Master Class in Real Estate Investment

Master Class in Real Estate Investment

Our capstone course, the Master Class in Real Estate Investment, is unique among business schools.  The class is a mix of cases, guest speakers, and real-world projects sponsored by top companies such as Equity International, ING Clarion, JP Morgan Chase, Lehman Brothers, McKinsey, Morgan Stanley, Starwood Capital, and Tishman Hotels.

Will be taught by Professor Chris Mayer in Spring 2009

For the handout used in the information session on October 31, 2007 (contains shortened course description, 2008 Syllabus in Brief, and Spring 2007 Projects), click here

Course Prerequisites
Course Description
Course Expectations and Requirements
Groups Projects
Spring 2008 Session Topics
Spring 2007 Projects (click to open pdf)
Spring 2008 Projects (click to open pdf)

Course Prerequisites

Students wishing to enroll in the Master Class MUST fulfill two prerequisites prior to enrolling in the Master Class: Real Estate Finance (B8314) - offered in the Fall and the Spring - and Real Estate Transactions (B8158) - offered only in the fall. No exceptions will be made.

Real Estate Capital Markets (B8399-005) – offered in the fall – or previous real estate experience is highly recommended.

Course Description

The Master Class in Real Estate Investment explores the variety of forms of value creation in real estate investment and development, both domestic and international, through a combination of cases, sessions with industry leaders, and a sponsored group project. It is the capstone course in the MBA Real Estate Program, providing students with an excellent opportunity to examine complex real estate transactions in greater detail. This Master Class helps students develop advanced decision-making skills to solve real estate business problems in realistic and complex settings. The class has three primary modes of instruction:

• Assigned cases that apply advanced skills to real world problems
• Faculty lectures and guest speakers who present solutions to cases and discuss key managerial challenges; and
• A Group Project presenting a new business idea, an investment concept, or a solution to a problem for an existing business
  

Students who take the Master Class will develop analytic and presentation skills (both written and oral) in a real world, business-oriented setting with constant feedback. Classroom discussion is an integral part of the class. An important theme that will recur throughout the course is the creation and measurement of value in real estate. The class will examine this theme in many contexts, from development to fund management to financial engineering. One point of view is real estate investment management, the business of investing third-party funds in real estate assets and securities. This course will examine fundamental assumptions, basic methods and various forms from the perspective of both institutional investors and investment managers. Another equally important perspective is that of globalization and securitization in real estate and the capital markets, which have accelerated rapidly in recent years. These topics raise a complex array of macro and micro issues in investment decision-making and finance. This Master Class is also designed to challenge and allow students to integrate concepts learned throughout the MBA curriculum, especially in previous MBA real estate courses. The class will draw significant input from the real estate community, with participation from guest speakers and alumni mentors.

Course Expectations and Requirements

The course is designed to mimic the real world by focusing students on the analytical and critical skills needed to make real estate decisions in light of uncertainty and complexity.  Students will work both as individuals and in teams throughout the term. Students will prepare for each class by completing the assigned reading and written or oral assignment, if any. In addition, students will be working on the Group Project throughout the entire term.

Students are expected to do all the assigned reading prior to class. Students should use name cards and sit in the same seat at least for the first month of the semester. There will be both warm and cold calling to ensure a lively discussion with the full participation of the class each week.

Grading is based on three major components:

1. Class participation (33%).  A major element of the course is the quality of interaction with the faculty, with each other and with the extremely talented group of outside speakers. To maximize the learning experience, the class has to be present, prepared and engaged.  You will be expected to send an e-mail to both professors if you expect to miss any class.  While the pressures of recruiting can lead to some absences, repeated absences (and any absences without notification) will be penalized. 
   
   
2. Written work and/or oral presentations (33%): Preparation for each class may include a short written paper not to exceed one single-spaced page (plus exhibits if necessary), an analytical assignment, or an oral presentation. The written work must be completed individually, but can be discussed with others. Each student must complete 8 of the 16 written assignments.
   
   
3. Group Project (33%): Each team will hand in a written report and also make an oral/power point presentation. The team assignment can be completed in groups of 3-4 people; teams may not exceed 4 people under any circumstances.
   
   

Group Projects

Work on the Group Project will begin immediately with the start of the semester. Students will form teams of 3-4 colleagues.  Projects will focus on a new business idea, an investment concept, or a solution to a problem for an existing business. 

What makes a good project?  Projects should take one of the following two forms:

1)    Business plan to start a new business or restructure an existing business. The typical business plan will include a description of the product, why it fills a market need, a market analysis (including potential competitors), and a pro forma showing market rollout and financing.  Successful businesses might be development ventures or a new idea for an investment fund.  These projects can be US or global.

2)    Project for an existing business.  Teams might work with existing businesses to develop a project.  A project must be supported by a senior member of the cooperating business.  Projects might include positioning/repositioning an existing asset, company or line of business, starting a new development project or a restructuring or recapitalization plan.  If this involves a property, it is essential to make future projections and develop a financial plan for the project.  The faculty will work with existing businesses to develop possible projects prior to the beginning of the term.

Examples of possible projects:

• Expanding a Fund’s investment strategy into a new market;
• An evaluation of two competing value-added investment opportunities in different markets;
• Structuring a development deal;
• Proposing and structuring a public to private transaction.

Teams have two choices.  They can choose among projects developed by faculty with alumni or senior industry experts or develop their own projects.  Faculty-developed projects will be available at the beginning of the term.  If students want to develop their own project they must put together a short written proposal and obtain permission from an outside sponsor.  The project must be approved by faculty prior to the beginning of the term.  Students are encouraged to develop their own projects—previous student-initiated projects have been quite successful.

Project updates will be presented to both the class and the faculty periodically throughout the term.  At the end of the term, a select number of final presentations will be made to a panel of distinguished real estate professionals as part of the Seevak competition.  The winners of the Seevak competition will receive visibility among alumni and judges and cash prizes.

Spring 2008 Session Topics

Session	Date	Topic
1	W 01/23	Industry Framework and Introductions
2	M 01/28	Value Creation and Valuation
3	W 01/30	Real Estate Investment Management
4	M 02/04	Capital Structure and Recapitalization
5	W 02/06	Private Equity Fund Structure
6	M 02/11	Real Estate Development
7	W 02/13	Real Estate Operating Companies
8	M 02/18	Investment and Development in Emerging Markets: China
9	W 02/20	Global Real Estate Opportunity Funds
10	M 02/25	Investment and Development in Emerging Markets: India
11	W 02/27	Anatomy of a Complex Transaction
12	M 03/03	Investment and Development in Emerging Markets: Latin America
No classes	on	Wednesday 03/05, Monday 03/10 and Wednesday 03/12
13	M 03/17	Convergence of Public and Private Investment Management Models
14	W 03/19	Privatization of Public Real Estate Companies
15	M 03/24	Global Platform Investing
16	W 03/26	Group Project: Update
17	M 03/31	Cross Border Valuation and Partnerships
18	W 04/02	Public Debt Securities Markets
19	M 04/07	Hybrid, Specified , Public and Hedge Funds
20	W 04/09	Wrap Up
21	M 04/14	Group Project: Presentation
22	W 04/16	Group Project: Presentation
23	M 04/21	Panel of Real Estate Industry Leaders
24	W 04/23	Seevak Competition

For the handout used in the information session on October 31, 2007 (contains shortened course description, 2008 Syllabus in Brief, and Spring 2007 Projects), click here