Real Estate Funds and Portfolio Management



Real Estate Funds and Portfolio Management2 CreditsBU.242.710.XX [NOTE: Each section must have a separate syllabus.][Day & Time][Start & End Dates][Semester / ex: Fall 2019][Location / ex: Harbor East]Instructor[Full Name]Contact Information[Email Address][Phone Number, ###- ###-#### (Optional)]Office Hours[Specify the day and time of the 2 hours that will be dedicated to office hours each week. For evening classes, faculty may wish to hold their office hours by phone or email. While faculty are permitted to state “and by appointment,” office hours should not be held exclusively by appointment.]Required Texts & Learning MaterialsBrueggeman, W. B., & Fisher, J. D. (2016). Real Estate Finance and Investments (16th ed.). New York, NY: McGraw-Hill. (unless 17th edition is available)Homework assignments will be handed out in class.Readings Posted to Blackboard: “Investing in Real Estate Funds, Partnerships, and REITs” by Bennett Jay Yankowitz.Lecture Notes: The lecture notes will be posted on the course website.Course DescriptionA significant amount of commercial real estate investments is held in the form of large real estate funds. These funds typically range in size from $50 million to over $50 billion. Many of the large office buildings, regional malls, apartment buildings, and industrial parks in the country are held in these funds. Some funds invest in senior housing, student housing, parking, healthcare, and even farm and timberland. The managers of these funds are large institutional investment management firms that manage the properties on behalf of wealthy investors, pension funds, endowments, and sovereign wealth funds. The purpose of this course is to understand how these funds are organized, how they arrive at an investment strategy, and how to evaluate how they have actually performed relative to that strategy. Case studies and actual industry data will be used to reinforce the concepts discussed in the course. This course was previously titled Managing Real Estate Portfolios.Prerequisite(s)BU.231.620 Corporate Finance or BU.234.610 Real Estate and Infrastructure FinanceLearning ObjectivesBy the end of this course, students will be able to: Measure risk and performance of real estate funds.Understand different strategies followed by real estate private equity funds.Apply portfolio theory to the inclusion of real estate in an efficient portfolio.Understand the concept of attribution analysis applied to benchmarking real estate funds.Acquire familiarity with a variety of financial instruments used by funds such as real estate derivatives.To view the complete list of the Carey Business School’s general learning goals and objectives, visit the Carey website.Attendance Attendance and participation are required for this course. Participants are expected to attend all scheduled class sessions. Failure to attend class will result in an inability to achieve the objectives of the course. Excessive absence will result in loss of points. Full attendance and active participation are required for you to succeed in this course.Assignments AssignmentLearning ObjectivesWeightExam1–550% Homework assignments1–510%Case study: Memorex1–520%Case study: Western U.S. Property Fund1–520%Total100%Course grades will be based on two quizzes, homework assignments, and case studies. The quizzes will be closed-book. Homework assignments will be given each week and will be due by the next class. PointsCriteria Description7–10Adequate understanding of the contents is illustrated by high performance on analytical items and deep discussion of conceptual ones.4–6Partial demonstration of understanding of the covered material. Lack of connection to lecture contents, or class discussions.0–3Poor presentation of knowledge which does not indicate understanding of the material. Failing to submit on time.GradingThe grade of A is reserved for those who demonstrate extraordinarily excellent performance as determined by the instructor. The grade of A- is awarded only for excellent performance. The grades of B+ and B are awarded for good performance. The grades of B-, C+, C, and C- are awarded for adequate but substandard performance.?The grades of D+, D, and D- are not awarded at the graduate level (undergraduate only). The grade of F indicates the student’s failure to satisfactorily complete the course work.Please note that for Core and Foundation courses, a maximum of 25% of students may be awarded an A or A-; the grade point average of the class should not exceed 3.3. For Elective courses, a maximum of 35% of students may be awarded an A or A-; the grade point average of the class should not exceed 3.4. (For classes with 15 students or fewer, the class GPA cap is waived.)Tentative Course CalendarInstructors reserve the right to alter course content and/or adjust the pace to