Credit markets have made a strong comeback since the global financial crisis. Fears of a global financial system meltdown have now been replaced by concerns about asset valuation bubbles, too much capital chasing too few high quality investment opportunities, the desperate search for investment returns, and the volatility resulting from reduced government stimulus. To be successful in today's uncertain market, commercial real estate industry participants need an understanding of the most commonly used real estate financial analysis techniques, approaches to financial modeling, newly available real estate data sources and indices, and quantitative tools available to manage portfolio risk.
This course provides insights into analyzing the financial risks and opportunities in today's marketplace by utilizing quantitative analytics taught in popular graduate courses at MIT. Current real estate finance market dynamics and trends, the rapid return of securitization, example transactions and identification of the most active capital sources will also be discussed.
Laptops or tablets are required as course materials will be distributed electronically.
Earn a Professional Certificate in Real Estate Finance & Development
This course is part of the Real Estate Finance & Development certificate program, offered jointly by MIT Professional Education and the MIT Center for Real Estate.
Learn more about how you can earn a Professional Certificate when you take this and other real estate courses.
This course has been approved for 16 CPD credits toward renewal of the CoreNet Global MCR designation.
It is highly recommended that you apply for a course at least 6-8 weeks before the start date to guarantee there will be space available. After that date you may be placed on a waitlist. Courses with low enrollment may be cancelled up to 4 weeks before start date if sufficient enrollments are not met. If you are able to access the online application form, then registration for that particular course is still open.
Participants will learn to:
- Understand fundamental financial economic concepts and tools as applied to real estate investment.
- Become conversant with the cutting-edge of real estate investment, relevant for institutional investment management.
- Understand the basics of real estate risk management techniques and products.
Who Should Attend:
This course is applicable to a wide range of professionals across the real estate, banking, finance/investment, and insurance industries. Specifically, the course may be of interest to analysts and investment professionals, fund managers, investment portfolio managers, financial advisors, investment bankers, fixed-income analysts, financial risk managers, global financial market specialists, and professionals working in macroeconomic policy. More generally, this class can be valuable to anyone dealing with global financial markets and real estate investments.
Please note that the schedule is subject to change.
Computer Requirements: Laptops or tablets are required to access course materials. All materials will be distributed electronically.
8:00 am - 9:00 am: Registration / breakfast
9:00 am - 10:30 am: Portfolio Theory & Real Estate
Classical Mean-Variance Optimization and the Risk Parity simplification applied to the mixed asset (total wealth) portfolio implications for real estate (Ref: Chapter 21 in Geltner-Miller et al)
10:30 am - 10:45 am: Break
10: 45 am - 12:15 pm: Capital Flows & Commercial Property Pricing (Bob Whilte, Real Capital Analytics)
Current state of the global real estate investment market from the perspective of one of the institutional investment industry’s most respected information sources
12:15 pm - 1:15 pm: Lunch Break
1:15 pm - 2:45 pm: Current Market Perspectives (Michael Acton, AEW Capital Advisors)
Current perspective on the institutional real estate investment market and economic environment from a leading industry researcher
2:45 pm - 3:00 pm: Break
3:00 pm - 4:15 pm: Risk vs Uncertainty: Investment Property Price Dynamics
Indexing real estate price movements. The nature and sources of uncertainty and price dynamics in the private asset market for investment property. Real estate and equilibrium asset pricing (Refs: Chapters 22,25 & 26 in Geltner-Miller et al; Chapter 7 & Appendix in Geltner & de Neufville)
4:30 pm: Thursday Evening: Work on Graybar Syndications Case (work in groups if possible)
9:00 am - 10:30 am: Flexibility & Uncertainty in Real Estate Valuation
Continuing from previous discussion of real estate price dynamics, consider the implications for the value of flexibility in investment (Ref: Chapters 8-10 in Geltner & de Neufville)
10:30 am - 10:45 am: Break
10:45 am - 12:15 pm: Evaluating Joint Venture Equity Partnership Terms
An important and widely relevant application of the preceding material: advanced capital market theory and simulation of real estate price dynamics to evaluate a typical development project JV waterfall (Ref: Chapter 15 in Geltner-Miller et al, especially 15.3)
12:15 pm - 1:15 pm: Lunch Break
1:15 pm - 2:45 pm: International Real Estate Investment Transactions (Professor Manish Srivastava)
This afternoon discussion will utilize a Case Study to focus on the pros and cons of direct (property) vs. indirect (property platform) investments in an emerging market country. It allows students to investigate the motivations of why an investor would seek out platform investments in a developing country and evaluate the investment risks and opportunities specifically with respect to that country as well as generally for other large emerging markets. The discussion would also involve subtle appreciation of the differences underlying market structures across emerging markets. Students will engage in discussions to design the appropriate strategic, financial and operating terms of the transaction
2:45 pm - 3:00 pm: Break
3:00 pm - 4:30 pm: International Real Estate Investment Transactions
Continue discussion outlined above
This course meets 9:00 am – 4:30 pm both days.
Laptops or tablets are required to access course materials. All materials will be distributed electronically.
JASON BATTISTA, ANALYST, MERCY HOUSING, INC.
“This course was short but very well done. I go to a lot of trainings that don’t go too deep and are geared towards beginners. This course was full of substance and more complex, which was appreciate! I felt like this course was a great value with best in class professors. This course did a great job of bridging the gap between the theoretical and practical. I highly recommend this course and look forward to staying in touch with the Center for Real Estate.”
