Course Syllabus
COURSE:
INSTRUCTOR:
OFFICE:
OFFICE HOURS:
WWW Homepage:
EMAIL:
Spring 2013
FIN 4723 – Principles of Real Estate Investment
Dr. Thomas Thomson
BB 4.06.26
Mon & Wed Noon – 1 PM and by appointment
http://faculty.business.utsa.edu/tthomson
thomas.thomson@utsa.edu
PHONE:
458-5306
TEXTBOOK
Ling and Archer. 2010. Real Estate Principles: A Value Approach, 3rd edition. McGraw-Hill
Irwin, 736 p. (ISBN: 978-0-07-337732-2) Other readings may also be assigned as announced in class.
An HP 10bII or 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
Topics
January 14
Introduction, Investment goals
January 21
Types of Properties and Leases
January 28
Investment Analysis I:Before Tax Cash Flow
February 4
Investment Funding: Debt and Mortgages
February 11
Investment Decisions Ratios
February 18
Exam 1
February 25
Investment Decision: Leverage and Risk
March 4
Investment Decision: Income Taxes
March 11
Spring Break
March 18
Investment Decision: Income Taxes
March 25
Enhancing Value: Ongoing Management
April 1
REITS
April 8
Exam 2
April 15
Real Estate Portfolios, Special Topics
April 22
Guest Speakers / Case Analysis
April 29
Review
Reading (Chapters)
22
8
17
18
19
20
20
21
17
TBA
EVALUATION
Your success in this course will be measured using professional development, homework (due at the
beginning of each class, late homework = 0) and attendance, and three examinations. The proposed event 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 details for homework and professional
development events. The weights which will be applied to the exams and other measures are:
Item
Professional. Development
Homework & Attendance
Exam 1
Exam 2
Final Exam
Weight
10%
25%
20%
20%
25%
Date
Ongoing
Ongoing
Feb 18
April 8
May6,
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. A grade below 60.0% will be assigned an F.
A+
A
A-
98.0-100
92.0-97.9
90.0-91.9
B+
B
B-
88.0-89.9
82.0-87.9
80.0-81.9
C+
C
C-
78.0-79.9
72.0-77.9
70.0-71.9
D+
D
D-
68.0-69.9
62.0-67.9
60.0-61.9
Exams
The proposed exam dates are noted above. The Chapters included on each exam will be announced 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, presentations by guest speakers and assigned
readings. The Final Exam will be comprehensive. To each exam you may bring the 8.5"x11" sheet which will
be handed out during class to which you place your hand written notes as indicated. You may continue using
this sheet, for all exams. 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 and sign in sheets will be used to
monitor and will count toward your homework grade. 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 phone ringers, 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.
Appropriate academic accommodation will be made for any student registered through the Office of Disability
Services. Please note only the Office of Disability Services, 210-458-4157, (http://www.utsa.edu/disability/)
may issue instructions for academic accommodations.
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