Real Estate Finance: Advanced

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 Fears of a global financial system meltdown have now been replaced by concerns about asset valuation bubbles, too much capital chasing too few high quality investment opportunities, the desperate search for investment returns,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.

Computer Requirements:

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.

Lead Instructor(s): 

David Geltner

Dates: 

Jun 13, 2019 - Jun 14, 2019

Course Length: 

2 Days

Course Fee: 

$3,200

CEUs: 

1.2

Status: 

  • Open

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.

Registration for this course will close by June 1

Participant Takeaways: 

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.

Program Outline: 

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.

Day One

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)

Day Two

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

Course Schedule: 

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.

Participants’ Comments: 

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.”

Instructors: 

Location: 

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.

Content: 

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

Delivery Methods: 

Lecture: Delivery of material in a lecture format (90%) 90
Labs: Demonstrations, experiments, simulations (10%) 10

Levels: 

 

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