Sauder School of Business at UBC
Course Information
Course title:
Real Estate Investment
Course code:
COMM 307
Credits:
Session and term: 2021W2
Section:
201, 202, 203
Class times:
Course duration:
1/11 – 4/7
Division:
SBE
Pre-requisites:
3
307.201 - TuTh 9:30-10:50, HA 237
307.202 - TuTh 11:00-12:20, HA 237
307.203 - TuTh 14:00-15:20, HA 235
One of COMM 295, ECON 201,
ECON 301 and one of COMM 297,
COMM 298
Instructor information
Instructor:
Prof. Tsur Somerville,. PhD
Phone:
604-822-8343
Office location: HA 278
Email:
tsur.somerville@sauder.ubc.ca
M 14:30-16:30
Office hours:
Office Hours
M 14:30-16:00
In person:
HA 278
Zoom: https://ubc.zoom.us/j/61280556692?pwd=MlpCK1RuYmkrZGppcEd1RjZyVUxEZz09
Teaching assistant: Robyn Gerry, MBA robyn.gerry.ta@gmail.com
Course Description
This course is a one semester introduction to investment in existing real estate assets. You will
learn project analysis and evaluation within the context of understanding real estate markets as
distinct economic phenomenon. The course covers the basics of the economics of real estate
markets, market analysis, investment analysis tools such as pro-formas (real estate specific
discounted cash flow), leasing and property management, appraisal and the pricing of
heterogeneous goods, real estate securitization, and real estate in a diversified portfolio. Academic
lectures are supplemented by a series of guest lectures by local real estate professionals.
Course Format
As per UBC Policies. Objective is in class. However, some guest lecturers may be on-line using
Zoom and current schedule is through Jan 24, 2022 on Zoom. Office hours may be by Zoom as
well depending on public health conditions. You are expected to have a Zoom account for use as
needed and to participate on-line if you cannot attend for health reasons. To create a Zoom
account, you can create one here: https://zoom.us/signup. Note: creating a Zoom account requires
that you provide a first name, last name, and email address to Zoom. For privacy purposes, you
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may consent to using your existing email address and your real name. Alternatively, if you prefer,
you may sign up using an alternative email address and an anonymized name that does not
identify you (i.e. Jane Doe, jane.doe@email.com). If you have trouble creating an account, or
accessing a Zoom session, please contact CLCHelp@sauder.ubc.ca. You will be required to
provide the email address associated with your Zoom account in a Canvas quiz for identification
purposes.
When class is online: To help replicate the classroom experience, make sessions more dynamic
and hold each person accountable, both students and instructors are required to have their
cameras on during Zoom sessions. This is the desired norm for the Sauder undergraduate program
as it will provide you the best learning experience. Students who require an accommodation with
regard to the “camera on” requirement must contact the instructor to discuss options. Students are
expected to conduct themselves professionally by joining sessions on time, muting mics when not
speaking, refraining from using any other technology when in-session, attending in attire you
would normally wear to school, and participating from a quiet environment. Content from
synchronous sessions will be selectively recorded per instructor discretion and made available to
students on Canvas for a maximum duration of the course length. This is done to allow students
the opportunity to return to lecture content to solidify learnings. When attendance is taken during
an on line class, if your camera is not on, you are not present.
Learning Objectives
By the end of this course, students will be able to:
1. Understand how to value commercial leases
2. Analyze discounted cash flow valuation of real estate assets
3. Assess properties using comparable, income, and cost approaches to valuation.
4. Value waterfall cash flow streams in equity real estate finance
5. Understand the difference between public and private real estate assets
6. Provide basic market analysis for a residential and non-reside
7. Determine the financial metrics of a development
8. Produce a comprehensive evaluation of a real estate investment.
Assessment
Summary
Component
Case write-ups (2 cases)
Investment analysis project
Final exam
Class participation
Total
Weight
20%
45%
25%
10%
100%
Details of Assessments
Project:
This assignment is an investment analysis of the potential purchase of an income
producing real estate asset. You must prepare a written report that provides the
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critical analysis for whether: your firm should acquire the asset at the listed price.
