MASTER SYLLABUS
INSTITUTION: San Francisco State University (SFSU) – Undergraduate – Ver. 1.0
COURSE: FIN 372: Commercial Leasing and Development – Class Number 3686
TEXT/GUIDE: Real Estate Finance and Investments (REFI), 15th
Edition
www.mhhe.com/bf15e William B. Brueggeman and Jefffrey D. Fisher
ISBN: 978-0-07-337735-3
McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121
SFSU Book Store: Text Book (http://ucorp.sfsu.edu/bookstore)
http://www.amazon.com/Estate-Finance-Investments-William-
Brueggeman/dp/007337735X/ref=sr_1_sc_1?ie=UTF8&qid=1453704678&sr=8-1-
spell&keywords=brueggemand+and+fisher
Finance for Real Estate Development (FRED) Charles Long
ISBN: 978-0-87420-157-4
Real Estate Devvelopnent: Principles and Process (REDP), 5th
Ed. Mike Miles, Laurence M. Netherton, and Adrienne Schmitz
ISBN: 978-0-87420-343-1
Urban Land Institute, 1025 Thomas Jefferson Street, NW, Suite 500 West,
Washington, DC 2007-5201
Calculators:
Texas Instruments (TI BAA II) –
(http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-
keywords=TI+BAII+Plus88)
HP 10bII+ Financial Calculator (NW239AA)
http://www.amazon.com/HP-10bII-Financial-Calculator-
NW239AA/dp/B0002ABA8E/ref=sr_1_fkmr0_3?ie=UTF8&qid=1422248142&sr=
8-3-fkmr0&keywords=TI+BAII+Plus88)
Serial Number: PG5GP9PPPGRC88 http://tobsefin1.swlearning.com
INSTRUCTOR: Professor Lawrence A. Souza, CRE/FRICS/CCIM
Principal – Real Estate and Financial Economist/Advisor, Johnson/Souza Group
Senior – Investment Economist/Advisor – Pillar6 (101 California St. SF CA)
Email: [email protected] Website: www.pillar6.com
Cell: 415-713-0213 Home Office/Fax: 650-290-8189
Work E-mail: [email protected]
SFSU E-mail: [email protected]
Website: www.the-commercial-group.com
Office: SCI 308 Office Hours: Mon/Wed/Fri 11:00 am to 12:00 pm
MEETINGS: Monday, Wednesday and Fridays Start January 27th - Final May 17th (15),
10:10 – 11:00 AM
Last Day of Instruction + Oral Exams + Valuations.
Meeting Room: Business Administration Room 222
1600 Hollow Avenue, San Francisco CA 94132.
2
OFFICE HOURS: By Appointment (1600 Holloway Ave, San Francisco CA 94132)
11:00 am to 12:00 pm In Class Room and SCI 308
Phone Number During Office Hours: (415-713-0213)
Cell Phone: (415-713-0213)
RESOURCES: Research/Library: The J. Paul Leonard Library
Web Site: www.library.sfsu.edu
Department of Finance: SCI 300 Phone: 415-338-1107
Website: http://cob6.sfsu.edu/finance
Email: [email protected]
Tutoring Support/The Learning Assistance Center (LAC): Offers tutoring for
undergraduate SF State students in the following areas: reading, writing, math,
sciences and study skills for courses across disciplines. Tutors meet individually
and in groups with students in both lower and upper division courses, HSS 348,
open Monday through Thursday, 9:00 am - 4:00 pm, and Friday, 9:00 am - 12:00
am. (415) 338-1993 or www.sfsu.edu/~lac register and make appointments.
Students can find tutoring services offered by programs and departments.
Information at http://www.sfsu.edu/~lac/tutorsubject.html.
Undergraduate Advising Center: Administration Building 211
Current Student Advising: 415–338–2103. ORIENTATION Inquiries: 415-338-
3060/415-338-1304 E-Mail: [email protected]
Daily Quick Question hours (for CURRENT students only): 10am to 4pm M – Th
Advising Center is closed on Fridays (starting October 1st). The Advising Center
staff will be involved in projects and advising related activities across campus.
Writer’s Resources:
http://academics.smcvt.edu/cbauer-ramazani/BU113/memo_guide_citations.htm
http://www.csun.edu/bus302/Course/Communication/samplememo.pdf
http://grammar.ccc.commnet.edu/grammar/
http://bcs.bedfordstmartins.com/writersref6e/Player/Pages/Main.aspx
http://www.ggu.edu/libraries
http://turnitin.com/
http://www.merriam-webster.com/
Business Writing Tutorial/Guidelines
http://www.spellchecker.net/spellcheck/
http://www.spellchecker.net/grammar/
http://office.microsoft.com/en-us/word-help/check-spelling-and-grammar-
HP010354279.aspx
http://video.search.yahoo.com/search/video?p=Business+writing+videos
http://www.youtube.com/watch?v=oDTPxMBemDM&noredirect=1
Memo Writing Guidelines:
http://www.ehow.com/video_4790516_write-formal-business-memo.html
http://academics.smcvt.edu/cbauer-ramazani/BU113/memo_guide_citations.htm
http://www.lupinworks.com/roche/pages/memos.php
3
Review Courses:
Macroeconomics (http://www.youtube.com/watch?v=d8nDkLExqDg)
Monetary Policy (https://www.youtube.com/watch?v=_SpIaGTq0u8)
Microeconomics: (http://www.youtube.com/watch?v=8FVblgewNBE)
Statistics: (http://www.youtube.com/playlist?list=PLE67E2A377F60E85A)
Advance Probability/Statistics:
(https://www.youtube.com/watch?v=0P5WRKihQ4E&list=PLY2SK_8yBO17t1k0
bT--3AHIfPieLi1oW)
Multiple Regression: (https://www.youtube.com/watch?v=AkBjJ6OunR4)
Calculus: (https://www.youtube.com/watch?v=CtRAHmeWSC0)/(
https://www.youtube.com/watch?v=fYyARMqiaag&list=PLF797E961509B4EB5)
Matrix/Linear Algebra: (https://www.youtube.com/watch?v=T_aiofOSWfI)/(
https://www.youtube.com/watch?v=xyAuNHPsq-
g&list=PLFD0EB975BA0CC1E0)
Time-Series Forecasting: (https://www.youtube.com/watch?v=EaqZP36ool8);
(https://www.youtube.com/watch?v=k9dhcfIyOFc);
(https://www.youtube.com/watch?v=FUmMucmQzZM);
(https://www.youtube.com/watch?v=zlZaOnBbpUg&list=PL436A4F939FBE10D7)
; (https://www.youtube.com/watch?v=f9tyljdHQaA);
(https://www.youtube.com/watch?v=F3Kjdz4K7vE&list=PL1A0EF77860E94EB3)
