Poslední úprava: PhDr. Pavel Streblov (09.11.2020)
The objective of this applied course is to provide students with thorough theoretical background in real estate and, at the same time, show how these methods are applied in the real world. The course starts with an introduction of property as a specific asset class and puts real estate economics to a wider theoretical context. Property valuation module introduces key valuation methods and their application on income producing assets as well as development projects. Investment module discusses in detail pre-acquisition analysis and the due diligence process. In the next step, debt and equity financing structures are presented including related derivative products and markets. Finally, the portfolio module deals with construction and management of property portfolios with respect to their risk and return characteristics. Key feature of this course is the application of theories and methods in practice. This objective is supported by the fact that the course is taught by two real estate practitioners.
Lecture on-line on the following link meet.google.com/uyz-qagz-rdm
Basic course literature:
Real Estate Finance & Investments, William Brueggeman and Jeffrey Fisher Real Estate Investment, A Capital Market Approach, Gerald R. Brown, George A. Matysiak
Other recommended literature:
Commercial Real Estate Analysis and Investment, David M. Gettner, Norman C. Miller Income Property Valuation, Jeffrey D. Fisher and Robert S. Martin The Economics of Commercial Property Markets, Michal Ball, Colin Lizieri, Bryan D. MacGregor Urban Economics and Real Estate, John F. McDonald and Daniel P. McMillen Construction Economics, Danny Myers Investment Analysis for Real Estate Decisions, Phillip T. Kolbe, Gaylon E. Greer Securitization: Structuring and Investment Analysis, Davidson, Sanders, Wolff, and Ching Risk, Uncertainty and Decision Making in Property Development, Peter Byrne
Section A: ECONOMICS OF REAL ESTATE
Lecture 1: Introduction and Case Study Preview Asset specifics of real estate, types of real estate investment classes. Case study preview and instructions.
Lecture 2: Real Estate Economics Role of property rights and land contracts. Flagship theories of real estate supply and demand. Land price determination, location, land use and density, transition between uses, stock-flow theory and real estate cycles.
Section B: PROPERTY VALUATION
Lecture 3: Overview of Property Valuation Methods Theoretical distinction of property valuation: Gordon growth model, Yield- To-Maturity and the Net Initial Yield. Market Value, Price vs. Worth. Introduction to the comparables method, investment method, profits method, land residual valuation and depreciated replacement costs.
Lecture 4: Traditional Valuation Methods Market valuation. Application of the comparables method vs. the investment method. Overrented and reversionary property. Years purchase. Hard core and froth vs. the term and reversion approaches.
Lecture 5: Discounted Cash Flow and Internal Rate of Return Investment valuation - case study. Sensitivity of IRR with respect to rental growth, yield compression, debt service, leverage and tax environment. Sources of current income and capital gain.
Lecture 6: Property Development and Land Residual Valuation Specifics of real estate development, overview of the development process, highest and best use analysis, land residual method - valuation vs. appraisal, comparison method.
Section C: REAL ESTATE INVESTMENT
Lecture 7: Pre-Acquisition Investment Analysis in Real Estate Sensitivity and Break-even Analysis, Performance Measures, Leverage considerations and options, modelling and simulation assessment.
Lecture 8: Acquisition Due Diligence Process and Underwriting The Underwriting Process, Potential Income Analysis, Net operating income calculations, fundamentals of real estate legal and technical due diligence process, encumbrances and easements, general contents of leases, tenant covenants.
Lecture 9: Debt Capital Markets and Real Estate Derivatives Risk and Leverage, Underwriting loans on Income Properties and Development, Sale-Leaseback options, Mortgage Covenants, Secondary mortgage market, Mortgage-backed and other debt related securities.
Lecture 10: Equity Capital Markets and Real Estate Financing Structures Equity structuring, taxes and real estate investment structures, risk-return profiles, joint ventures, partnerships, public syndicates and real estate investment trusts.
Section D: REAL ESTATE PORTFOLIO MANAGEMENT
Lecture 11: Introduction to Real Estate Portfolio Management The Markowitz model: risk vs. return. The Investment Property Databank and performance measurement. The Sharpe ratio and risk adjusted return. Efficiency of property markets.
Lecture 12: Risk Analysis of Property Portfolios Risk analysis of a single investment. Sensitivity analysis, scenario analysis and the Monte Carlo method. Risk reduction and portfolio size vs. sectoral diversification. Systematic and unsystematic risk.
