Real Estate Finance and Development
GSD 5204, Fall

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 are reviewed in the weekly discussion group meetings.

Design and Real Estate Dynamics for the Dallas Arts District
GSD 5318, Seminar, Spring 2008

Overview of the course
This course is intended to provide students an understanding of the dynamics and complexities of reality that create contemporary urban physical environments. The course emphasizes the integration of design and development in projects that respond to realistic market demand, political, financial and other regulatory constraints, as well as providing a critical understanding of the contemporary forces and patterns of urbanization in the American context. This seminar combines students from a range of disciplines in an immersive investigation of urban design and development focusing on three areas: 1. the exploration of local formal and economic contexts and comparables in lieu of trajectories of growth and spatial disposition, 2. a critical review of emerging urban morphologies appropriate to the context and 3. an understanding of the potential role of catalytic design interventions in the restructuring of large urban districts. These three areas of research culminate in a design proposal for the emerging Arts District in Dallas, Texas.

Student requirements
The students visit Dallas for 3-5 days in the first week of March. They meet with stakeholders as well as the sponsors, local developers, brokers, civic leaders, and government officials to get the best possible understanding of the site, the downtown, the strategic goals and growth plans for the city.

Throughout the course of the semester, students are expected to create a development plan for the study site that includes specific design proposals and financial plans under the guidance of the instructors and through regular contact with the sponsors. Students make a final presentation using both slides and printed material to a jury at the mid-term and at the end of the term.

Students then prepare a final report for the instructors that is also sent to the Sponsors of the field study. Representatives from each of the teams also travel to Dallas in May to present their results to the stakeholders in conjunction with the Harvard Symposium, Good Design Makes Good Business.

Field Studies in Real Estate, Planning & Urban Design? An Alternative Downtown for Amsterdam; and A Cultural Renaissance for the City of Lee, MA
GSD 5212, Spring, with Bing Wang

This course is intended to provide students an understanding of the dynamics and complexities of reality that create contemporary urban physical environments. The course emphasizes the integration of design and development aspects of projects that respond to realistic market demand, political, financial and other regulatory constraints. It is designed for real estate professionals, planners, and designers to broaden their understanding of urban issues and problems, as well as to improve the applicability of their skills in either design or financial analysis in the context of real estate developments.

The pedagogical objectives of the course are as following:

1. to introduce students to the intrinsic linkage between financial soundness and design creativity required in the process of real estate development.
2. to introduce students to the framework of capital market mechanisms and the broad range of activities involved in achieving the success of real estate development with special attention to the various roles played by professional service providers
3. to expose students to as many aspects of real estate issues and decision-making challenges, as possible, both from the private developer's perspective and the public sector.

Students work in teams of three members undertaking field study projects sponsored by property owners, non-profit organizations and public agencies. Under the guidance of the professors and in cooperation with the sponsor, students act as professional consultants to the owners/investors of the project. Students visit the sites in late February or early March. Travel expenses are covered by the sponsors. Each field study project is tailored to the problems posed by the site. During the semester, investigations include development feasibility studies (market, physical, environmental, and political), site planning, urban design guidelines, financing framework, public/private joint-venture structure and other critical factors affecting the solutions to planning, design and development of the project.

The course is one of "learning through doing." The cases are designed to place students in decision-making situations commonly faced by real estate, planning, and design professionals in reality. An in-class lottery will be held during the first class if too many students prefer a particular project. Students must come to the first class or they will lose their lottery preference.

Field study projects for Spring 2008 are (1) Amsterdam southern-axis commercial center redevelopment emphasizing "high-street" retail and mixed-use development, and (2) post-industrial mill redevelopments for the city of Lee in Massachusetts and a downtown revitalization project emphasizing the Berkshire Mountains arts/culture renaissance for local neighborhoods and residents of NYC and Boston.

Project Descriptions:

Amsterdam, Netherlands:
Sponsored by Redevco, one of the largest shopping center owners/developers in the Netherlands, and assisted by Visiting Scholar and Netherlands-based retail expert, Baptist Braye, the Amsterdam Field Study will focus on redevelopment of Zai-Das - the new commercial center of Amsterdam on the southern axis expressway as a planned alternative downtown for the city. The field study site is approximately six miles from Amsterdam's historic core, borders the southern axis freeway and consists of approximately 12 blocks adjacent to the initial development of the alternative downtown. The government is currently planning to place a one-mile section of the southern axis freeway underground at a cost of $3 billion over the next ten years. A consortium of recent developments, designed by major architects including Vinoly, Graves, Pei, Foster, and KPF, are already placed on the neighboring parcels. As the course requirements, the Development Plan and Strategies call for the programs of "high-street" retail with mixed-use residential and office along with open space, recreation, and public uses appropriate for creating a new neighborhood on one of the most important sections of Zai-das. Students will spend a week in Amsterdam in early March on a sponsored field trip for site visit.

Note: Students in the Amsterdam Field Study will be simultaneously enrolled in GSD 9206, a two unit Independent Study, for which they will undertake historic analysis and precedents investigations into mixed use developments in the Netherlands. The additional two units recognize the time required for this field study as well as additional design expectations.

