Syllabus

Course Meeting Times

Lectures: 2 sessions / week, 1.5 hours / session

Recitations: 1 session / week, 1.5 hours / session

Course Description and Objectives

This half-semester course introduces and surveys the major public capital market real estate vehicles, REITs and MBS (with primary emphasis on CMBS). Some background is also included in basic modern portfolio theory and equilibrium asset pricing. This course is primarily designed to provide MSRED students with a basic introduction to the public capital market sources of financial capital for real estate, and how those markets value such capital investments. Students can take 11.432/15.427 without having taken 11.431/15.426 provided they have taken 15.401. Such students may have to do some review of the real estate terminology presented in the earlier course if they are not already familiar with basic real estate finance and investment terminology (see the "Key Terms" listed in the backs especially of Chapters 1, 9, 11, 14, and 16-18 of the text).

Sloan and other students taking this course as an elective should understand that this is a required course in MITs MSRED program core and, as such, is taught as a "core" subject. That is, a large body of material is covered in a short amount of time, aimed at students who do not necessarily have much finance background. This precludes primary reliance on the case method (though there are some cases). The course reflects the rather quantitative nature of the subject matter (i.e., the course features intensive lectures presenting large quantities of analytical material).

Administration

In addition to twice-weekly lectures taught by the primary instructor (or Case Instructor), there will usually be weekly recitation periods run by various members of the teaching staff (and sometimes guest speakers). The course will include several case assignments or exercises, generally due during class. Recitations may also be used for guest lectures from industry leaders and for review of lecture material.

Grading

The grade will be based on three written group assignments (cases or "case-like" exercises). Grading will be done by the teaching assistant and late assignments will not be accepted. Overall course grading will be approximately as follows:

ACTIVITIES PERCENTAGES
REIT and CMBS cases (total) 80%
Portfolio exercise 20%

Required Text

Amazon logo Geltner, David M., Norman G. Miller, Jim Clayton, and Piet Eichholtz. Commercial Real Estate Analysis and Investments. Cincinnati, OH: South-Western Educational Publishing, 2007. ISBN: 9780324305487.