Real Property

Course Number 1684

Professor of Mgt Practice Arthur I. Segel
Fall, 29 Sessions
Exam

Career Focus

This course is intended for any student serious about a career in managing, developing, or investing in real estate. This course is distinctly not for those thinking about real estate as a hobby or for those considering real estate for limited personal investing.

Educational Objectives

1. How to analyze a real estate project;
2. How to assess the risks in projects and portfolios;
3. How to be a better deal maker;
4. How to manage a project; and
5. How to be a leader in the industry.

Content and Organization

Conceptual Framework: The course is divided into six modules with special emphasis on international real estate.

The first module covers the analytic framework for real property development and investing, market analysis, the elements of joint ventures and partnerships, basic financial analysis, and introduces the students to the general vocabulary of the business.

The second module examines each of the main commercial property types (office, hotel, industrial, retail, multifamily), including the general characteristics, additional market analyses and the metrics used in evaluating and operating each of these assets, and particular risks or opportunities with respect to these types of projects and buildings.

The third module reviews capital markets including private equity syndications and deal making, mortgages and real estate investment trusts (REITs). There is a special discussion of valuation techniques used for different property types as well as a discussion of institutional portfolio analysis and investing. Examples illustrating the development process continue to be used throughout the module to highlight both real estate development issues and choice of capital structure.

The fourth module is on negotiations and will include discussions on buying and selling assets, distressed properties, and debt.

The fifth module covers real estate development. Discussions will cover development in emerging markets, entrepreneurial projects, construction management, and development regulation and approvals.

The final module discusses important trends in the industry including sustainability, globalization and opportunities in emerging markets, affordable housing, and infrastructure.

Pedagogical Mix: Real estate lends itself to case method teaching as virtually every subject requires both quantitative analyses as well as judgment calls, and then a practical action plan. Cold calling is done throughout the class.

There are at least three homework assignments and a final exam. Most homework assignments are required to be completed in groups. Additionally, polls will be used frequently and go toward class participation.

A textbook supplements the cases with an additional optional textbook available for a more theoretical underpinning. Mini lectures and a considerable number of technical notes are used throughout the course along with a tool kit with materials for possible future use. The workload and preparation is above average for HBS EC courses. Students seeking advanced real estate modeling on Excel and ARGUS can attend optional afternoon classroom sessions. However, these skills will not be necessary for the Real Property coursework.