Spring 2015
Course Syllabus
COURSE:
INSTRUCTOR:
OFFICE:
OFFICE HOURS:
WWW Homepage:
EMAIL:
FIN 4723 – Principles of Real Estate Investment
Dr. Thomas Thomson
BB 4.06.26
MW 3:15-4:00 and 5:15-6:00 PM and by appointment
http://faculty.business.utsa.edu/tthomson
thomas.thomson@utsa.edu
PHONE:
458-5306
TEXTBOOK
Ling and Archer. 2013. Real Estate Principles: A Value Approach, 4th edition. McGraw-Hill
Irwin, 671 p. (ISBN: 978-0-07-337734-6) Other readings may also be assigned as announced in class.
An HP 10bII+ is the recommended financial calculator. Any examples shown in class will use this calculator.
If you choose to use another, it is your responsibility to learn to use it.
LEARNING OBJECTIVES
This course presents an overview and analysis of real estate investment. Upon completion of
this class you should understand the analytical issues of real estate investments including investment
analysis of the major types of commercial real estate (CRE) including lease structures, proformas, and
before and after tax cash flow analysis. This course emphasizes real estate proformas. You will learn
how to calculate the NOI, before and after tax cash flows and income from reversion. You should be
able to evaluate the appropriate leverage to use in a real estate investment. You will learn about the
leases that for the foundations for estimating cash flows. You will learn how commercial real estate is
securitized as Real Estate Investment Trusts. Guest speakers will present current issues regarding CRE
investing.
PREREQUISITES
MGT 3003, FIN 3014,and FIN3433, or consent of instructor
COURSE OUTLINE
Week of
January 12
January 19
January 26
February 2
February 9
February 16
February 23
March 2
March 16
March 23
March 30
April 6
April 13
April 20
April 27
Topics
Introduction
Investment Goals
Types of Properties and Leases
Investment Analysis I:Before Tax Cash Flow
Investment Funding: Debt and Mortgages
Investment Decisions Ratios
Exam 1, Review
Investment Decision: NPV, IRR and leverage
Investment Decision: Income Taxes
Investment Decision: Income Taxes
Enhancing Value: Ongoing Management
REITS
Exam 2
Real Estate Portfolios, Special Topics
Guest Speakers / Case Analysis
Reading (Chapters)
22
8
17
18
19
20
20
21
17
TBA
EVALUATION
Your success in this course will be measured using, attendance, homework (due at the beginning of
each class, late homework = 0) and three examinations. The proposed dates are shown below. Any revision
announced in class supercedes the schedule below. The course website
(http://faculty.business.utsa.edu/tthomson/Fin4723.htm) provides the homework assignments, and after the
homework is due, solutions will be provided at this site. This site also provides details for earning an extra
credit grade bump for completing a portfolio of professional development events. The weights which will be
applied to the exams and other measures are:
Item
Attendance/Homework
Exam 1
Exam 2
Final Exam
Weight
20%
20%
20%
40%
Date
Ongoing
February 23
April 15
May 4 (4:00 PM)
Chapters
8, 22, 17,18
17, 19-21
All
Though subject to a downward revision in cutoff scores (i.e. a “curve”), grades will be assigned to the
percentage achievements noted in the Table below. Any curve will be limited to not raise your grade above
your homework and attendance grade. A grade below 60.0% will be assigned an F.
A+
A
A-
97.0-100
93.0-96.9
90.0-92.9
B+
B
B-
87.0-89.9
83.0-86.9
80.0-82.9
C+
C
C-
77.0-79.9
73.0-76.9
70.0-72.9
D+
D
D-
67.0-69.9
63.0-66.9
60.0-62.9
Exams
The proposed exam dates are noted above. The Chapters included on each exam will be confirmed during class.
In addition to the text materials, exams will test materials covered in class by the instructor and guest lecturers.
Unless revisions are announced in class, the exam dates will be as noted above. The exam questions will be
taken from the homework, examples covered in class, end of chapter test questions, online chapter quizzes,
presentations by guest speakers and assigned readings. The Final Exam will be comprehensive. To each exam,
bring a financial calculator and a SCANTRON form. All exams and all your work on exams are the property
of the instructor. You are encouraged to review your exams during office hours.
Student Conduct in Class: Class Attendance: This class follows HOP 5.09 which can be found at:
http://www.utsa.edu/hop/chapter5/5-9.html. Attendance at lecture is expected. Sign in sheets will be randomly
used to monitor attendance and used to determine your attendance grade. Attendance will count double on days
with guest lecturers. All students are expected to exercise self-discipline and a respect for the rights of others at
all times. Students acting in a disruptive manner will be asked to leave the classroom. Please turnoff all noise
making sources (cell phones, for example), before class. All students are expected to uphold the UTSA Creed:
http://www.utsa.edu/about/creed/, and the Student Code of Conduct,
http://www.utsa.edu/infoguide/appendices/b.html. Any student suspected of participating in any academic
dishonesty will be reported to Office of Student Judicial Affairs, and the Instructor will recommend an
automatic F for the course grade. Full details on Common Syllabus Information, which this class adhers to, is
provide at the following link; http://provost.utsa.edu/syllabus.asp
Course Revisions: Any revisions to this syllabus will be announced in class.
“It would be devastating to the egos of the intelligentsia to realize, much less admit, that businesses have done
more to reduce poverty than all the intellectuals put together. Ultimately it is only wealth that can reduce poverty
and most of the intelligentsia have no interest whatever in finding out what actions and policies increase the
national wealth.” Thomas Sowell from http://www.townhall.com/columnists/thomassowell/ts20050512.shtml