Lee, Massachusetts:
Sponsored by the City of Lee and board members of the REAI (Real Estate Academic Initiative at Harvard), this focuses on redevelopment of the historic town center of Lee in the heart of the Berkshire Mountains. Three historical mills have closed down and are available as catalysts for the redevelopment. The City of Lee is located in the gateway to the Berkshire Mountains and one of the fastest-growing arts and cultural destinations in the country. Close to Tanglewood (Boston Symphony summer home), Jacob's Pillow (national Dance Theater) and a number of art and historic museums, Lee is in the early stages of rebirth from its historic economic base of manufacturing. Students will spend several days in the City of Lee, meeting with city and economic development officials, civic leaders, developers, arts organization heads, and other stakeholders to determine the highest and best use for the mills. Students will prepare redevelopment strategies for the mill sites as well as a master plan for the redevelopment of the downtown area. Solutions will address the needs for residential, retail, hotel, and office uses as well as open space, culture, parking, transportation, and recreation.

A balanced group of designers (MArch, MAUD, and MLA) will be admitted along with Mdes/Real Estate and MUP students.

Advanced Real Estate Development and Finance
GSD 5303, Lecture, Spring

This course builds on GSD 5204 and comparable introductory real estate courses offered by other schools at Harvard. This year's course covers four main topics: (1) advanced financial analysis and deal structuring for land and building development, (2) Debt and equity capital - how to structure a capital proposal and where to go for different types of equity, (3) REITS, public real estate markets, and market cycles, and (4) Buying distressed debt and non-performing loans with emphasis on Asian capital markets.

The objective of the course is to give students in-depth financial analytical skills for the dominant forms of real estate financing, fund management, and development. Using case studies and lectures, the course focuses on advanced real estate finance topics for all major real estate product-types including apartments, office, retail, industrial, single-family, and land development. The course also emphasizes financial structuring and key decision-making for all phases of the development process including site selection, due diligence, design, financing, construction, leasing, operations, and sales.

The course is team-taught by four faculty, coordinated by Professor Richard Peiser. Each faculty member is a specialist in the area he is covering in the class. Their course topics, brief descriptions, and emails for contact purposes are the following:

Richard Peiser (rpeiser@gsd.harvard.edu)

How to analyze investment returns and structure development deals for income property developments and for land and for-sale housing developments. Topics include land and community development and mixed-use development as well as the 5 stages of income property analysis. Richard Peiser is the Michael D. Spear Professor of Real Estate Development at Harvard Design School.

Readings

Professional Real Estate Development: the ULI Guide to the Business, 2nd Edition, by Richard Peiser, published by The Urban Land Institute, Washington, D.C., 2003.(PRED)

Additional articles and case studies are assigned by the faculty for each class.

Assignments and Grading

Case studies are the focus of most class sessions. Students are encouraged to work together in study groups to prepare the cases for discussion and to perform the analytical computations emphasized in each case. Each professor may give homework assignments that are due on the date of the class for which the homework is assigned. They may also take class participation and case presentations into account. There is a single major term paper that constitutes the major basis for grading apart from class participation and homework. Students select one of the five faculty members to work with on their term papers. It is expected that they consult the faculty member at least twice during the term. That faculty member is responsible for giving the student feedback on the term paper and for issuing a grade. Term projects/papers may be any one of the following: (1) a term paper on a topic selected by the student, (2) preparation of a case study on a complex real estate project. The project may be a either a privately-sponsored or publicly-sponsored project in the United States or abroad, or (3) analyzing a complex deal, fund, or other investment opportunity.

New Towns in the United States and Abroad
GSD 9206UPD03, Seminar, Fall 2004-Spring 2005

Ten to twelve students are selected to take part in a yearlong research seminar on new town planning, design, and developments. Students sign up for the class in the Fall semester. (Students who do not have room in their fall schedule but want to take the class may sign up for an Independent Study in the Spring semester with permission of the instructors.) The class meets biweekly. Each student focuses on a new town in the United States or internationally and produces a paper for publication at the end of the Spring term. [Note: Students taking the course for the Fall term receive an Incomplete until the final paper is turned in at the end of the Spring term.]

Despite the fact that new towns are one of the most important forms of large-scale developments in Twentieth Century town planning, they have been plagued by financial problems and have had less impact on urban development patterns than planners would have anticipated. They are the center of controversial debates in both development and design fields, and have been criticized on a number of grounds, including monotonous planning and design, homogeneity, having too many social objectives, being unresponsive to market forces, not delivering on the promise of large-scale planning, and being financially unsuccessful. At the same time, they have been praised for raising the standards of subdivision development, providing more open space and recreation, encouraging an "idyllic lifestyle," fostering a sense of community, and developing social institutions more rapidly and more successfully than other forms of real estate development. And they have provided housing for millions of people around the world.

The goal of the seminar is to evaluate and compare eight major new towns throughout the world that are substantially completed. There may be one or two exceptions where younger new towns are included, such as the new towns currently being developed around Shanghai. Students help select the new towns and devise the methodology and criteria for analyzing the new towns from several perspectives, including economics and finance, urban design and planning, building local governance and social institutions, and meeting national housing and social goals. Among the new towns to be considered are Irvine Ranch, California; the Woodlands, Texas; Reston, Virginia; Columbia, Maryland; First Colony, Texas. New towns in Great Britain, China, France, and Sweden, among other countries, are also included. Students receive funding for a site visit and are expected to conduct 30-40 interviews with people representing all aspects of the new town's development and history as well as producing the comparative evaluations along the various dimensions of analysis.