University of Southern California - USC Marshall School of ...



University of Southern CaliforniaMarshall School of BusinessDepartment of Finance and Business EconomicsFBE 489Robert Bridges, A.I.A.FBE 489 Real Estate Capital MarketsCourse Overview:This course covers a series of special topics in real estate finance and investment. The areas that will be emphasized include the role of debt and or equity, the history of significant entities providing debt financing in today’s real estate industry, private deal structure and sydications, and macroeconomic influences affecting real estate finance. The course is appropriate for students emphasizing real estate with strong finance skills or students emphasizing corporate finance with a desire to broaden their exposure to some of the unique aspects of real estate. The use of advanced computer software is emphasized. Learning Objectives:Students successfully completing this course will be able to understand industry-standard terminology and techniques for valuing income-producing real estate, identifying risks and opportunities, as well as be able to gain advanced capabilities in the methods for the creation and communication of finance concepts, strategies, proposals and presentations. Students are expected to gain competency in current software applications relevant to the real estate industry.By means of a series of case studies, the student will develop a practical understanding of how the formal finance and market analysis concepts learned introductory classes are applied in a practical context. Students will study the history of governmental agencies and institutions involved in real estate finance, as well as economic factors and events with important relevance to understanding real estate investments.Students will work individually and groups to analyze real-world real estate cases, and prepare and present proposals in class.Course Organization:This course is in a seminar format with a number of individual and group assignments including spreadsheet exercises, case analyses, reading assignments, and group projects. The class meets twice weekly and students are expected to have read the relevant textbook, case and other assigned material prior to the classes during which the topics are to be discussed.The course will feature a final reading and research project with a topic to be proposed by the student. Details about this assignment will be discussin in class during the first week. Course Requirements:Case Analyses50%Final Reading and Research Paper Presentation20%Assignments15%Attendance, preparedness and making a meaningful contribution15%To the intellectual environment of the classroomThe assignments will be drawn from the course reader, from questions from the chapters in the textbook, or from other current and newsworthy material covered in class.All homework assignments must be submitted in printed form during the class session on the day they are due. No late work will be accepted.Textbook, Equipment, Cases and Readings:Required Resources: Students must have an HP 17bII+ financial calculator, and access to a computer running the latest version of Microsoft Excel, Word and Powerpoint in order to complete assignments. Students should have a copy of Breuggeman and Fisher, Real Estate Finance and Investments, Latest Edition, Homewood Illinois: Irwin, and Friedman and Schwartz, A Monetary History of the United States, Latest Edition, Princeton Press. For the final Also, it is assumed that students have covered the standard core material in corporate finance and accounting. In addition to the cases, there will be periodic readings related to the case and lecture materials assigned and distributed by the instructor.ARGUS Software:Personal versions of ARGUS Financial Software are available for sale to individual students for use during the course. It is recommended that the software be purchased by those students contemplating its use outside of the classroom. The software will not be used during the course, however, ARGUS is commonly used in the real estate industry and familiarity with the program may assist in placement for those students pursuing real estate careers. ARGUS is available on our network but is not accessible from off campus. An application for ARGUS will be distributed. The cost is a small fraction of the retail cost of the software and includes a manual. The software (and license) expire at the end of the school year.Other Resources:There are numerous periodicals that are relevant and good reading too keep abreast of real estate events, trends, people, players and deals. This is by no means an exhaustive list but a start. Among periodicals, the National Real Estate Investor, Commercial Property News and the Real Estate Alert (expensive weekly) provide good national coverage. The Real Estate Review is an excellent applied Journal. The Property Report appears in Section B of the WSJ every Wednesday. There are numerous others. Local periodicals include the Los Angeles and Orange County Business Journals. The LA Times Business Section has regular coverage of commercial real estate on selected weekdays.Websites that are of interest include:realestate/Note: Student readings from the Brueggeman and Fisher Text, Harvard Business School Cases and other cases in preparation for lectures and class sessions are shown in boldface type.Tentative Schedule of Class Meetings:Week 1 Course OverviewWeek 1Finance Principles Review Week 2MS Excel and Spreadsheet ReviewWeek 2The Early History of the Federal Reserve SystemWeek 3The Economics of the Great DepressionWeek 4The Early History of Mortgage Finance Week 4Mortgages and The Evolution of Residential and Commercial FinanceWeek 4The Secondary Mortgage Market and Mortgage Backed SecuritiesWeek 5The Anatomy of the Recession of 2007Week 5Current Market ConditionsWeek 6Introduction to Syndications, Partnerships and the Structure of Financial Transactions Week 6Examples of Deal Structure and Partnership Distribitions Week 7Case Study: The Empire State Building (1929)Week 7Case PresentaitonsWeek 8Case Study: The Empire State Building (2012)Week 8Case PresentationsWeek 9Case Study: Rockefeller CenterWeek 9 Case PresentationsWeek 10Case Study: Camden YardsWeek 10 Case PresentationsWeek 11Case Study: The Newhall Land and Farming and Irvine CompaniesWeek 11Case PresentationsWeek 12Case Study: Kelo v. City of New LondonWeek 12Case PresentationsWeek 13Case Study: Farmer’s Field CaseWeek 13Case PresentationsWeek 14Slack Week 14Reserch and Reading Project Final Draft ReviewFinal Exam:Research and Reading Project PresentationsRefer to University Final Exam Schedule for Date and TimeInstructor Access:The instructor will hold office hours by appointment only. E-mail is the preferred method of communicating with the instructor.Campus Office: 301F AccountingTelephone:310-494-6125E-mail:rbridges@marshall.usc.eduAcademic Integrity:The use of unauthorized material, communication with fellow students during an examination or other exercise, attempting to benefit from the work of another student, and similar behavior that defeats the intent of an examination, assignment or other class work is unacceptable to the University. It is often difficult to distinguish between a culpable act and inadvertent behavior resulting from the nervous tensions accompanying examinations. Where a clear violation has occurred, however, the instructor may disqualify the student’s work as unacceptable and assign a failing mark on the paper.Returned Paperwork:Returned paperwork, unclaimed by a student, will be discarded after 4 weeks and, hence, will not be available should a grade appeal be pursued by a student following receipt of his/her grade.Students With Disabilities:Any student requesting academic accommodations based on a disability is required to register with Disability Services and Programs (DSP) each semester. A letter of verification for approved accommodations can be obtained from DSP. Please be sure the letter is delivered to the instructor as early in the semester as possible. DSP is located in STU 301 and is open 8:30 a.m. - 5:00 p.m., Monday through Friday. The phone number for DSP is (213) 740-0776. ................
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