Quantitative methods for analyzing equity investment in real estate, primarily larger income-producing properties. The analysis includes the effects of financial leverage, income taxes, and unique selling strategies on investment performance. Students determine investment decisions for several potential purchases as well as a current portfolio property. REIT portfolios are also discussed.
Athena Title
Real Estate Investment
Equivalent Courses
Not open to students with credit in REAL 7600, REAL 7810
Prerequisite
REAL 4000 or REAL 4000E or REAL 4000H
Semester Course Offered
Offered every year.
Grading System
A - F (Traditional)
Student learning Outcomes
By the end of the course, students will be able to evaluate the performance of real estate investments by computing and interpreting periodic, multi-period, and continuous investment returns using time-value-of-money methods.
By the end of the course, students will be able to assess the impact of financing decisions on real estate investment performance by analyzing the effects of leverage on equity returns and applying mortgage financing concepts and calculations.
By the end of the course, students will be able to evaluate the tax implications of real estate investment decisions by computing after-tax cash flows under the U.S. income tax code.
By the end of the course, students will be able to analyze the financial feasibility of income-producing properties by constructing multi-year pro formas and evaluating investment performance using net present value analysis.
By the end of the course, students will be able to evaluate publicly traded real estate investment opportunities by analyzing the structure, earnings measures, and investment characteristics of REITs.
Topical Outline
Investment Fundamentals
Present Value Mathematics for Real Estate
Measuring Investment Performance
Net Present Value
Discounted Cash Flows
Leverage
Income Taxes
Financial Modeling
REITs
Institutional Competencies Learning Outcomes
Analytical Thinking
The ability to reason, interpret, analyze, and solve problems from a wide array of authentic contexts.