Econometrics: (http://www.youtube.com/course?list=ECFB79C7150CFA622E)
Computational Finance and Financial Econometrics:
(https://www.youtube.com/watch?v=Ouu86i3DE0)/(
https://www.youtube.com/watch?v=XTkpdkWVfOU&list=PL58gEE9UNSimFCR
_z068GIGi88wc8Momp)
Quantitative Finance: (https://www.youtube.com/watch?v=vZXCq2fn-
Z0&list=PL8DC1113ADB63358E)/
(https://www.youtube.com/watch?v=vTs2IQ8OefQ&list=PL3F00F1C2D402D45C)
Quantitative Data Analysis:
http://video.search.yahoo.com/search/video?p=Quantitative+Data+Analysis+Video
Discounted Cash Flow Analysis (DCF):
(https://www.youtube.com/watch?v=jfcRUzKZZE8)/(
https://www.youtube.com/watch?v=gLUlP6jyFvE)/(
https://www.youtube.com/watch?v=XTBfH1MbxPE)/(
https://www.youtube.com/watch?v=bkkrJJHFz2g&list=PL5hdd9oiuWS_zICz2Qp7
N6wwp1__qce27)/( https://www.youtube.com/watch?v=83yR6EFEl5Y)
4
Financial Accounting: (http://www.youtube.com/watch?v=cZZ_LF1NxgI)
Financial Statement Analysis: (http://www.kgaction.com/financial-statement-
analysis/introduction/)
Financial Ratio Analysis: (https://www.youtube.com/watch?v=XnL6Gom7N3w)/(
https://www.youtube.com/watch?v=_43qbh8Bzwk)/(
https://www.youtube.com/watch?v=TZZFBkbC2lA&list=PLE762D7C2878F4C8A
)/( https://www.youtube.com/watch?v=Ri0XfJuru8s)
Commercial Real Estate Leasing:
https://www.youtube.com/results?search_query=Commercial+Real+Estate+Leasing
Commercial Real Estate Asset Management:
https://www.youtube.com/results?search_query=commercial+real+estate+asset+ma
nagement
Commercial Real Estate Development:
https://www.youtube.com/results?search_query=Commercial+Real+Estate+Develo
pment%3A+
Commercial Real Estate Valuation:
https://www.youtube.com/results?search_query=Commercial+Real+Estate+Valuati
on
Commercial Real Estate Finance:
https://www.youtube.com/results?search_query=Commercial+Real+Estate+Finance
%3A+
Real Estate Investment Trusts (REITs):
https://www.youtube.com/results?search_query=Real+Estate+Investment+Trusts
https://www.youtube.com/results?search_query=Valuing+Real+Estate+Investment
+Trust+Securities
Commercial Mortgage Backed Securities (CMBS):
https://www.youtube.com/results?search_query=Commercial+Mortgage+Backed+S
ecurities+%28CMBS%29
https://www.youtube.com/results?search_query=Valuing+Commercial+Mortgage+
Backed+Securities+%28CMBS%29
5
PREREQUISITES: ACKNOWLEGEMENT TITLE V. Article 2. Standards for Student Conduct
http://conduct.sfsu.edu/conduct/standards
Students are expected to be good citizens and to engage in responsible behaviors
that reflect well upon their university, to be civil to one another and to others in the
campus community, and contribute positively to student and university life.
Acceptance and acknowledgement of this Syllabus
stipulates that you understand and will adhere to the
standards spelled out under Title V. Article 2
Statement on Cheating and Plagiarism
Cheating is the actual or attempted practice of fraudulent or deceptive acts for the
purpose of improving one’s grade or obtaining course credit; such acts also include
assisting another student to do so. Typically, such acts occur in relation to
examinations. However, it is the intent of this definition that the term ‘cheating’ not
be limited to examination situations only, but that it include any and all actions by a
student that are intended to gain an un-earned academic advantage by fraudulent or
deceptive means. Plagiarism is a specific form of cheating which consists of the
misuse of the published and/or unpublished works of others by misrepresenting the
material (i.e., their intellectual property) so used as one’s own work. Penalties for
cheating and plagiarism range from 0 or F on a particular assignment, through an F
for the course, to expulsion from the university. For more information on the
University’s policy regarding cheating and plagiarism, refer to the University
Catalog (‘Policies and Regulations’).
Statement on Services for Students with Disabilities
Americans with Disabilities Act (ADA) Accommodations: The University is
committed to providing reasonable academic accommodations to students with
disabilities. The Disability Programs and Resources Center provides university
academic support services and specialized assistance to students with disabilities.
Individuals with physical, perceptual, or learning disabilities as addressed by the
Americans with Disabilities Act should contact Services for Students with
Disabilities for information regarding accommodations. Please notify your
instructor so that reasonable effort can be made to accommodate you. If you expect
Accommodation through the Act, you must make a formal request through
Disability Programs & Resources Center in SSB 110, Telephone 338-2472.
PLEASE SUBMIT PREREQUISIT GRADES WITH PRE-TEST
FIN 350: Business Finance. Sources, methods, and instruments used by
firms in obtaining and utilizing funds, in domestic and international
markets, for short- and long-term operations, designed to maximize
shareholders' wealth.
6
ACCT 100: Introduction to Financial Accounting. Objectives, basic
theory, principles, and methods of financial accounting. Reports as a
framework for decision-making. Measuring and reporting financial position
regarding income, costs, and revenue.
ACCT 101: Introduction to Managerial Accounting. Use of accounting
information to plan and control an organization's financial activities.
Processes used to plan and control costs and expenditures. Quantitative
techniques used to evaluate alternative choices.
