REF Syllabus
Property Finance and Investment
RES 3200
Spring 2015
Instructor: Lawrence Longua email: lawrence.longua@ baruch.cuny.edu phone: 646.660.6967 cell: 917.544.0121 1. Overview and Objectives Real estate plays an integral role in the U.S. economy. Residential real estate provides housing for families, and is often the greatest source of wealth and savings for many of them. Commercial Real Estate (CRE) creates spaces for residential, retail, office and manufacturing use. The deep “Great Recession” from which we are have emerged/are emerging was triggered primarily by a bubble in the US single-family housing market. Because over 60% of the total of single-family debt in the US had been securitized by 2006, the bursting bubble in home prices was felt throughout the global economy. The recession also cut off access to the capital market, which had been providing 30% of debt capital for CRE and drove down perceived values. Since real estate is a capital-intensive asset class, more so than most other classes, the subsequent reduction of debt sources and the tightening of underwriting standards greatly reduced real estate transactions and consequently prices of real estate. This course will cover, briefly, different structures of single-family mortgages, but primarily focus on the financing and investment of CRE, the impact of debt on equity eturns, the concepts underlying the securitization of CRE debt and equity.
2. Prerequisites and Course Materials Satisfactory completion of FIN 3000 is a prerequisite for this course, in particular, a solid understanding of the basic tools of finance: discounting of cash flows and the time value of money. To that end, you are required to own (and have with you for each class) a financial calculator. No particular calculator is proscribed. However, the instructor will be using is class a HP 12C. The textbook for the course is one which seems to be universally used for real estate finance and investment,
RES 3200
Spring 2015
Instructor: Lawrence Longua email: lawrence.longua@ baruch.cuny.edu phone: 646.660.6967 cell: 917.544.0121 1. Overview and Objectives Real estate plays an integral role in the U.S. economy. Residential real estate provides housing for families, and is often the greatest source of wealth and savings for many of them. Commercial Real Estate (CRE) creates spaces for residential, retail, office and manufacturing use. The deep “Great Recession” from which we are have emerged/are emerging was triggered primarily by a bubble in the US single-family housing market. Because over 60% of the total of single-family debt in the US had been securitized by 2006, the bursting bubble in home prices was felt throughout the global economy. The recession also cut off access to the capital market, which had been providing 30% of debt capital for CRE and drove down perceived values. Since real estate is a capital-intensive asset class, more so than most other classes, the subsequent reduction of debt sources and the tightening of underwriting standards greatly reduced real estate transactions and consequently prices of real estate. This course will cover, briefly, different structures of single-family mortgages, but primarily focus on the financing and investment of CRE, the impact of debt on equity eturns, the concepts underlying the securitization of CRE debt and equity.
2. Prerequisites and Course Materials Satisfactory completion of FIN 3000 is a prerequisite for this course, in particular, a solid understanding of the basic tools of finance: discounting of cash flows and the time value of money. To that end, you are required to own (and have with you for each class) a financial calculator. No particular calculator is proscribed. However, the instructor will be using is class a HP 12C. The textbook for the course is one which seems to be universally used for real estate finance and investment,