This course presents some of the major concepts, principles, analytical methods and tools useful for making investment and finance decisions regarding commercial real estate assets. As the second in a two-course sequence, this course focuses on more advanced topics and the "macro" level, which pertains to decisions about collections of many individual real estate assets, that is, portfolio or firm level decisions and investment management considerations. (More fundamental "micro" level analysis, pertaining to individual properties and deals, is covered in 11.431 taught in the fall semester.) This course also introduces and surveys the major public capital market real estate vehicles, REITs and MBS. Other topics treated include a selection among such subjects as real options, land valuation, development project financial analysis, corporate real estate, capital structure, portfolio strategy, equilibrium pricing of asset classes, investment performance measurement and benchmarking, investment management, and international real estate investing (not all subjects covered every semester). Students can take 11.432/15.427 without having taken 11.431/15.426 provided they have taken 15.401. Such students may have to do some review of the real estate terminology presented in the earlier course if they are not already familiar with basic real estate finance and investment terminology (see the "Key Terms" listed in the backs especially of Chs.1, 9, 11, 14, 16-18 of the text).

In addition to twice-weekly lectures taught by the primary instructor (and occasional guest lectures), there will be weekly recitation periods run by either the recitation instructor or the teaching assistant (and sometimes guest speakers). The course will include four to five case projects or exercises, generally due during recitation. Recitations will also be used for guest lectures from industry leaders and for review of lecture material. Optional problem sets may be distributed and reviewed in some recitations. The course includes an optional (but highly recommended) field trip to New York City where we will visit leading firms involved in real estate securitization.

The grade will be based primarily on two assessments and the case projects. Cases will be graded by the recitation instructor and late assignments will not be accepted. Overall course grading will be approximately as follows:

Midterm quiz..................25%
Final...............................35%
Cases (total)..................35%
Class Participation............5%

Text:
Geltner, D., and N. Miller. "Commercial Real Estate Analysis & Investments." Cincinnati: South-Western College Publishing Co., 2001.

Reading Packet:
A supplemental reading packet may be purchased from Graphic Arts.

Cases: TBA