ECON 101 Introduction to Microeconomic Analysis: Basic analysis of
prices and markets; consumer behavior; behavior of the firm; factor
markets. [GE].
ECON 102 Introduction to Macroeconomic Analysis: Basic economic
methodology, analysis, and policy; economic institutions, organizations, and
industrial structure; the monetary system; measurement, determination, and
stability of national income; monetary, fiscal, and balance of payments
problems and policies. (Formerly ECON 100.) [GE].
MATH 70 Algebra II: Algebra II course in graphing linear, quadratic,
exponential, and logarithmic functions and in solving quadratic equations,
equations involving rational expressions and radicals, and linear systems of
equations.
DS/MATH 110 Business Calculus: Functions, derivatives, and integrals.
Applications of differentiation and integration, including optimization and
moving averages. Problems involving business, finance, and economics.
Elements of basic calculus. (Plus-minus letter grade/NC grading only).
DS/MATH 212 Business Statistics I: Statistical methods essential in
solving business problems including probability distributions, estimation
and tests of hypotheses, and regression analysis or
DS/MATH 226 Calculus I: Differentiation: theory, techniques, and
applications. Integration: Fundamental Theorem of Calculus and
applications. Transcendental functions. (Plus-minus letter grade/NC grading
only).
DS/MATH 199 Pre-Calculus: Functions, graphing techniques,
exponentials and logarithms, trigonometry.
ISYS 263 Introduction to Information Systems: Application of
information systems (IS) in a business environment. Topics include
information technology (IT), networks and internetworks, types of
information systems and their development, problem solving using end-user
tools, and social impact of IT.
7
Other Courses: Not required but valuable. Advance Financial and Managerial
Accounting for Management Decision-Making; Principals of Microeconomics,
Macroeconomics, and Monetary Policy; Capital Markets and Budgeting,
Investments and Financial Institutions; Derivatives and Quantitative Finance,
Calculus, Elements of Statistics for Business and Economics, Econometrics and
Quantitative Data Analysis.
**** Understand/Read Syllabus: SFSU Standards of Student Conduct. This is your acknowledgement that you have reviewed and understand the syllabus
requirements and the standards of academic integrity, and that you are responsible
for these requirements and standards reflected by your acceptance of this syllabus.
No Cell Phone Use, No Computer Use
Other Than Note Taking, In Class Online Research
No Texting or Checking Phone for Email, Facebook, Etc.
PHONE: At Work from 9:00 AM to 5:00 PM Monday - Friday
Cell: (415) 713 - 0213
E-MAIL/WEBSITE: [email protected] (Identify the Class and Name in Subject Line)
www.the-commercial-group.com (See Resources page)
Course Description
FIN 372 – R1 – Commercial Leasing and Development. Application of acquired classroom knowledge
to a real-world commercial leasing case addressing the financial challenges of a redevelopment case that
has evaded a financial resolution for nearly 20 years. Focus on components of the proposal such as the
entitlement process, leasing, financial management, investor financing, and sustainable business issues.
Real estate financing from the viewpoint of borrower and lender, financing mathematics, legal aspects of
lending, appropriate financial instruments, taxes and real estate, loan cost analysis, loan valuation,
development and assumability. Mortgage markets/institutions considered together with alternative
financing techniques for various types of properties.
This course is also a foundation course for future course work in corporate finance, trading strategies and
structured finance, intermediate financial management, financial institutions, financial statement analysis,
capital budgeting, long-term financing, working capital management, bank and thrift management,
derivatives and financial engineering, portfolio management, venture capital, and real estate finance,
investment analysis and valuation/appraisal.
Other topics discussed include efficient market theory; risk and return analysis for stocks, bonds and cash
equivalents; modern portfolio theory; asset pricing models; bond pricing and the term structure of interest
rates; effects of taxes and inflation on investment choices; and derivative asset-liability analysis.
Memos, mini-reports/homework, case analysis and exams are used for academic and professional skills
development.
8
Course Goals, Objective and Topics of Discussion
FIN 372 Business Finance is an undergraduate level course in real-world commercial real estate leasing,
financing, and development; and focusing development and the entitlement process, leasing, financial
management, investor financing, and sustainable business issues.
This course is modeled after courses developed and delivered at top universities across the U.S.: Stanford,
USC, Harvard, Wharton, UC Berkeley, MIT, Chicago, Columbia, NYU, London School, etc.
This course is a foundation course for future course work in corporate finance, trading strategies and
structured finance, intermediate financial management, advanced financial institutions, financial statement
analysis, capital budgeting, long-term financing, working capital management, bank and thrift
management, derivatives and financial engineering, portfolio management, venture capital, and real estate
finance, investment analysis and valuation/appraisal.
This course will focuse on contemporary real estate financial institutional analysis and management, based
on a solid foundation in macroeconomics and and monetary policy, corporate finance theory, financial
products and applied techniques using standardized exchanged based and Over –the- Counter (OTC)
financial products used for investment, financial institution portfolio construction and asset-liability
management, structured product development and application, trading and liquidity needs by financial
economists, managers, traders and analysts, and instituaitonl managers.
This course will also intuitively look at how to integrate the interrelationships between business and
financial economic conditions into interest and discount rate determination, (intrinsic) asset valuation and
price forecast methods, and anticipated and unanticipated effects of (global) fiscal and monetary policy
and events on short-term and long-term investment and portfolio allocation and trading decisions, and
how financial institutional managers manage these risks in real time on a global basis.
Topics recommended for additional study beyond course content are: global political philosophy and
economy, financial institutional accounting and financial analysis, market failures policy responces, and
short- long- term implications on capital market structures, efficiency, development, and allocative
impacts on the real economy, socio-demographic segments and geography.
These factors have a direct and indirect impact on the ability to manage the asset and liability side of a
financial institutions balance sheet and income statement, raise debt and equity funds in the capital
markets at minimum cost to borrowers and risk to investors, timing of capital issuance, allocation of funds
among short- and long-term durations, working capital and cash management techniques, asset and
product capital budgeting decisions, long-term capital structuring in volatile markets, corporate and
government fixed-income securities analysis, and dividend and leverage policy.
