University of Southern California
Marshall School of Business
Department of Finance and Business Economics
FBE 489
Robert Bridges, A.I.A.
FBE 489 Real Estate Capital Markets
Course Overview:
This course covers a series of special topics in real estate finance and
investment. The areas that will be emphasized include the role of debt and or
equity, the history of significant entities providing debt financing in today’s real
estate industry, private deal structure and sydications, and macroeconomic
influences affecting real estate finance. The course is appropriate for students
emphasizing real estate with strong finance skills or students emphasizing
corporate finance with a desire to broaden their exposure to some of the unique
aspects of real estate. The use of advanced computer software is emphasized.
Learning Objectives:
Students successfully completing this course will be able to understand industrystandard terminology and techniques for valuing income-producing real estate,
identifying risks and opportunities, as well as be able to gain advanced
capabilities in the methods for the creation and communication of finance
concepts, strategies, proposals and presentations. Students are expected to gain
competency in current software applications relevant to the real estate industry.
By means of a series of case studies, the student will develop a practical
understanding of how the formal finance and market analysis concepts learned
introductory classes are applied in a practical context.
Students will study the history of governmental agencies and institutions involved
in real estate finance, as well as economic factors and events with important
relevance to understanding real estate investments.
Students will work individually and groups to analyze real-world real estate
cases, and prepare and present proposals in class.
Course Organization:
Robert Bridges, A.I.A. Page 1 of 6
This course is in a seminar format with a number of individual and group
assignments including spreadsheet exercises, case analyses, reading
assignments, and group projects. The class meets twice weekly and students are
expected to have read the relevant textbook, case and other assigned material
prior to the classes during which the topics are to be discussed.
The course will feature a final reading and research project with a topic to be
proposed by the student. Details about this assignment will be discussin in class
during the first week.
Course Requirements:
Case Analyses
Final Reading and Research Paper Presentation
Assignments
Attendance, preparedness and making a meaningful contribution
To the intellectual environment of the classroom
50%
20%
15%
15%
The assignments will be drawn from the course reader, from questions from the
chapters in the textbook, or from other current and newsworthy material covered
in class.
All homework assignments must be submitted in printed form during the
class session on the day they are due. No late work will be accepted.
Textbook, Equipment, Cases and Readings:
Required Resources: Students must have an HP 17bII+ financial calculator, and
access to a computer running the latest version of Microsoft Excel, Word and
Powerpoint in order to complete assignments.
Students should have a copy of Breuggeman and Fisher, Real Estate Finance
and Investments, Latest Edition, Homewood Illinois: Irwin, and Friedman
and Schwartz, A Monetary History of the United States, Latest Edition,
Princeton Press.
For the final
Also, it is assumed that students have covered the standard core material in
corporate finance and accounting.
In addition to the cases, there will be periodic readings related to the case
and lecture materials assigned and distributed by the instructor.
ARGUS Software:
Personal versions of ARGUS Financial Software are available for sale to
individual students for use during the course. It is recommended that the
Robert Bridges, A.I.A. Page 2 of 6
software be purchased by those students contemplating its use outside of
the classroom. The software will not be used during the course, however,
ARGUS is commonly used in the real estate industry and familiarity with
the program may assist in placement for those students pursuing real
estate careers. ARGUS is available on our network but is not accessible
from off campus.
An application for ARGUS will be distributed. The cost is a small fraction of the
retail cost of the software and includes a manual. The software (and license)
expire at the end of the school year.
Other Resources:
There are numerous periodicals that are relevant and good reading too
keep abreast of real estate events, trends, people, players and deals.
This is by no means an exhaustive list but a start. Among periodicals, the
National Real Estate Investor, Commercial Property News and the Real
Estate Alert (expensive weekly) provide good national coverage. The Real
Estate Review is an excellent applied Journal. The Property Report
appears in Section B of the WSJ every Wednesday. There are numerous
others. Local periodicals include the Los Angeles and Orange County
Business Journals. The LA Times Business Section has regular coverage
of commercial real estate on selected weekdays.
Websites that are of interest include:
www.reforum.com
www.nareit.com
www.tortowheatonresearch.com
www.boma.org
www.ncreif.com
www.argussoftware.com
www.ssctech.com/realestate/
www.nacore.com
www.ccim.com
Note: Student readings from the Brueggeman and Fisher Text, Harvard Business
School Cases and other cases in preparation for lectures and class sessions are
shown in boldface type.
Robert Bridges, A.I.A. Page 3 of 6
Tentative Schedule of Class Meetings:
Week 1
Course Overview
Week 1
Finance Principles Review
Week 2
MS Excel and Spreadsheet Review
Week 2
The Early History of the Federal Reserve System
Week 3
The Economics of the Great Depression
Week 4
The Early History of Mortgage Finance
Week 4
Mortgages and The Evolution of Residential and
Commercial Finance
Week 4
The Secondary Mortgage Market and Mortgage
Backed Securities
Week 5
The Anatomy of the Recession of 2007
Week 5
Current Market Conditions
Week 6
Introduction to Syndications, Partnerships and the
Structure of Financial Transactions
Week 6
Examples of Deal Structure and Partnership
Distribitions
Week 7
Case Study: The Empire State Building (1929)
Week 7
Case Presentaitons
Week 8
Case Study: The Empire State Building (2012)
Week 8
Case Presentations
Week 9
Case Study: Rockefeller Center
Week 9
Case Presentations
Week 10
Case Study: Camden Yards
Week 10
Case Presentations
Robert Bridges, A.I.A. Page 4 of 6
Week 11
Case Study: The Newhall Land and Farming and
Irvine Companies
Week 11
Case Presentations
Week 12
Case Study: Kelo v. City of New London
Week 12
Case Presentations
Week 13
Case Study: Farmer’s Field Case
Week 13
Case Presentations
Week 14
Slack
Week 14
Reserch and Reading Project Final Draft Review
Final Exam:
Research and Reading Project Presentations
Refer to University Final Exam Schedule for Date and Time
Instructor Access:
The instructor will hold office hours by appointment only.
E-mail is the preferred method of communicating with the instructor.
Campus Office:
301F Accounting
Telephone:
310-494-6125
E-mail:
rbridges@marshall.usc.edu
Academic Integrity:
The use of unauthorized material, communication with fellow students during an
examination or other exercise, attempting to benefit from the work of another
student, and similar behavior that defeats the intent of an examination,
assignment or other class work is unacceptable to the University. It is often
difficult to distinguish between a culpable act and inadvertent behavior resulting
from the nervous tensions accompanying examinations. Where a clear violation
Robert Bridges, A.I.A. Page 5 of 6
has occurred, however, the instructor may disqualify the student’s work as
unacceptable and assign a failing mark on the paper.
Returned Paperwork:
Returned paperwork, unclaimed by a student, will be discarded after 4 weeks
and, hence, will not be available should a grade appeal be pursued by a student
following receipt of his/her grade.
Students With Disabilities:
Any student requesting academic accommodations based on a disability is
required to register with Disability Services and Programs (DSP) each semester.
A letter of verification for approved accommodations can be obtained from DSP.
Please be sure the letter is delivered to the instructor as early in the semester as
possible. DSP is located in STU 301 and is open 8:30 a.m. - 5:00 p.m., Monday
through Friday. The phone number for DSP is (213) 740-0776.
Robert Bridges, A.I.A. Page 6 of 6