The assignment is to be done as a group project
Participation: Grade is based on: i) mandatory attendance for guest lecturers; ii) spot attendance;
iii) questions asked in class – greater weight for questions asked of guest lecturers;
and iv) Performance on in-class assignments and quizzes. Failure to submit these
counts as absent. Attendance alone yields a participation grade of 72. For a higher
grade, active participation through questions and contributions. Hogging question
period or asking unnecessary or unhelpful questions may result in a lower
participation grade.
Learning Materials
i)
ii)
iii)
iv)
Real Estate Investment Analysis & Advanced Income Appraisal (REIAAIA. PDFs of the
chapters from both are posted on the course Canvas pages as a zip file The text is also
available from the Sauder Real Estate Division (HA 247).
Additional readings from
a. Appraisal of Real Estate (ARE), Third Canadian Edition, PDFs of the chapters are
posted on the course Canvas pages as a zip file.
b. Select chapters from Coulson on statistical appraisal and hedonic estimation are
posted on the course Canvas pages as a zip file.
Case readings. Information on how to access the reading package is posted on the
course Canvas pages as a PDF.
An optional resource is Brueggeman & Fisher (B&F). Real Estate Finance and
Investments, Fifteenth Edition (2016). Available on-line. This is NOT a required
purchase, as it is extremely expensive, but the text can be used in COMM405 as well
Course-specific Policies and resources
Missed or late assignments, and regrading of assessments.
A missed assignment receives a grade of zero. A late assignment without prior permission declines
by 6 percentage points for each 24 hour period the assignment is late. Assignments will only be regraded with clear demonstrable cause and remain at the discretion of the instructor
Academic Concessions
The policy on academic concessions is contained in Senate Policy V-135. These will be granted
for valid cause and include reweighting to other course components.
COVID 19 considerations
If you feel unwell or have other circumstances that prevent you from attending class or completing
assessments, you should send a courtesy email to notify your course instructor. The following
should also be taken into consideration, keeping in mind that there are specific deadlines to
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request academic concessions:
• If you miss assessments worth less than 25% of the overall course grade, or less than two
weeks of classes, you should email the instructor directly to discuss options for missed
assessments or classes. Concessions in this scenario are granted by the instructor and do
not need support from the Sauder Undergraduate Office or your home advising office.
• If you miss assessments worth 25% or more of the overall course grade, or two or more
weeks of classes, you must request academic concession through the Sauder
Undergraduate Office at https://mybcom.sauder.ubc.ca/academic-concession .
If you suspect a possible Covid-19 infection, you should use the BC Ministry of Health’s selfassessment tool to help determine whether further assessment or testing for COVID-19 is
recommended. Students who are required to self-isolate or quarantine must follow BC health
guidelines. If extenuating circumstances inhibit your ability to come to campus to complete
assessments, please review your eligibility for an alternate format assessment.
Other Course Policies and Resources
.
§ Canaccord Learning Commons resources such as Peer Assisted Study Sessions (PASS),
presentation coaching, communication development programs.
§ Policies on assessment due prior to students joining the course (i.e., during the add/drop
period).
§ Attendance and punctuality. Attendance for guest lecturers is mandatory. An absence will
result in a 5 percentage point reduction in your participation grade for each absence (you get
one free absence). The same rules apply to spot attendance taken in non-guest lecture classes.
Respectfulness in the classroom
Students are expected to be respectful of their colleagues at all times, including faculty, staff and
peers. This means being attentive and conscious of words and actions and their impact on others,
listening to people with an open mind, treating all UBC Sauder community members equally and
understanding diversity. Students who act disrespectfully toward others will be asked to leave the
class and be marked as absent for the day. They may also be removed from a team, lose credit for
in-class assessments and activities, or be asked to complete a group assignment individually.
Respect for Equity, Diversity, and Inclusion
The UBC Sauder School of Business strives to promote an intellectual community that is enhanced
by diversity along various dimensions including status as a First Nation, Metis, Inuit, or Indigenous
person, race, ethnicity, gender identity, sexual orientation, religion, political beliefs, social class,
and/or disability. It is critical that students from diverse backgrounds and perspectives be valued in
and well-served by their courses. Furthermore, the diversity that students bring to the classroom
should be viewed as a resource, benefit, and source of strength for your learning experience. It is
expected that all students and members of our community conduct themselves with empathy and
respect for others.
