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11.431J / 15.426J Real Estate Finance and Investment, Fall 2002

Picture of Austin, Texas at night.
Picture of Austin, Texas at night. (Photo © of openphoto.net.)

Highlights of this Course

This course's main text is written by Professor Geltner, and the lecture notes neatly correspond to the chapters covered in class. Problem sets and a practice midterm are also provided.

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Course Description

This course is an introduction to the most fundamental concepts, principles, analytical methods and tools useful for making investment and finance decisions regarding commercial real estate assets. As the first of a two-course sequence, this course will focus on the basic building blocks and the "micro" level, which pertains to individual properties and deals (as distinguished from the "macro" level that pertains to portfolio and investment management considerations - the macro level will be covered in 11.432 next spring). While we will touch on real estate development in this course, we will focus here on "stabilized" (fully operational) income properties. (Financial analysis of real estate development will be covered in more depth in 11.432). Our perspective will be that of so-called "institutional" real estate decision-making (e.g., pension funds, REITs, banks, life insurance companies), regarding large-scale commercial property. At this level it is important to integrate the perspectives of "Wall Street" (the mainstream securities investments and corporate finance establishment) and "Main Street" (local, traditional real estate business community). This requires a treatment of real estate investment rigorously integrated with, and built upon, the modern corporate finance and investments perspective as taught, for example, in the Brealey-Myers text in the Sloan introductory finance theory curriculum (15.401 & 15.402). However, a key objective of this course is to recognize the unique features of real estate that distinguish it from so-called "mainstream" securities investments and corporate finance.
 

Staff

Instructors:
Prof. David Geltner
Prof. Tod McGrath

Course Meeting Times

Lectures:
Two sessions / week
3 hours / session

Level

Graduate

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