1. GSD 5204 Real Estate Development and Finance Prof. Richard Peiser

2. Course Goal
This course serves students in the real estate concentration and all students interested in understanding real estate investment and development. It teaches all of the critical financial skills necessary to participate in the real estate market as a buyer, seller, developer, or professional services provider.

3. Who should take this class
This is a basic real estate designed for students who have no prior background in finance as well as those with finance training. An economics course is helpful as bacground.
Students in architecture, planning, urban design, and landscape architecture will find the class very helpful both for personal real estate investment and for developing and/or acquiring real estate assets

4. Basic financial skills
6 functions of a dollar (PV, FV, PMT)
IRRs and NPVs
Mortgage analysis
Valuation and appraisal
Investment analysis
REITs and Secondary markets

5. How to finance your project
Financing alternatives
Private equity versus public markets
Debt versus equity
Joint ventures
Public-private development
Mortgage financing, securitization, capital markets

6. All Property Types Residential Office Industrial Retail Land
For-sale and rental apartments
Office
Industrial
Retail
Land
Hotel, resorts, recreation

7. What creates long-term value?

8. Why are some office buildings more profitable than others?

9. How do you evaluate building upgrades for sustainability?

10. How do you determine residential profit?

11. How do you add value to retail?

12. How do you create profitable economic development?

13. Why do new towns almost always go bankrupt?

14. 5 Stages of Analysis Stage 1 - Simple Capitalization methods
Stage 2 - Discounted Cash Flows during Operating Period (Investment Analysis for income properties)
Stage 3 - Combined Cash Flows of Development and Operating Periods
Stage 4 - Monthly Cash Flows during Development Period
Stage 5 - Joint Venture and Syndication Analysis

15. Process Development process Existing versus new development
Site selection, due diligence, design, financing, leasing/marketing, construction, operations, sale
Existing versus new development
You make money in real estate by adding value through many different means (zoning, entitlements, leasing, finance, ownership, tax)

16. Issues
Factors that have impact on real estate value (location, market, financing, government, infrastructure, ownership)
Investment value
Urban growth, sprawl, and redevelopment – impact on the city’s short-term and long-term health
Impact on society

17. Class Meetings Class meetings M-W 11:30-1:00
Discussion Section – Thursdays 6:00-7:15
Weekly homework assignments due
Review of financial computations and homework problems