CHRIS REBER, AEW CAPITAL MANAGEMENT
“Yet again, great course! Excellent material and superb professors!”
ANDREW GAL, GE CAPITAL REAL ESTATE
“RE Finance Advanced confirmed that focusing and understanding the details and data available in RE is necessary.”
Professor David Geltner has been at MIT since 2002, where he has held the George Macomber Chair and currently is Professor of Real Estate Finance in the Department of Urban Studies & Planning with a joint appointment in Engineering Systems in MIT’s School of Engineering.
Geltner served as Academic Director of the MIT Center for Real Estate during 2003-2014, currently serves as the Center's Associate Director of Research, and is the faculty chair of MIT’s Master of Science in Real Estate Development (MSRED). He is the lead author of the most widely-cited real estate investments textbook, Commercial Real Estate Analysis & Investments, now in its third edition.
Recipient of the U.S. Pension Real Estate Association’s prestigious Graaskamp Award in 2011 for excellence and influence in real estate investment research, Geltner has served as Academic Advisor to the National Council of Real Estate Investment Fiduciaries (NCREIF), and as Director of MIT’s Commercial Real Estate Data Laboratory which has developed pioneering commercial property price and investment performance indices based on transactions prices (including the Moody’s/RCA CPPI, the NCREIF-based TBI, and the FTSE-NAREIT PureProperty® Indices). Geltner served from 1999-2012 as the External Academic Member of the Real Estate Investment Committee of the State Teachers Retirement System of Ohio (a pension plan sponsor with over $5 billion of directly managed real estate holdings).
Mike Acton, CFA, is a Managing Director and Head of Research at AEW. He works closely with the Fund’s investment management team in the development of the Fund’s investment strategy and criteria. Mr. Acton joined the firm in 1990 and has 31 years of experience as an economic analyst and forecaster. He is a standing member of the firm’s Investment, Management, Compliance and Risk Management Committees. The resources of AEW Research are an integral part of AEW’s investment process and Mr. Acton works closely with senior professional in all areas of the firm to develop investment strategies that match clients’ risk/reward objectives with market opportunities. Prior to joining AEW, he was with DRI/MGraw-Hill where he managed the Metropolitan Area Forecasting Service. He is a graduate of Bates College (B.A.) and a CRA charterholder.
Professor Manish Srivastava is a visiting professor at the Massachusetts Institute of Technology (MIT). He is also a full-time clinical professor of real estate finance & investment and the former academic chair and real estate finance program chair of New York University’s Schack Institute of Real Estate. He has been an adjunct professor at Columbia University in New York and is a visiting professor at SDA Bocconi School of Management in Milan, Italy.
Professor Srivastava is also the managing partner of Sidhant Capital an international real estate investment and advisory firm. He has over 22 years of experience in real estate capital markets, corporate finance, investment banking, mergers & acquisitions, real estate private equity and investment management, valuation, financial forensic and fraud investigations, and corporate strategy and development. During his professional career he has been involved in the execution of over $50 billion worth of transactions across a range of industries and transaction types. Prior to his career in real estate and finance, for several years he practiced architecture and was the project architect for the Ambassadors’ Residence at the Embassy of Japan in New Delhi and Industrial Finance Corporation of India Headquarters building in New Delhi, among several other development projects. Presently, he is on the board of The Restorative Center, a non-profit organization focused on restorative justice. Professor Srivastava is a regular speaker on various international forums and has delivered keynote lectures across various academic, institutional, and corporate forums in Asia, Europe, North and South Americas. He is also on the academic advisory committee of ANREV (Asian Association for Investment in Non-listed Real Estate Vehicles).
Professor Srivastava graduated from MIT where he earned dual Master of Science degrees in Real Estate (with a focus on real estate finance and development) and Architecture Studies. He was the recipient of the Aga Khan Scholarship for graduate study at MIT. Professor Srivastava also holds a Bachelor of Architecture degree from the College of Architecture at the University of Lucknow in India.
Robert M. White, Jr., CRE, FRICS, President of Real Capital Analytics Inc., founded the company in 2000 to bring greater transparency to the investment markets by providing real-time data of capital flows and prices of commercial properties. He is a noted authority on the real estate capital markets who is frequently cited in the press and has authored numerous articles for industry publications and the firm’s own Capital Trends publications.
Mr. White is a Counselor of Real Estate, a Fellow of the Royal Institution of Chartered Surveyors and a Fellow of the Homer Hoyt Institute. He serves on the board of directors for the Pension Real Estate Association and the advisory board for the Real Estate Research Institution. Before founding RCA, Mr. White spent 14 years in the real estate investment banking and brokerage industry. He is a graduate of the McIntire School of Commerce at the University of Virginia.
This course takes place on the MIT campus in Cambridge, Massachusetts. We can also offer this course for groups of employees at your location. Please complete the Custom Programs request form for further details.
|Fundamentals: Core concepts, understandings, and tools (30%)||30|
|Latest Developments: Recent advances and future trends (50%)||50|
|Industry Applications: Linking theory and real-world (20%)||20|
|Lecture: Delivery of material in a lecture format (90%)||90|
|Labs: Demonstrations, experiments, simulations (10%)||10|
|Introductory: Appropriate for a general audience (20%)||20|
|Specialized: Assumes experience in practice area or field (70%)||70|
|Advanced: In-depth explorations at the graduate level (10%)||10|