PLANA4310
REAL ESTATE FINANCE I
2024
Course Description
The objective of this course is for the student to develop a robust working competency with the tools and methods of financial analysis used by real estate developers, lenders and investors. Students will solidify and expand their knowledge of the various concepts inherent in the financial analysis of real estate investments, apply these concepts to making critical analyses of various real estate investment proposals, and build upon these tools in formula!ng the capital structure of debt and equity for real estate transactions.
Additionally, the student is to extend the capacity for financial analysis to the complex real estate development and construc!on activities. The goal is for students to further their understanding of, and facility with, the various tools used in evaluating the financial feasibility of real estate development projects, to apply these analytical capabilities in making critical comparisons of various real estate development proposals, and to utilize these tools in formulating the most effec!ve capital structure for maximizing the risk-weighted return during the various stages of these projects.
Associated Financial Modeling Lab
In parallel with the lectures, students MUST enroll in and a#end a Financial Modeling course. Students who successfully complete a qualifying test, will be able to waive that course.
The Adjunct Faculty instructor for this workshop is Professor Chok Lei.
An ADDITIONAL op!onal tutorial is by Adjunct Professor Ma"hew Choi, and is strongly recommended for those with no prior educa!on or experience in finance.
COURSE STRUCTURE
Technical Content: During the course, students will learn the technical concepts and analytical methods utilized in determining the financial feasibility, the debt funding and investment returns of real estate investments and development projects. Competence with the applicable financial modeling tools will be gained; and the details of decision-making in the various stages of the investment analysis and the development process will be covered.
Application:
Most critical to the student’s learning in this course is the application of the learnt concepts and methods of finance to real life real estate development and investment situa!ons. This application will be achieved by the student’s par!cipation in the following activities:
1. A"endance and Participation in Class: Concepts and analytical methods will be learned by reasoning through and questioning the real estate investment and development processes. Students are expected to engage in these investigative sessions with the professor by asking questions, responding to queries, and challenging notions.
2. Quizzes, Tests and Homework Assignments of specific problems will be undertaken individually by the student throughout the semester in order to ascertain that specific student’s progress in understanding and utilizing the concepts and analy!cal methods.
3. FINANCIAL MODELING COURSE: A"endance and successful completion of the associated Financial Modeling course is required for passing this course.
Course Requirements
Students will be expected to attend and par!cipate in class discussions as these will factor in to the final grade.
Attendance: Class attendance will be reflected in the final grade. An email notifying the professor of your expected absence is recommended. If a class is missed, the student is responsible for reviewing the posted class notes and make arrangements to meet with the professor to ensure that the lessons of the missed class are understood.
Class Preparedness: Students are required to read all assigned readings for each class, together with any supplemental presenta!ons, case studies and homework assignments. Readings from the required textbook (or e-book) and recommended readings are provided in the Session Topics listing below.
Excel: Many of the concepts in the class will u!lize Excel and the successful completion of the Financial Modeling course is required.
COURSE GRADING CRITERIA
Course grading will be weighted and assigned as follows:
Attendance and class participation in the discussion of technical material, quizzes, and case studies: 10%.
Homework Quizzes: 20%
FINANCIAL MODELING LAB (need to pass)
Midterm Exam: 30%
FINAL EXAM: 40%
CLASS TEXTBOOKS
Recommended Reference Textbooks (not required textbooks):
Professional Real Estate Development 3 Edi!on, Richard B. Peiser & David Hamilton, 2012 Urban Land Institute.
Real Estate Finance and Investments, 14 Edi!on, William B. Brueggeman, Ph.D. and Jeffrey D. Fisher, Ph.D.
Commercial Real Estate Analysis & Investments,3 edi!on, Geltner, Miller, Clayton, Eichholtz, 2013, Cengage Learning.
Recommended Readings:
Wall Street Journal (in particular, Wednesday’s Real Property section)
NY Times (Sunday’s Real Estate Section)
Crain’s NY Business
The Real Deal