Real Estate Finance

This course will introduce topics in finance that relate to commercial real estate.  It will focus on commercial real estate as a distinct asset class and the role played by the use of debt and equity.  These topics include the time value of money, methods of valuation, risk and return analysis, ownership structure, and the securitization of debt in secondary markets.  The course will also introduce students to the growing role of private sources of capital, legal instruments involved in mortgage financing, and the differences among equity providers.  The course will consider the perspectives of real estate owners and lenders, as well as the risks inherent to each by considering the measurement of investment returns and risk premia.  The course will address ideas in economics and finance.  Substantial student participation is expected throughout the course.


Learning Objectives:
By the end of this course, students will be able to:

  • Understand the basic concepts of real estate finance, including discount future cash flows and capitalization rates as a measure of value.
  • Understand the motivations of capital providers and their role in real estate finance and development.
  • Evaluate the current state of the real estate markets and the implications for real estate development and investment activities.
  • Develop a basic understanding of the changing landscape of real estate from technological change.