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Electronic Devices
During online lectures, students are not permitted to use any electronic devices other than the
primary one used for attending the online lecture (e.g. laptop or desktop). Only Zoom and a notetaking application should be open during the online lecture unless an instructor advises the use of
another device or application for an in-class activity. Feedback from students indicates that
personal devices is the number one distraction from effective learning and participation in the
online learning environment.
University Policies and resources
UBC provides resources to support student learning and to maintain healthy lifestyles but
recognizes that sometimes crises arise and so there are additional resources to access including
those for survivors of sexual violence. UBC values respect for the person and ideas of all members
of the academic community. Harassment and discrimination are not tolerated nor is suppression of
academic freedom. UBC provides appropriate accommodation for students with disabilities and
for religious observances. UBC values academic honesty and students are expected to
acknowledge the ideas generated by others and to uphold the highest academic standards in all of
their actions. Details of the policies and how to access support are available on the UBC Senate
website at https://senate.ubc.ca/policies-resources-support-student-success.
Academic Integrity
The academic enterprise is founded on honesty, civility, and integrity. As members of this
enterprise, all students are expected to know, understand, and follow the university policies and
codes of conduct regarding academic integrity. At the most basic level, this means submitting only
original work done by you and acknowledging all sources of information or ideas and attributing
them to others as required. This also means you should not cheat, copy, or mislead others about
what is your work; nor should you help others to do the same. For example, it is prohibited to:
share your past assignments and answers with other students; work with other students on an
assignment when an instructor has not expressly given permission; or spread information through
word of mouth, social media, or other channels that subverts the fair evaluation of a class exercise,
or assessment. Violations of academic integrity (i.e., misconduct) lead to the breakdown of the
academic enterprise, and therefore serious consequences arise and harsh sanctions are imposed.
For example, incidences of plagiarism or cheating may result in a mark of zero on the assignment
or exam and more serious consequences may apply if the matter is referred to the President’s
Advisory Committee on Student Discipline. Careful records are kept in order to monitor and
prevent recurrences.
Academic Freedom and Students Studying from Outside Canada
During this pandemic, the shift to online learning has greatly altered teaching and studying at
UBC, including changes to health and safety considerations. Keep in mind that some UBC courses
might cover topics that are censored or considered illegal by non-Canadian governments. This
may include, but is not limited to, human rights, representative government, defamation,
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obscenity, gender or sexuality, and historical or current geopolitical controversies. If you are a
student living abroad, you will be subject to the laws of your local jurisdiction, and your local
authorities might limit your access to course material or take punitive action against you. UBC is
strongly committed to academic freedom, but has no control over foreign authorities (please visit
http://www.calendar.ubc.ca/vancouver/index.cfm?tree=3,33,86,0 for an articulation of the values
of the University conveyed in the Senate Statement on Academic Freedom). Thus, we recognize
that students will have legitimate reason to exercise caution in studying certain subjects. If you
have concerns regarding your personal situation, consider postponing taking a course with
manifest risks, until you are back on campus or reach out to your academic advisor to find
substitute courses. For further information and support, please visit:
http://academic.ubc.ca/support-resources/freedom-expression
Copyright
All materials of this course (course handouts, lecture slides, assessments, course readings, etc.) are
the intellectual property of the instructor or licensed to be used in this course by the copyright
owner. Any redistribution of these materials by any means without permission of the copyright
holder(s) constitutes a breach of copyright and may lead to academic discipline and could be
subject to legal action. Any lecture recordings are for the sole use of the instructor and students
enrolled in the class. In no case may the lecture recording or part of the recording be used by
students for any other purpose, either personal or commercial. Further, audio or video recording of
classes are not permitted without the prior consent of the instructor.
This applies in particular to all data and access to websites provided in this course. They may NOT
be used for any purpose other than necessary for the course NOR may they be shared with ANY
persons.
Your reports and project are your property and you may share and distribute them as you see fit.
The professor also has the permission to share or distribute any submitted materials.
Acknowledgement
UBC’s Point Grey Campus is located on the traditional, ancestral, and unceded territory of the
xwməθkwəy̓əm (Musqueam) people, who for millennia have passed on their culture, history, and
traditions from one generation to the next on this site.
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C307 SCHEDULE – January 20, 2022
I.
Introduction
Tue., January 11
Introduction: Real Estate Basics – On-line
REIAAIA, Ch. 1; ARE, Ch. 4
II.