accommodate class progress. Students are responsible for keeping up with all adjustments to the course calendar.WeekContentReadingDue1Introduction to Real Estate Funds and Institutional Real Estate MarketsPrivate vs. public real estate marketsPlayers in the institutional real estate marketTypes of funds and strategiesCurrent trends in the institutional real estate marketSources of data on real estate trendsChapter 18, pages 583–597 and 609–618Chapter 21Chapter 23, pages 752–7642Real Estate Portfolio AnalysisDiversification strategiesMean-variance analysis applied to real estateIntro to Excel optimization model and assignmentPerformance Measurement of Properties and FundsTime weighted returns vs. IRRsRisk measuresHold vs. Sell Analysis & portfolio rebalancingChapter 22Chapter 23, pages 765–774Chapter 14, pages 458–467Homework 13Fund Strategy, Structure and SponsorshipPrivate Equity Fee StructuresTypes of feesCarried interestClawbacksAttribution Analysis of Real Estate FundsBenchmarksAttribution analysis calculations (allocation and selection)Risk considerationsJoint VenturesTypes of JVsStructure of JVsReal estate derivativesWhy would a fund use?StructuresDiscuss case studyChapter 23, pages 775–783Case Study: Merox Oil Corporation. Turn in report at beginning of class.Homework 24Discuss Case StudyReviewExam (bring laptop and calculator)Reading: Investing in Real Estate Funds, Partnerships, and REITsCase Study: Western U.S. Property Fund. Turn in report at beginning of class.Carey Business School Policies and General InformationBlackboard SiteA Blackboard course site is set up for this course. Each student is expected to check the site throughout the semester as Blackboard will be the primary venue for outside classroom communications between the instructors and the students. Students can access the course site at . Support for Blackboard is available at 1-866-669-6138.Disability ServicesStudents with disabilities who require accommodations for this course should be registered with Disability Support Services and provide a copy of their accommodation letter as soon as possible. If you have not yet registered with Disability Support Services, please contact them to discuss your needs and begin the registration process (carey.disability@jhu.edu or 410-234-9243). For more information, please visit the Disability Support Services webpage.Academic Ethics PolicyCarey expects graduates to be innovative business leaders and exemplary global citizens. The Carey community believes that honesty, integrity, and community responsibility are qualities inherent in an exemplary citizen. The objective of the Academic Ethics Policy (AEP) is to create an environment of trust and respect among all members of the Carey academic community and hold Carey students accountable to the highest standards of academic integrity and excellence.It is the responsibility of every Carey student, faculty member, and staff member to familiarize themselves with the AEP and its procedures. Failure to become acquainted with this information will not excuse any student, faculty, or staff from the responsibility to abide by the AEP. Please contact the Student Services office if you have any questions. For the full policy, please visit the Academic Ethics Policy webpage.Student Conduct CodeThe fundamental purpose of the Johns Hopkins University’s regulation of student conduct is to promote and to protect the health, safety, welfare, property, and rights of all members of the University community as well as to promote the orderly operation of the University and to safeguard its property and facilities. As members of the University community, students accept certain responsibilities which support the educational mission and create an environment in which all students are afforded the same opportunity to succeed academically. Please contact the Student Services office if you have any questions. For the full policy, please visit the Student Conduct Code webpage.Student Success CenterThe Student Success Center offers free online and in-person one-on-one and group coaching in writing, presenting, and quantitative courses. For more information on these services and others, or to book an appointment, please visit the Student Success Center website.Other Important Policies and ServicesStudents are encouraged to consult the Student Handbook and Academic Catalog and Student Services and Resources for information regarding other policies and services.Copyright StatementUnless explicitly allowed by the instructor, course materials, class discussions, and examinations are created for and expected to be used by class participants only.?The recording and rebroadcasting of such material, by any means, is forbidden. Violations are subject to sanctions under the Academic Ethics Policy. ................
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