The text for this course has been used for years, and it is recccomended that those interested in a career in
merchant or commercial banking pursuing the Chartered Financial Analyst (CFA) designation (CFA
Institute - https://www.cfainstitute.org/pages/index.aspx http://www.cfasanfrancisco.org/).
Requirements for the course include selected chapters while simultaneously working problems sets,
taking oral exams, reading current business and finance news (Financial Times --
http://ftepaper.ft.com/signin) Account Number: 2339074FTU1 Password: larrysft ; and/or Wall
Street Journal -- http://online.wsj.com/home-page); The Economist – www.economist.com Email:
9
[email protected] Password: Professor1961; and writing memos forecasting stock,
bond, real estate, commodities or other alternative assets trading in the capital markets, and making
porfoilio and trading recommendations for institutional and retail clients to maximize risk-adjusted rates
of return based on suitibilty.
It is also recommend that you go to the following websites and register with them to receive their email
distributions on the latest macroeconomic and stock/bond market articles: 1) Seeking Alpha
(http://seekingalpha.com/) and Global Association of Risk Professionals – GARP
(http://www.garp.org/?sctp=PPC&scvn=Google&scsrc=Google_Search&sckw=garp&utm_source=
Bing&utm_medium=Paid_Search&utm_term=garp&utm_campaign=TGW_Spring_Reg#!/home)
This course is an introduction to real estate, financial systems, analysis, instruments and portfolio
management theory and its applications, but will also be keeping up and continuously applying relevant
current economic and capital market events, and their constant impact on changes in interest and discount
rates (Weighted Average Cost of Capital – WACC = Weighted Cost of Debt and Equity) and intrinsic
values of real and financial asset values.
The goal of this course is to give you the student a solid foundation in the core competencies and
applications in contemporary standardized and customized real estate finance and investments, financical
products, their development and innovatione, and financial economics and engineering; preparing you the
student for future graduate and post-graduate studies and professional approaches to:
Financial product design, trading and portfolio management; financial reporting and analysis;
Financial modeling and analytics;
Management control and information systems;
Capital budgeting and long-term financing;
Working capital and liquidity management;
Mergers and acquisitions;
Venture and private equity capital management;
Entrepreneurship in both the real and financial companies and institutions;
Financial strategy and firm level value creation;
Financial analysis of industries and competitors;
Investments; international corporate finance, institutions and capital markets;
Fundamental and technical securities analysis;
Derivative markets and structured instruments;
Financial engineering and quantitative risk management;
Advanced options pricing theory and derivative applications;
Modern and post-modern portfolio management;
Bank and thrift income statement and balance sheet management;
Tax, trust, insurance, annuities, investment and retirement planning;
Business valuation and financing; business strategy, marketing, and management;
Real estate finance, investments, development, and asset management.
Course discussions will include topics and try to answer answer questions such as:
What is the capitalist market system and how does it work compared to other global systems?
What affect does low/rising U.S./Global savings rates have on the capital markets?
How do monetary and fiscal policies affect the capital markets and capital market instruments?
10
What affect do federal deficits and national/corporate debt have on interest rates and required rates
returns, costs of capital, and discount rates?
What causes interest rates or yields for corporate and government debt to rise and fall?
How has the institutional framework of the financial system change through out the 70s, 80s, 90s, and
00s?
What are business, credit/capital market cycles? Fluctuations in interest rates and yield curves.
What are the capital markets? Debt, Equity, Commodities, Real Estate, Etc.
What is the definition of capital markets and how do you value capital market instruments?
What is the affect of inflation and disinflation expectations on capital market instruments?
What is financial, portfolio and asset-liability management, how is it used and who uses it?
What is financial innovation and risk management, and how do ou apply the tools available?
What is the definition, causes and measurement of volatility (risk in the capital markets)?
How do you measure expected/excess return on financial instruments?
What are risk-adjusted returns? Why are they important as a risk-averse investor?
How do you build and manage an institutional portfolio of public and private fixed-income, equity,
structured and standardized product, and alternative assets?
Specific Topics
Topics targeted for discussion in this course::
Statistical Review: Beta, Correlation, Covariance, Variance, Standard Deviation, Mean/Median
Forecasting Interest Rates/Discount Rates: Term Structure of Interest Rates and Yield Curve Theory
Financial Markets, Institutions, and Instruments (Macro/Micro Prudential)
Applied Financial Management (Corporate, Business, Finance, Marketing and Operations)
Analyzing Financial Statements (Income Statement, Balance Sheet, Cash Flow Statement)
Cash Flows, Management, and Liquidity (NOI, EBITDA, Earnings, Dividends)
Time Value of Money – Probabalistic Value Determination (Present and Future)
Stock, Bond, Real Estate, Commodity Price/Intrinsic Valuation (Bid-Ask Spreads)
Capital Budgeting/Discout and Growth Rate Determination – NPV/IRR/MIRR
Technical Trading Strategies, Systems and Execution
Other related topics include:
Weighted Average Cost of Capital (WACC)/Optimal Capital Structure (Minimum + M&M Theory)
Multinational financial management techniques (global capital markets, flows and currency)
The use of derivatives and risk management techniques (Futures, Forwards, Options, SWAPS)
Hybrid financing techniques (Structured Products and Convertibles)
Mergers and Acquisitions, Leverage Buy Outs (M&A/LBO), and Venture Capital
Taxes (Corporate and Personal)
Value –At- Risk (VAR) Determination and Heading Strategies
11
Course Design
FIN 372 Commerial Leasing and Development is designed to introduce undergraduate business
management and public administration, marketing and advertising, information systems and project
management, accounting and tax, economics, finance, banking and real estate majors for professional
careers in both direct (private) and indirect (public) financial and government institutions, and business
and entrepreneurial enterprises.
The course will be taught on three levels: 1) traditional management procedures and techniques
(homework and problems); 2) written exams in fundamental capital market, firm and securities product
analysis; and 3) mini case studies, memo reports and presentations/participation.
