Center for Real Estate

An introductory survey course intended to provide a foundation for understanding the workings and players in the real estate market. Topics include: Real Estate as an Economic Good, The Bundle of Property Rights, The Transaction Process in Real Estate and Liquidity, Valuation of Real Estate Interests, Highest and Best Use, Feasibility Analysis, Tax Considerations in Real Estate Investment, Optimal Leveraging Strategies, Institutional Real Estate Investment and Portfolio Considerations, Securitized and Structured Real Estate Interests, Investment Performance of Alternative Property Classes, the Role of the Developer, Public Sector Involvement in the Real Estate Market, Corporate Real Estate Asset Management, and the Future of Real Estate. Course features a hands-on approach to analysis of real estate deal opportunities and case presentations by several members of the real estate professional community.

Prerequisite: None.

The primary goal of this course is to develop a working understanding of the four segments of real estate capital markets: Public Debt, Private Debt, Private Equity and Public Equity and how these markets affect real estate investment. The key elements of discussion include (1) Real Estate as an Investment: What are the fundamental drivers of real estate as an investment asset class? Who are the key players in the investment of real estate, and what role do they play in the capital structure? How do different types of investment opportunities (development, investment, product type) command different capital solutions as a result of risk/return analysis. (2) Supply and Demand of Real Estate: Why do different sectors of real estate (i.e. commercial vs. multi-family) perform differently, and what factors that drive capital to a specific product type? (3) The Purchase and Sale of Real Estate: Fundamental asset underwriting valuation strategies and partnership organization scenarios (debt and equity participation, joint ventures, general partnerships, etc.). (4) Debt and Equity: This includes debt sources (Commercial Mortgage Backed Securities, Banks, Private Funds etc.) and equity sources (Pension Funds, Private Equity Funds, REITs, etc.) that are the major sources of investment capital within the real estate industry. Each of these sources has differing structures that will affect overall returns. Identifying these requirements and reconciling their differences is a critical component of structuring a successful real estate investment.

Prerequisite: 246A or permission of instructor.

A capstone seminar intended to build upon the previous foundational curriculum. Most formal education in real estate has revolved around “The Deal”. However, while understanding and being able to shape optimal deal structures is essential, in the end the real estate professional must ultimately be concerned with management of the real estate enterprise itself. This enterprise ranges from the individual who acquires and manages a few small residential properties to the largest publicly-listed commercial property REIT or institutional real estate investor such as a public pension fund. The ultimate goal is to grow and prosper, but what that means and how to get there may be ambiguous. This course is intended to explore the various aspects of decision making as they relate to management and leadership of the real estate enterprise that is directly focused upon strategic objectives. Topics covered include: What is your Ultimate Goal? Making and Following an Effective Business Plan; Alternative Legal Structures; Tax Issues; The Family-Owned Firm and Succession; Going Public – Liquidity vs. Reporting and the World of Sarbannes-Oxley; Corporate Ethics – Form vs. Substance; Optimal Capital Structure; Diversification Issues – Geographic, by Property Type, by Product Type; by Stage in Development Cycle; Core Competencies vs. Non-Core Activities; Alternative Organizational Structures; Technology and Innovation – How Much is Enough? How much is too much? The Future of the Real Estate Enterprise. Each session shall focus on a particular topic and shall be hosted by a guest speaker from the professional community who is an expert resource person on that topic.

Prerequisite: 246A and four additional electives in real estate or related areas (minimum 2 in real estate), or permission of instructor.

The purpose of this course is to equip real estate professionals, including developers, corporate owners, real estate analysts and banking and finance personnel engaged in purchasing, selling, appraising, evaluating, analyzing and lending on and developing real property with the basic tools that they need to understand the primary elements of a commercial real estate transaction in California. The class will also cover in detail, as well as the complete function of, the drafting and use of the various legal and financial documents that underlie the transaction.

The course is intended as an introduction to Corporate Real Estate Management (CREM). While extensive, this course is far from a comprehensive view of this very large subject. The course will introduce CREM and its many facets, once successfully completed the student will be able to appreciate the role of CREM, its impact on global society, its importance to both the real estate community (accounting for >70% of all real estate activity nationally) and corporations that it supports.

This is a “non-Center for Real Estate” elective that qualifies for one of the 3 required electives to earn an MBA Immersion in Real Estate.

Venture Capital (VC) and Private Equity (PE) constitute the so-called “alternative” asset class as opposed to conventional investments in stocks, bonds and commodities. Many start-ups and entrepreneurial firms require substantial capital. Bank loans and other conventional debt financings are unlikely due to high risk and uncertain prospects. Venture Capital and Private Equity organizations finance these high-risk but potentially high reward companies. In this course, through a combination of lectures and case studies, students learn how VCs and PE firms raise funds, evaluate the potential opportunities and make investment decisions. Almost all start-ups initially have negative cash flows. Further, these digital platform-based companies keep their profit margins intentionally low, so as to gain market share and/or disrupt existing players and markets. This further compounds the negative cash flows. Often cash flows remain negative year-in year-out. Traditional valuation models such as discounted cash flows (DCFs) do not properly address these issues and evaluate the true potential of these businesses. In this course, we will explore the types of models VC firms use to analyze and value these businesses. We will also explore the leveraged buyout (LBO) models and how PE firms use mezzanine financing and use of warrants to make deals and investment decisions.

*Exceptions may apply if a candidate has taken a real estate course that is not currently offered and was offered in previous years.