Real Estate Finance and Investments
With the Certificate in Real Estate Finance and Investments, students will be well prepared to confidently pursue a career in commercial lending and real estate finance.
Real estate markets are now highly competitive and companies often rely on well-trained workers capable of making investment decision in an environment of complexity.
For investors, intermediaries and other real estate players to remain successful, building experience in an exceedingly specialized market has become a must.
With this Certificate, you will receive an excellent training that allows you to learn thoroughly the new trends and techniques in the field of real estate finance and investments.
Practice the valuation of revenue generating properties by applying sound asset pricing methods and using Excel to perform pro-forma analysis
Learn how to design mortgages that meet the needs of different investors
Practice the pricing of mortgage debt when default and prepayment are possibilitie
Make optimal refinancing decisions
Understand the implications of leverage in real estate
Understand the implications of different capital structures in real estate assets
Model sophisticated real estate “waterfall” spreadsheets with Excel for a variety of different capital structures and scenarios
Introduction to Real Estate Valuation
In this module, we will discuss how the real estate system relates to investment analysis of commercial property. Emphasis will be put on understanding the determinants of real estate yields (cap rates) through a series of exercises revising historical series and macroeconomic events. After this initial introduction, we will review the basic formulas and procedures for converting typical real estate future cash flows and risk patterns to present value. In doing so, we will use both Excel and the financial calculator for finding numerical solutions. Finally, we will review the convenience of using the CAPM formula in real estate valuation, and practice some basic techniques to measure diversification and arbitrage in real estate investments.
Commercial Mortgage Debt
The real estate debt market is a large, deep and sophisticated source of funding that requires a rigorous modelling and quantitative analysis. In this module, we will introduce the basic concepts and methodology useful for dealing with real estate debt from the investor’s perspective. We will use Excel to compute mortgage payments and balances for a variety of loan types, compute mortgage yields to evaluate mortgages, and model the implications of refinancing and prepayment decisions. This module will also review the basic real estate investment model, which is a necessary step towards the understanding of a more sophisticated analysis of real estate investment decisions including multiple layers of debt and equity. Module III will address this extension.
Real Estate Equity Investments & Capital Structure
This module moves beyond debt to consider sophisticated capital structures with multiple layers of debt and equity. We will extend the setting used in the previous module to construct “water falls” Excel spreadsheets to model a variety of situations, including private equity investment and distress commercial real estate debt. This module relies heavily on case studies. At the end of this module, students will be able to create sophisticated Excel spreadsheets and run sensitivity analyses covering the whole spectrum of real estate finance decisions.