12
FIN 372-01: Commercial Leasing and Development
Spring 2016 Schedule: (16 Weeks) Mon/Wed/Fri 10:10 am –to- 11:00 am
Wed/Fri Jan 27th
/29th, 2016 (1): Introduction & Course Overview Course Introduction and Expections
Lecture: Statistics, Accounting, Finance, Macro-Econ Review
Assessment-Test: Statistics, Accounting, Finance and Economics
Chapter 1-2 (BF): Real Estate Investment: Basic Legal Concepts; Real Estate Financing: Notes
and Mortgages. Chapter 1 (REDP): Into to the Real Estate Development Process; and Chapter 1
(FRED): The Development Process.
Yield Curve Dynamics vs. Dynamic Yield Curves
Linked are three videos going over Yield Curve Dynamics and their affect on Discount Rates (Cost of Equity/Debt and
Weighted Average Cost of Capital (WACC). In almost all finance models, there is the risk-free rate (U.S. Treasury Yields on
bond of differing maturities). The risk-free rate (nominal interest rates) is the Real Interest Rate (RR) plus Inflation
Expectations (e*); this is the Fisher Equation. Yield curves move up and down based on changes in the RR and e*, but mainly
from e*. The short end of the yield curve is managed and manipulated by the Federal Reserve through Open Market Operations
(OMO). If the Fed sells bonds, bond prices go down, and interest rates go up; and if the Fed buys bonds, bond prices go up, and
interest rates go down. The Fed does this to regulate credit availability in the economy to stimulate or slow economic growth
and manage asset prices.
Yield Curve Dynamics I (https://youtu.be/tYBlZDigcKE)
Yield Curve Dynamics II (https://youtu.be/ldIe7DX5zeY)
Yield Curve Dynamics III (https://youtu.be/Ua8AGfuyAMk)
Go to Webpage and Click Animate!!!! This shows the dynamics of the Yield Curve over the Business/Stock Market Cycle:
http://stockcharts.com/freecharts/yieldcurve.php
Note: See Powerpoint Presentations and Articles posted to course website.
Mon/Wed/Fri February 1st/3rd/4th, 2016 (2):
Chapter 3-4 (REFI): Mortgage Loan Foundations: The Time Value of Money; Fixed
Interest Rate Mortgage Loans. Chapter 2 (REDP): The Raw Material: Land and
Demographics in the United States; and Chapter 2 (FRED): Basics of Real Estate Finance.
Pres-Test Due/Review
Assign Homework #1 Monday February 1st
Chapt 1: DQ: 1, 2, 4; Chapt 2: DQ: 1, 2,6, 9, 10, 11, 14, 16, 19. DP: 1, 2, 3, 4, 5. HWP: 5;
Chapt 3: DQ: N/A. DP: 1, 2, 3, 4. HWP: 12, 13, 18; Chapt 4: DQ: 2, 4, 5, 6, 7, 8, 11, 13,
13
14. DP: 2, 10, 11, 13. HWP: 15, 17, 19, A-3 Excel; Chapt 5: DQ: 4, 6. DP: 1, 2, 4, 5.
HWP: 11, 12, 13 Excel; Chapt 6: DQ: 2, 3, 7. DP: 1, 2, 3, 4. HWP: 6, 8, 9.; Chapt 7: DQ:
1, 4. DP 1, 3. HWP: 5, 6; Chapt 8: N/A
Note: Discussion Questions (DQ) In-Class, Discussion Problems (DP) In-Class, and Homework
Problems (HWP)– Due to Submit on Due Date.
Mon/Wed/Fri February 8th/10th/12th, 2016 (3):
Chapter 5-6 (REFI): ; Adjustable and Floating Rate Mortgage Loans; Mortgages: Additional
Concepts, Analysis and Applications. Chapter 3 (REDP): Developers and Their Partners; and
Chapter 3 (FRED): Land Valuation for Acquisition.
Memo I Due
Mon/Wed/Fri February 15th/17th/19th, 2016 (4):
Chapter 7-8 (REFI): Single-Family Housing: Pricing, Investment, and Tax Considerations;
Underwriting and Financing Residential Properties; Chapter 10 (REDP): Real Estate Finance:
Background; and Chapter 5 (FRED): Capital Markets for Real Estate.
Homework #1 Due Friday February 19th
+ Homework/Quiz I Review
Mon/Wed/Fri February 22nd/24th/26th, 2016 (5):
Quiz I: Chapters 1 – 8
Mon/Wed/Fri February 29th/March 2nd
/4th, 2016 (6):
Quiz I Review
Chapter 9-10 (REFI): Income-Producing Properties: Leases, Rents and the Market for Space;
Valuation of Income Properties: Appraisal and the Market for Capital. Chapter 11 (REDP): Real
Estate Finance: The Basic Tools; and Chapter 6 (FRED): Obtaining Finaning for Devvelopment.
Memo I + II Due
***Assign Homework #2***
14
Chapt 9: DQ: 1, 2, 3, 4, 5, 6, 7. DP: 1, 2, 3, 6, 7, 8. HWP: 10. Chapt 10: DQ: 1, 2, 3, 4, 5,
6, 7, 8, 9, 10, 11, 12, 13. DP: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 12, 13. HWP: 14, 15, 16; Chapt
11: DQ: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13. DP: 1, 2, 3. HWP: 4 Excel, 5.; Chapt 12:
DQ: 1–5, 6, 7–9, 10–12. DP: 1, 2, 5, 6, 7, 8. HWP: 3, 4, 9 Excel.
Chapt 13: DQ: 1, 2, 3, 4, 5, 6, 8. DP: 1, 2, 5. HWP: 3, 4 Excel; Chapt 14: DQ: 2, 4, 6, 7, 9,
10, 12, 16. DP: 1, 2, 3, 4. HWP: 5, 6, 7 Excel .
Mon/Wed/Fri March 7th/9th/11th, 2016 (7):
Chapter 11-12 (REFI): Investment Analysis and Taxation of Income Properties;
and Financial Leverage and Financing Alternatives. Chapter 13 (REDP): Stage Three: The
Feasibility Study. Chapter 4 (FRED): Task Management; Chapter 7: Developent Entity, Joint
Ventures, and Financing Structure.
Memo I + II + III Due
Mon/Wed/Fri March 14th/16th/18th, 2016 (8):
Chapter 13-14 (REFI): Risk Analysis; Disposition and Rennovtion of Income Properties. Chapter
15 (REDP): Construction. Chapter 8 (FRED): Managing the Entitlement Proess for Financial
Viability.