Leases and Markets
Th., January 13
Drivers of Real Estate – Markets – On-line
Tue., January 18
Introduction to Leases – On-line
REIAAIA, Chapter 2 (2.39-2.45), Chapter 3
III.
Pro-Form Analysis
Th., January 20
Pro-Forma Basics – On-line
REIAAIA, Chapter 2, 5, and 8
Tue., January 25
Real Estate Returns – On-line
REIAAIA, Chapter 5
Th., January 27
Guest Lecture: Leasing – On-line
all of Avison & Young (2 per section)
9:30 - Garth White and Stephanie Yeargin
11:00 – Mike Farrell, Daniel Lee, and Teresa Pham
14:00 – Connor Eden and Justin Omichinski
Leasing Case – Busse Place Handed Out
Tue., Feb 1
Real Estate Financing & Taxes – On-line
REIAAIA, Chapter 7
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Th., Feb. 3
IV.
Equity Finance & Risk – On-line
Asset & Property Management
Tue., Feb 8
Guest Lecture, Asset Management
Jaclyn O’Neil, BGO
Th., Feb 10
Leasing Case
Busse Place, HBS Case (To be submitted)
Tue., Feb 15
Modelling Partnership
Business as Unusual: Managing Commercial Property in Distress,
Kellogg case (READ-ONLY, no for submission)
Equity Finance / Pro Forma Case – Wildcat Handed Out
Th., Feb 17
V.
Guest Lecture: Property Management & Leasing
Stephen Duyvewaardt & Dale Mumford, PCI Warringtons
Appraisal
Tue., March 1
Defining Value & Appraisal Basics: Comparison
ARE, Ch. 2, 7.
Th., March 3
Q&A on Wildcat Capital Investors: Real Estate Private Equity
Tue March 8
Appraisal Continued
ARE, Ch. 13, 14,
Wildcat Capital Investors: Real Estate Private Equity (To be
submitted
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Th., March 10
Guest Lecture: Market Date
Patrick Mitchell, CoStar
DEADLINE FOR IDENTIFYING PROJECT GROUP
Tue March 15
Cost and Statistical Approaches to Appraisal
iBuyers & Financialization
ARE, Ch. 17. Coulson, Ch. 1 & 2,
VI.
Th., March 17
Guest Lecture: Commercial Appraisal
Steven Caldecott & Jessica Toppazzini, Avison Young
Tue., March 22
Project Discussion – BentallGreenOak Investment Project
Th., March 24
Project site visit / Q&A day – details TBD
Real Estate Funds, Portfolio & Equity Securitization
Tue., March 29
Real Estate Fund & Portfolio Issues
How Institutional Investors Think About Real Estate: HBS Reading 9209-152 (READ ONLY – no submission )
Th., March 31
Guest Lecture: Real Estate Private Equity
Vera Liu, KingSett Capital
Tue., April 5
REITs and Equity Securitization
AMB Financial reporting in the REIT Industry, Stanford Business
School Case A-194 (READ ONLY, not for submission)
Th., April 7
REITs - Private vs. Public Real Estate
The AMB Consolidation, HBS Case 9-899-144 139 (READ ONLY,
not for submission)
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COMM307 Final Project – BentallGreenOak Investment Project
1.
Assignment Basics
This assignment is a market valuation analysis of an income producing real estate asset. Ypour
goal is to ascertain the likely market value of the asset.
2.
Team
This project must be done in teams of approximately three to four students per team. There is a
fixed number of teams per property. I will be assigning teams. However, if you have other people
with whom you collectively would like to form a team, please submit the names to me and I will
try to accommodate you. Please submit no more than four names.
3.
Project Guidelines
a. Length - The written text of the assignment must be no more than 20 pages, not
counting citations, tables, charts, and exhibits, which you may add as you see fit.
b. Choosing a property - Projects will be allocated on a first come first serve basis.
However, they will be allocated first to groups who present a list of team members
to me. Email your i) name or the names of those in your group and ii) your
preferences in order.
4.
The list of assets and property Information will be available after the break in February
a. Properties themselves
b. Physical information
c. Rent roll –details on existing tenant leases
d. Income statements
e. Follow-up phone call w/ Bentall staff. Teleconference with all teams working on
that site present
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