Real Estate and Capital Markets

Catalog description

Analysis of publicly-traded real estate of both the equity, (REITs) and debt (MBSs) sides. The course also provides international perspectives. FIN 470 / RM 470 Real Estate and Capital Markets (3) The objectives of this course are to expose the student and explore the issues associated with the analysis of "public" ("Wall Street") real estate, including both equities (such as Real Estate Investment Trusts or REITs) and debt vehicles (such as Mortgage-Backed Securities or MBSs). In addition, the course will focus on the increasingly globalization of real estate capital markets as the real estate sector becomes integrated into the global financial system. The differences between private and public real estate analysis will also be explored, including the suitability of traditional asset pricing models for real estate analysis. Topics include the growing impact of institutional real estate forces on the real estate sector, the use of modern financial economics methods to real estate including the concept of market efficiency, modern portfolio theory applications, market measures of risk and return, the use of option-based models, and other advances. The rise of Wall Street's interest in real estate securities is an important institutional development and serves as the underlying background for the analysis of MBSs using fixed-income security techniques. As globalization has spread, the real estate sector has moved with these changes and prospects for a global real estate market are examined and evaluated. This course serves as a compliment to FIN 460 , which emphasizes traditional financial analyses of individual real estate projects. In FIN 470 , real estate securities are viewed as a natural extension towards the complete integration of real estate and capital markets. In this sense, these courses will enable traditional and modern analyses of the real estate sector for years to come.