Memo I + II + III + IV Due
Mon/Wed/Fri March 21st/23
rd/25
th, 2016: SPRING BREAK!!!
Mon/Wed/Fri March 14th/16th/18th, 2016 (9):
Chapter 15-16 (REFI): Financing Corporate Real Estate; and Financing Project Development.
Chapter 8 (REDP): Decision Makers and Stakeholders, and Chapter 9: Stage One of the
Development Process. Chapter 10 (FRED): Chapter 10: How Developers Get Capital.
Homework #2 Due + Homwork/Midterm II Review
15
Mon/Wed/Fri March 28th
/30th
/April 1st, 2016 (10):
Mid-Term II – Chapters 9-15
Mon/Wed/Fri April 4th
/6th
/8th, 2016 (11):
Chapter 17-19 (REFI): Financing Land Development Projects; Structuring Real Estate
Investments: Organizational Forms and Joint Ventures; and The Secondary Mortgage Market:
Pass-Through Securities. Chapter 12 (REDP): Ideal Refinement, and Chapter 14: Contract
Negotiation and FormalCommitment. Chapter 14 (FRED): Task Management and Budgeting.
Homework #3 Assign + Midterm Exam Review
Chapt 15: DQ: 2, 3, 4, 5, 7, 8, 11, 14. DP: 1, 2, 3 HWP: 4 Excel; Chapt 16: DQ: 4, 14, 15.
DP: 1, 2, 3. HWP: 4 Excel; Chapt 17: D1, 2, 3, 4, 5. DP: 1, 2, 3. HWP: 4 Excel; Chapt 18:
DQ: 1, 2, 3, 4, 5, 6, 7, 8. 9, 10, 11, 12, 13, 14, 15. DP: 1, 2, 3. HWP: 4 Excel; Chapt 19:
DQ: 2/3, 4/5, 6/7, 9/8. 8, 11, 12. DP: 1, 2. HWP: 3 Excel;
Homework #4 Assign
Chapt 20: DQ: 1-3, 4-10. DP: 1, 2, 3. HWP: 4-7 Excel; Chapt 21: DQ: 4. DP: 1, 4. HWP:
3 Chapt 22: DQ 1- 12. DP: 1. HWP: 2; Chapt 23: SDQ: 1-10. DP: 1, 2, 3, 4. HWP: 5.
Mon/Wed/Fri April 11th/13th/15th, 2016 (12):
Chapter 20-21 (REFI): The Secondary Mortgage Market: CMOs and Derivative Securities; and
Real Estate Investment Trusts (REITs). Chapter 16 (REDP): Marketing, Sales, and Leasing and
Chapter 17: Property, Asset, and Portfolio Management.
Memo I + II + III + IV + V Review I
Mon/Wed/Fri April 18th/20th/22nd, 2016 (13):
Chapter 22-23 (REFI): Real Esate Investment Funds: Structure, Performance, Benchmarking, and
Attribution Analysis. Chapter 7 (REDP): The Role of the Regulatory Sector; Chapter 4: Colonial
Period to the Late 1800s; Chapter 6: The Modern Era: World War II to the Present; Chapter 18:
Prepairing for the Future.
Memo I + II + III + IV + V Review II
16
Mon/Wed/Fri April 25th/27th/29th, 2016 (14):
Assign Take-Home Final + Stock Valuation Case Studies (2):
REIT Stock Valuation Presentation Outline
Financial and Accounting Information
Homework #3 + #4 Due
Mon/Wed/Fri May 2nd
/4th
/6th, 2016 (15):
Group Oral Exams/Stock Valuation Presentations (I):
Kilroy, Inc./ PPT Presentation/Pitch Book Due
Mon/Wed/Fri May 9th/11th
/13th, 2016 (16):
Group Oral Exams/Stock Valuation Presentations (II):
Avalon Bay /PPT Presentation/Pitch Book Due
Mon May 16th
(17): 10:10 – 11:00 am
Last Day of Class:
- Course Review + Exite Lecture
- Deliverable #4 (Due)
o Cover Page
o Memos I – V (Due)
o Homework #3/#4 (Corrected Due)
o Take-Home Final Exam Ch 25-30
(Due)
o REIT Stock Valuation
Presentations (2) –
Edited/Bound/Published (Due)
17
Grading and Assignments
Homework and Exams
There will be assigned homework/memos, one quiz, midterm and comprehensive final exam.
Percent of
Requirements Total Grade Total Points
Memos (#1 - #5) (20 pts each) – Thesis State + Forecast
Homework (#1 - #4) (50 pts each) – Answer all bold questions
10.0%
20.0%
100
200
Quiz (Closed Book/No Notes or Computer) 15.0% 150
Midterm (Closed Book/No Notes or Computer) 25.0% 250
Written/Oral/Project Final/Presentations (Power Points, etc.) 30.0% 300
Course Total
Extra Credit: Individuel/Group Participation +
Statistical Pre-Test + Attendance
100.0% 1000
Course Grading Scale*: 1000 – 930 points = A 850 – 830 points = B 750 – 730 points = C 650 – 600 points = D
920 – 900 points = A- 820 – 800 points = B- 720 – 700 points = C- 590 & below = F
890 – 860 points = B+ 790 – 760 points = C+ 690 – 660 points = D+
*The scale reflects the total points needed to receive the above grade in this course.
Other Class Policies
The structure of this class makes your individual study and preparation outside class extremely important.
The lecture material will focus on the major points introduced in the text and/or other material. Reading
the assigned chapters before the lecture will assist your understanding. It is necessary that you
bring your Financial Calculator (HP10B/12C/Etc.) to every class and exam.
Written Assignment Guidelines Written assignments are to be typed, double spaced and spell and grammar checked. Assignments are to
be one –to- two pages long, with the article attached/pasted on a sheet of paper to the back of the memo.
For example, since November 2007 there has been reports from the Fed, Wall Street firms, financial
institutions, econometric and consulting firms, and other local and regional economic research firms
indicating that the economy has peaked, declined and is bottoming: negative or below trend GDP growth
rates, excess capacity utilization, de-or-dis inflation, contraction then rapid expansion in the money
18
supply, falling (rising) employment (unemployment) rates, negative-low employment growth rates,
falling-low retail sales, negative-low business investment, negative-low construction levels, negative-low
home building permits, starts and construction, etc.
