apartment by a long shot,” he says. “Now that interest rate has gone up, it’s closed that gap.”

The situation for renters in Hampton Roads is almost dire, says Jeremy Caleb Johnson, an agent and associate broker with Long & Foster/Christie’s International Real Estate in Virginia Beach.

The rule of thumb for rent in most parts of the area had averaged about $1 per square foot of property, meaning an 1,100-square-foot townhome or condo would rent for $1,100 unless there was something remarkable about it, he says. The average rate is now about $1.25 to $1.30 per square foot in what for many renters has become what he termed “an ultra competitive market.” The average monthly rent for the region was $1,800 as of Sept. 1, up nearly $200 from the same period last year.

“We see multiple applications for a property in many, many instances,” says Johnson, board chairman-elect of the Hampton Roads Realtors Association. “We see people offering above the advertised rent.”

Robert McNab, director of the Dragas Center for Economic Analysis and Policy at Old Dominion University’s Strome College of Business, says Hampton Roads is playing catch-up when it comes to rental rates. Prior to the pandemic, they increased slower than the national average. Now they’re accelerating faster.

“Of course, those increases in housing values and rental prices are outstripping gains in wages and salaries,” he says. “That places extraordinary stress on families in Hampton Roads, especially for military families that may be moving to the region and their basic allowance for housing has not kept pace with the rental price appreciation in the region.”

The challenge for Hampton Roads is to diversify its economy, which is highly dependent on Department of Defense spending, McNab says. It accounts for approximately $4 out of every $10 of economic activity in the region.

“Private sector job growth has lagged behind that of other metro areas in Virginia and the nation, so the broad challenge going forward is how to create more robust private sector growth that is not connected to the federal government,” he says. “This is something that’s obviously not going to happen overnight. It’s going to take a concerted effort.”

Sgueglia’s Navy serviceman and his family were ultimately able to remain in their rental property, after they negotiated a $2,200 monthly payment from the landlord, a decrease from $2,750.

“We ended up settling,” she says. “He’s staying. The owner isn’t thrilled, but the owner is a [former] serviceman himself, so he understands.”  

Read about home sales trends in Hampton Roads, including stats and local tax rates. 

A slow shift

Jeremy Caleb Johnson is advising clients preapproved for a mortgage loan at the beginning of 2022 to adjust expectations.

The price of houses they may have looked at just months ago likely not only went up significantly, but the low interest rates available then have also risen dramatically.

“What you may have been able to afford in January of this year, you can’t afford that now,” says Johnson, an agent and associate broker with Long & Foster/Christie’s International Real Estate in Virginia Beach. “We all have places that we would prefer, neighborhoods and parts of the city that we would prefer to live in, but we may not be able to do that now.”

Tight inventory across Hampton Roads caused the median sales price (MSP) for a home to rise from $300,000 last year to $322,500 in July, according to a market summary from Real Estate Information Network Inc. (REIN), the multiple listing service that covers the region from Williamsburg east through Virginia Beach and south across the North Carolina border. 

“A house in Virginia Beach is going to be a little more expensive than a house in Chesapeake,” says Johnson, chairman-elect of the Hampton Roads Realtors Association. “A house in Portsmouth is going to be less expensive than a house in Chesapeake. Buyers may have to find a little bit of flexibility in their budget to say, ‘OK, I really want to be in Chesapeake, but maybe Portsmouth is OK because I can afford to be in this city, or this part of the city as opposed to that part of the city.’”

There are signs that the market is starting to soften due to higher prices and mortgage rates. There were 2,777 pending sales in July, down 19.3% year-over-year and 9.66% month-over-month. Settled sales during that month totaled 2,909, a 23.4% decline year-over-year and down 12.38% month-over-month. Median days on the market were 12 in July, up from nine in June, according to REIN.

“Unlike the 2021 buyer frenzy that we had, we have a more cautious buyer who is very concerned that they may be overpaying for a property,” says J. Van Rose, president of Rose & Womble Realty Co. in Virginia Beach. “They’re still out there. They’re still looking. But instead of getting 15 to 20 offers, we might get two to three, and they’re not well over the list price.”     

Rose says he’s also starting to see contracts that include home inspections, closing-costs assistance and other contingencies that might have been waived when the market was hotter.

While buyers are gaining some bargaining power, they have fewer properties to choose from. There were 4,129 active listings in July, down 10.65% year-over-year and up only slightly — 0.36% — month-over-month, according to REIN.

Rose says one group that is struggling to find property they can afford are active-duty military members, who make up a significant portion of Hampton Roads’ population. They may have been able to combine their housing allowance with a Veterans Affairs (VA) loan to buy the house they wanted when interest rates were low but can’t afford it now that rates are much higher.

Hampton Roads’ housing market is less affordable than it used to be, says Virginia Realtors Chief Economist Ryan Price. Just three years ago, the region’s MSP was $258,950, which buyers with a gross household income of about $61,000 could afford, assuming a typical housing cost burden of 30% of their income.

Today, a buyer would need a gross income of $84,900 to afford a house at the current median price, but regional median income was $68,454, according to the 2020 census. Although the regional median income has likely gone up some since then, it is definitely still below $84,900, Price says.

Rising mortgage rates haven’t made the situation easier. Tidewater Mortgage Bankers Association President Mike Grunwald says buyers panicked earlier this year as mortgage rates began climbing faster than he’d ever seen in his 13-year career. Pre-approvals had to be reevaluated and some clients became discouraged.

Rates, which had climbed as high as 6%, were varying “between 5% and 6%” as of August, “depending on the type of loan program and a buyer’s income and credit rating,” he says. The Federal Reserve Bank, responding to inflation, raised benchmark interest rates four times as of early September, with another hike expected later in the month.

“There aren’t a lot of [refinances] going on, unless it’s for a divorce or they’re cashing out,” says Grunwald, a senior loan
officer at Southern Trust Mortgage in Virginia Beach.

Speaking in August, Grunwald said he thought mortgage rates had probably peaked for the foreseeable future, adding that there were indications that the federal government could provide incentives for builders to construct more affordable housing or offer tax credits to sellers. There’s also been talk of a new 40-year mortgage to help lower payments.

“There’s got to be some kind of responsible action to what’s going on,” Grunwald says. “The middle class has to have some place to live.”

Read here about Hampton Roads’ rental market.