Real Estate Finance and Development

This course is intended to give students the training they need to engage in real estate investment and development, both private and public. No prior real estate knowledge is expected, although some background in economics is helpful. The course emphasizes quantitative analytical techniques for evaluating real estate investment and development decisions. A mixture of lectures and case studies are employed to provide students with decision-making skills in many common situations faced by investors, developers, lenders, consultants, and public officials. It covers all major property types including residential, retail, office, industrial, and land. Investments in renovation and redevelopment projects are addressed along with new development. While most of the case studies are set in the United States, real estate investment and development issues in other countries are frequently raised.This is a \'skills\' course, designed to give students the necessary preparation for them to make a wide variety of real estate decisions, both for purposes of personal investing and for careers in real estate. The course assumes that students have a working knowledge about cities with respect to planning and design issues. While the course focuses on evaluating real estate from the perspective of private investors and developers, case discussions and lectures also emphasize public-sector considerations. The course begins with a brief review of the fundamentals of financial analysis (discounted cash flow techniques). Subsequent topics include mortgage analysis (both fixed rate and alternative mortgage instruments), valuation and investment analysis, real estate development (site selection, market analysis, design, finance, leasing, construction, and operations), REITs, and securitization. In addition to the two lectures, students are expected to do problem sets and computer exercises which will be reviewed in the weekly discussion group meetings.