REAL ESTATE and SOCIETY
BUS 35a
Spring 2014
Monday & Wednesday, 2:00-3:30; location T-B-D
Edward Chazen
Senior Lecturer
echazen@brandeis.edu
Sachar 208
(781) 736 4825
Office Hours: M, W: 1:30-3:00; T, Th: 9:30-11:30
OVERVIEW
This course serves as an introduction to real estate development and investment. Using class lectures,
case discussion, field trips and guest lectures, we will explore the varied dimensions of the largest asset
class in the world. We will learn common industry terminology and how leases are the foundation for
property cash flow; we will learn about design and market research influences on successful projects;
we will learn about the role of the public sector and the community in approval and financing of real
estate -often to advance public purposes - and tension between the private developer and public sector;
we will study affordable and senior housing, with guest speakers; we will learn basic property
valuation methods; and, we will learn about the debt and equity markets to finance real estate.
LEARNING GOALS & OUTCOMES
Know the terminology used in the real estate industry: familiarity with terminology used in
development, financing, leasing and valuation of income property
Understand the characteristics of leases for different property types: how leases are structured,
and landlord and tenant rights and responsibilities
Be familiar with the regulatory environment: property rights and limitations, land use regulations
and the role of local government in project approval and financing
How property value is determined: the influence of property design, market research, capital markets
and public policy on property value, and financial metrics to value property (including discounted cash
flow, cap rate, replacement cost and comparable property methods of valuation)
An introduction to real estate development: managing the approval process; designing a building to
maximize leasing; managing risks in development; understand how land is valued
The roles and responsibilities of the “players” in the real estate business
Understand the sources of capital and the basics workings of the real estate capital markets
Explore societal challenges and opportunities: affordable and senior housing, smart growth and
community engagement, Green/LEED, conservation and demands for open space, historic
preservation and re-purposing of older buildings
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PREREQUISITE: BUS 10a is required.
COURSE REQUIREMENTS
Required Reading
You are required to purchase “The Real Estate Game”, by William Poorvu, published by Free Press. It
can be purchased from Amazon.com in either paperback or hard cover (new or used); the book is
generally out of print but there are multiple copies available from Amazon.com. It is an informative
and easy to read book introducing you to the real estate business. I will assign selected chapters on
LATTE.
There are two Harvard Business School (“HBS”) cases and two HBS notes that you will need to buy.
There are four cases I wrote that will also be part of this course, and they are posted on LATTE. In
addition, you will find on LATTE a copy of the “Real Estate Financial Analysis Workbook” which
you must read for the third class. Read through p.22 in the workbook and do the first four exercises
found in those pages. There are also several articles I will post on LATTE that correspond to the
subject of specific class topics.
I have created a course area on the Harvard Business Publishing online website where you can order
the required materials. Look for Real Estate and Society Spring 2014. The Coursepack link
is: https://cb.hbsp.harvard.edu/cbmp/access/22598604. Note that this information is copyright
protected, so each student MUST purchase their own coursepack and sharing the material from
HBS Publishing is expressly prohibited.
If you have not registered with Harvard Business Online, you will be required to do so. Electronic
course materials are in PDF (Portable Document Format) and should be viewed with Adobe Reader,
available free at www.adobe.com. Students can access PDF files of course materials via a link on
Harvard Business Online for six months from the date of purchase. You will have immediate access to
the materials upon placing your order, for subsequent access, you must login to
http://harvardbusinessonline.org I hope you find this a convenient way to access your course materials.
For technical assistance, please view the Quick Tips section or contact HBS Publishing at 1-800-8108858 or 617-783-7700, from 8am-6pm. They can also be reached at techhelp@hbsp.harvard.edu
Attendance and Participation
Class attendance is required. For six classes, there will be a case assigned and every student is
expected to come prepared to discuss it in detail – regardless if the case is graded, or not. Students are
also expected to be actively engaged in discussing topics during class lectures and guest lectures,
including asking pertinent questions. Class participation is critical; to ensure an effective process,
students are expected to use name cards at every session.
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Academic Honesty
You are expected to be honest in all of your academic work. Instances of alleged dishonesty will be
forwarded to the Office of Campus Life for possible referral to the Student Judicial System. Potential
sanctions include failure in the course and suspension from the University. For the University policy
on academic honesty, please see section 5 of the Rights and Responsibilities Handbook.