You are concerned with this activity domestically and in an international context. Building your case with
these current or recently announced business and capital market condition indicators, explain where you
think inflation and interest rates (yield curve) are going, both long and short-term, and what affect they
will have on the bond, stock and real estate markets, and the ability to raise and invest capital in the
capital markets at a positive spread (IRR – WACC = +/- Spread).
These assignments require that you to copy, read and synthesize significant articles regarding economic
and capital market indicators for your (intrinsic) valuation/price analysis. You are required to attach these
articles to your analysis, and submit them with your analysis.
These articles should help you solve capital market and investment decisions. The goal of the written
assignments is for you to apply real life (applied) financial economic policy decisions surrounding asset
value, price, return and cost of capital , those similar to what a chief executive of a major firm would
make.
Full credit will be given to those assignments that successfully apply contemporary monetary and financial
policy analysis and theories, along with the Writing Guidelines. If papers do not meet these
requirements, at graduate level writing and presentation standards, they will be downgraded
significantly. Papers will be returned and will not be accepted until they have been gone through and
approved by the GGU Writing Center, meeting the minimum academic and business professional
writing requirements and standards.
Severe penalties will be applied to those papers lacking financial economic and capital market theory
logic. The student is encouraged to find mentors outside of the class to help them reach their writing
goals (Writing Center, Et.Al.).
WRITING EVALUATION GUIDELINES
1. Thesis
Is there a thesis statement?
Is there a controlling idea?
Is the thesis statement clear?
Is the thesis workable?
2. Topic Sentences and Paragraphs
Does each paragraph have a topic sentence?
Does each paragraph have a controlling idea?
Does each paragraph support the thesis?
Are the paragraphs clear?
19
3. Support
Is there enough support for the thesis?
Does each paragraph support the topic sentences?
Is it concrete, detailed, specific?
4. Introduction/Conclusion
Does the introduction gain attention?
Does it announce the topic?
Is the conclusion satisfactory?
Is it memorable?
5. Transitions
Are transitions present?
Are they smooth?
6. Grammar/Spelling/Word Usage
Are there any awkward, unclear sentences (words)?
Are the tenses consistent?
Are agreements and endings correct?
Is there sentence variety?
Is the passive voice, compared to the recommended active, voice overused?
Are there more words than necessary?
Are spelling and punctuation correct?
Are the pronoun references clear?
Other Resources
Licenses and Certifications:
American Institute of Public Accountants (AICPA) - Certified Public Accountant (CPA)
http://www.aicpa.org/ Schweser: http://www.schweser.com Becker CPA Review:
http://www.beckercpa.com/ Uniform CPA Examination: http://www.cpa-exam.org/ Exam Matrix:
http://www.exammatrix.com
California Department of Real Estate (DRE) - Real Estate Brokers/Sales License
http://www.dre.ca.gov/ Real Estate Trainers: http://www.retrainersca.com Kaplan/Anthony
Schools: http://www.kaplanprofessionalschools.com/california/
California Department of Insurance - Life/Property Insurance Brokers/Sales License
http://www.insurance.ca.gov/ Insurance School of California: www.52hours.com Kaplan Financial:
http://www.kaplanfinancial.com
CFA Institute - Chartered Financial Analyst (CFA)
http://www.cfainstitute.org Schwester: http://www.schweser.com/cfa/index.php Stalla:
http://www.stalla.com/index.cfm St. Mary's MS Financial Analysis & Investment Management:
20
http://www.stmarys-ca.edu University of San Francisco Executive MS in Financial Statement Analysis:
http://www.usfca.edu/artsci/grad/financial_analysis/index.html
Financial Industry Regulatory Authority (FINRA)
Registered Representative (Series #7), Registered Investment Advisor (Series #66), General Securities
Principle (Series #24). Other Licenses: Commodity Futures (Series #3), and Registered Options Principle
(Series #4), Research Analyst (Series #86), Corporate Securities Limited Representative (Series
#62)/Equity Trader Limited Representative (Series #55)/Registered Options Representative (Series #42),
Financial and Operations Principle (Series #27)
http://www.finra.org/Industry/Compliance/Registration/QualificationsExams/Qualifications/p011096
http://www.finra.org PassPerfect: http://www.passperfect.com Securities Institute:
http://www.securitiesce.com Compliance/Examination: http://www.prometric.com Pamela Smith
Seminars/Exam Prep: http://www.psssinc.com
United States Government Websites:
http://www.dof.ca.gov/html/demograp/DRUHPAR.HTM
U.S. Department of Labor
http://www.dol.gov/
U.S. Bureau of Labor Statistics
http://stats.bls.gov/
U.S. Bureau of Economic Analysis
http://www.bea.doc.gov/
United States Chamber of Commerce
http://www.uschamber.org/default.htm
Environmental Protection Agency
http://www.epa.gov/
Securities Exchange Commission
http://www.sec.gov/
EDGAR (SEC) Filings (REITs/REOC)
http://www.sec.gov/edgarhp.htm
Economic Websites:
American Economic Association
http://www.vanderbilt.edu/AEA/index.htm
Economy.com
http://www.economy.com
21
Bureau of Economic Analysis (BEA)
http://www.bea.doc.gov/
Bureau of Labor Statistics (BLS)
http://stats.bls.gov
Census Economic Briefing Rooms
http://www.census.gov/cgi-bin/briefroom/BriefRm
Confrence Board
http://www.tcb-indicators.org/
Council of Economic Advisors
http://www.whitehouse.gov/administration/epo/cea
Department of Commerce
http://www.commerce.com
Economic Cycle Research Institute (ECRI)