Disabilities
If you are a student with a documented disability on record at Brandeis and wish to have a reasonable
accommodation made for you in this class, please see me immediately. Please keep in mind that
reasonable accommodations are not provided retroactively.
Grading
Students will be graded on case study assignments, the mid-term exam, the final take home exam, the
group neighborhood analysis and class participation. Each student is required to submit two individual
case write ups and participate in one team case presentation, as noted below. Within the first week or
ten days of the class starting I will advise each student which individual case they need to submit and
which team they will be assigned to that will present its analysis of one of the assigned cases. The
same teams will do the assigned Neighborhood Analysis.
Students should be prepared to discuss all of the assigned cases, even if a written assignment is not
required for certain cases. I will randomly call on students to present the framework for each case
and how they answered certain questions – so be prepared.
The Neighborhood Analysis will be team projects to research, visit and analyze specific greater Boston
area neighborhoods or communities that have gone through an urban renewal project, and assess the
role of real estate in the renewal effort.
INDIVIDUAL CASE STUDY
20% (10% for each case study)
TEAM CASE STUDY
10%
MID-TERM EXAM
20%
NEIGHBORHOOD ANALYSIS
10%
TAKE-HOME EXAM
20%
CLASS PARTICIPATION*
20%* (see asterisk * below)
* You are entitled to one unexcused absence. After that, each unexcused absence results in a one-step reduction
in your grade (B+ to B, and so on). If you attend each class but don’t contribute to class discussion or ask good
questions you will get a B – for Class Participation. Excellent and meaningful contributions and questions, not
just taking up air time, can earn you an A in Class Participation. You can influence where you will end up in that
range of grading.
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COURSE MATERIALS
TEXT BOOK
“The Real Estate Game: The Intelligent Guide to Decision-Making and Investment”, by William J.
Poorvu; Free Press
WORKBOOK (posted on LATTE)
“Real Estate Financial Analysis Workbook”. Please read and do the first four (4) exercises, pp. 1-22.
HBS CASES
503 Cricket Road
The Schneider Building
(9-396-001)
(9-396-043)
CASES WRITTEN BY E. CHAZEN
Arborpoint at Woodland Station
Prosperidad Plaza
Tama 38
Negev Advanced Technology Park
HBS NOTES
Tenant and Landlord Rights
Financial Analysis of Real Property Investments
(9-804-161)
(9-379-193)
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COURSE OUTLINE
study guides and/or assignments for each class are posted on LATTE
DATE
CASE/READINGS
TOPIC
01/13
Class Lecture and Discussion
HBS Note: Tenant and Landlord Rights
Introduction to real estate and
its common terminology
01/15
Class Lecture and Discussion
Property design and successful real estate
01/22
RE Financial Analysis Workbook
Real estate financial & investment analysis
HBS Note: Financial Analysis of Real Property Investments
01/27
Class Lecture and Discussion
Real estate valuation techniques
01/29
503 Cricket Road
(graded case study)
case study: starting out in real estate
02/3
Class Lecture and Discussion
Real estate public approval process
02/5
Arborpoint at Woodland Station
case study: the approval process
02/10
Guest speaker
Public official in planning & zoning
02/12
Field trip
Linden Square, Wellesley, MA
02/24
Class Lecture and Discussion
Market research in real estate
02/26
Guest speaker
Real estate market research expert
03/3
Prosperidad Plaza
(graded case study)
case study: market feasibility analysis
03/5
Class Lecture and Discussion
The development process
03/10
MID TERM EXAM
03/12
Class Lecture and Discussion
Government role in real estate
Affordable and Low Income Housing
Tax Credits
03/17
Guest Speaker
Affordable housing developer
03/19
Tama 38
(graded case study)
case study: affordable housing in Israel
03/24
Class Lecture and Discussion
Debt and Equity for real estate part 1
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03/26
Class Lecture and Discussion
Debt and Equity for real estate part 2
03/31
Negev Advanced Technology Park
(graded case study)
case study: real estate from the tenant’s
perspective
04/2
The Schneider Building
case study: owning vs. leasing real estate
04/7
Neighborhood Analysis Presentations
Teams 1, 2 and 3
04/9
Neighborhood Analysis Presentations
Teams 4, 5 and 6
04/14
Class Lecture and Discussion
Senior housing
04/23
Guest Speaker
Senior housing expert
04/28
Field trip
Hebrew Senior Life (to be confirmed)
Final Exam
Take home case study
Valuation and risk assessment of a real estate
project
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