http://www.businesscyle.com
Economic Information Systems
http://www.econ-line.com/
Economic Research.com
http://www.economicsearch.com/
FedStats.com
http://www.fedstats.gov/
Federal Reserve Board of Governors
http://www.federalreserve.gov
Florida Research and Economic Database (FRED)
http://fred.labormarketinfo.com
Economic Research Federal Reserve St. Louis
http://research.stlouisfed.org/fred/
National Association of Business Economists
http://www.nabe.com/
National Association of Realtors
http://nar.realtor.com
Social Science Research Network
http://www.ssrn.com/
Stat USA Internet
http://www.stat-usa.gov/
22
UCLA Forecasting Project
http://www.anderson.ucla.edu/research/forecast/
Financial Institutions:
American Bankers Association
http://www.aba.com/default.htm
Federal Deposit Insurance Corporation (FDIC)
http://www.fdic.gov/
Federal Home Loan Bank
http://www.fhlbanks.com/
Federal Housing Finance Board
http://www.fhfb.gov/
Fannie Mae
http://www.fanniemae.com/
Freddie Mac
http://www.freddiemac.com/
Ginnie Mae
http://www.ginniemae.gov/
Federal Reserve Bank System, Board of Governors
http://www.bog.frb.fed.us/
Federal Reserve Bank of Atlanta
http://www.frbatlanta.org/
Federal Reserve Bank of Boston
http://www.frbchi.org/
Federal Reserve Bank of Cleveland
http://www.clev.frb.org/
Federal Reserve Bank of Dallas
http://www.dallasfed.org/
Federal Reserve Bank of Kansas City
http://www.kc.frb.org/
Federal Reserve Bank of Minneapolis
http://woodrow.mpls.frb.fed.us/
Federal Reserve Bank of New York
23
http://www.ny.frb.org/
Federal Reserve Bank of Philidelphia
http://www.phil.frb.org/
Federal Reserve Bank of Richmond
http://www.rich.frb.org/
Federal Reserve Bank of San Francisco
http://www.sf.frb.org/
Federal Reserve Bank of St. Louis
http://www.stls.frb.org/
U.S. Treasury Department, Comptroller of the Currency
http://www.ustreas.gov/
http://www.occ.treas.gov/
Institutional Real Estate Investment Research
and Management:
AEW Real Estate Investment Management
http://www.aew.com
Callan Associates (Mercer)
http://www.callan.com
Center for Investment Research
http://www.investmentresearch.org/
Counselors of Real Estate (CRE)
http://www.cre.org/
Heitman Real Estate Investment Advisors
http://www.heitman.com
Institute of Real Estate Management
http://www.irem.org/
Institutional Real Estate Inc. (IREI)
http://www.irei.com/
Jones Lang Lasalle (JLL)
http://www.joneslanglasalle.com
National Association Real Estate Investment Management (NAREIM)
http://www.nareim.org/
24
National Council of Real Estate Investment Feduciaries (NAREIF)
http://www.ncreif.org/
Prudential Investment Management: Real Estate Investors (PREI)
http://www.investmentmanagement.prudential.com/view/page/pimcenter/700
Pension Real Estate Association (PREA)
http://www.prea.org/
RREEF Alternative Investments
http://www.rreef.com/cps/rde/xchg/ai_en/hs.xsl/index.html
UBS Global Real Estate
http://www.ubs.com/1/e/globalam/gre.html
Mortgage Backed Securities:
ARCS Commercial Brokerage
http://www.arcscommercial.com/
Bond Market Association
http://www.bondmarkets.com/research/RQ717.shtml
Commercial Mortgage Securities Association (CMSA)
http://www.cmsaglobal.org/
Commercial Mortgage Alert
http://www.cmsalert.com/index.php/
Federal Home Loan Bank
http://www.fhlbanks.com/
Federal National Mortgage Association (Fannie Mae)
http://www.fanniemae.com/
Freddie Mac
http://www.freddiemac.com/
Global Association of Risk Managers
http://www.garp.org/default.aspx
Government National Mortgage Association (GNMA)
http://www.ginniemae.gov/
Markit - CMBX Index
http://www.markit.com
Mortgage Bankers Association (MBA)
http://www.mortgagebankers.org
25
National Mortgage News
http://www.nationalmortgagenews.com/
International:
Acadametrics
http://www.acadametrics.co.uk
Amnesty International
http://www.amnesty.org
Association of Foreign Investors in Real Estate (AFIRE)
http://www.afire.org
Bank of International Settlements (BIS)
http://www.bis.com
Bank of England
http://www.bankofengland.co.uk/
Barclays Global
http://www.barclays.co.uk/
British Broadcast Corporation (BBC)
http://www.bbc.com
Bloomberg News
http://www.bloomberg.com
Der Spiegel
http://www.spiegel.de/international/
Economist Intelligence Unit (EIU)
http://www.eiu.com
Ernst & Young
http://www.ey.com/global/content.nsf/International/Home
Europe Real Estate
http://www.europe-re.com/
European Central Bank (ECB)
http://www.ecb.int/home/html/index.en.html
Financial Times (FT)
http://www.ftnewspaper.com
26
Fortis Investment Management
http://www.fortisinvestments.com
FTSE Group (FTSE)
http://www.ftse.com
IPE Real Estate
http://www.ipe.com/realestate/
International Herold Tribune
http://www.iht.com
International Monetary Fund (IMF)
http://www.imf.org
International Real Estate Digest (IRED)
http://www.ired.com
International Real Estate Federation (IREF)
http://www.fiabci.com
International Real Estate Society (IRES)
http://www.iresnet.net
Investment Property Databank (IPD)
http://www.ipd.com
International Securities Exchange (ISE)
http://www.ise.com
Jones Lang LaSalle
http://www.joneslanglasalle.com
Le Figaro
http://www.lefigaro.fr/international/
Le Monde Diplomatique
http://mondediplo.com
Organization for Economic Cooperation and Development (OECD)
http://www.oecd.org
OXFAM International
http://www.oxfam.org
Property Finance Europe
http://www.pfeurope.eu/
Realty Guide International
http://www.xmission.com/~realtor1/
27
Reuters News Service
http://www.reuters.com/
REFIRE Intelligence Report
http://www.refire-online.com/
Royal Institution of Chartered Surveyors (RICS)
http://www.rics.org
UBS Global Real Estate
http://www.ubs.com/1/e/globalam/gre.html
United Nations
http://www.un.org/esa/index.html
World Bank
http://www.worldbank.org/
World Economic Forum
http://www.weforum.org/en/index.htm
Updated: Tuesday January 26th, 2016