MASTER SYLLABUS

INSTITUTION: San Francisco State University (SFSU) – Undergraduate – Ver. 1.0

COURSE: FIN 372: Commercial Leasing and Development – Class Number 3686

TEXT/GUIDE: Real Estate Finance and Investments (REFI), 15th

Edition

www.mhhe.com/bf15e William B. Brueggeman and Jefffrey D. Fisher

ISBN: 978-0-07-337735-3

McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121

SFSU Book Store: Text Book (http://ucorp.sfsu.edu/bookstore)

http://www.amazon.com/Estate-Finance-Investments-William-

Brueggeman/dp/007337735X/ref=sr_1_sc_1?ie=UTF8&qid=1453704678&sr=8-1-

spell&keywords=brueggemand+and+fisher

Finance for Real Estate Development (FRED) Charles Long

ISBN: 978-0-87420-157-4

Real Estate Devvelopnent: Principles and Process (REDP), 5th

Ed. Mike Miles, Laurence M. Netherton, and Adrienne Schmitz

ISBN: 978-0-87420-343-1

Urban Land Institute, 1025 Thomas Jefferson Street, NW, Suite 500 West,

Washington, DC 2007-5201

Calculators:

Texas Instruments (TI BAA II) –

(http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-

keywords=TI+BAII+Plus88)

HP 10bII+ Financial Calculator (NW239AA)

http://www.amazon.com/HP-10bII-Financial-Calculator-

NW239AA/dp/B0002ABA8E/ref=sr_1_fkmr0_3?ie=UTF8&qid=1422248142&sr=

8-3-fkmr0&keywords=TI+BAII+Plus88)

Serial Number: PG5GP9PPPGRC88 http://tobsefin1.swlearning.com

INSTRUCTOR: Professor Lawrence A. Souza, CRE/FRICS/CCIM

Principal – Real Estate and Financial Economist/Advisor, Johnson/Souza Group

Senior – Investment Economist/Advisor – Pillar6 (101 California St. SF CA)

Email: larry@pillar6.com Website: www.pillar6.com

Cell: 415-713-0213 Home Office/Fax: 650-290-8189

Work E-mail: Lsouza@johnsonsouzagroup.com

SFSU E-mail: lsouza@mail.sfsu.edu

Website: www.the-commercial-group.com

Office: SCI 308 Office Hours: Mon/Wed/Fri 11:00 am to 12:00 pm

MEETINGS: Monday, Wednesday and Fridays Start January 27th - Final May 17th (15),

10:10 – 11:00 AM

Last Day of Instruction + Oral Exams + Valuations.

Meeting Room: Business Administration Room 222

1600 Hollow Avenue, San Francisco CA 94132.

2

OFFICE HOURS: By Appointment (1600 Holloway Ave, San Francisco CA 94132)

11:00 am to 12:00 pm In Class Room and SCI 308

Phone Number During Office Hours: (415-713-0213)

Cell Phone: (415-713-0213)

RESOURCES: Research/Library: The J. Paul Leonard Library

Web Site: www.library.sfsu.edu

Department of Finance: SCI 300 Phone: 415-338-1107

Website: http://cob6.sfsu.edu/finance

Email: findept@sfsu.edu

Tutoring Support/The Learning Assistance Center (LAC): Offers tutoring for

undergraduate SF State students in the following areas: reading, writing, math,

sciences and study skills for courses across disciplines. Tutors meet individually

and in groups with students in both lower and upper division courses, HSS 348,

open Monday through Thursday, 9:00 am - 4:00 pm, and Friday, 9:00 am - 12:00

am. (415) 338-1993 or www.sfsu.edu/~lac register and make appointments.

Students can find tutoring services offered by programs and departments.

Information at http://www.sfsu.edu/~lac/tutorsubject.html.

Undergraduate Advising Center: Administration Building 211

Current Student Advising: 415–338–2103. ORIENTATION Inquiries: 415-338-

3060/415-338-1304 E-Mail: advising@sfsu.edu

Daily Quick Question hours (for CURRENT students only): 10am to 4pm M – Th

Advising Center is closed on Fridays (starting October 1st). The Advising Center

staff will be involved in projects and advising related activities across campus.

Writer’s Resources:

http://academics.smcvt.edu/cbauer-ramazani/BU113/memo_guide_citations.htm

http://www.csun.edu/bus302/Course/Communication/samplememo.pdf

http://grammar.ccc.commnet.edu/grammar/

http://bcs.bedfordstmartins.com/writersref6e/Player/Pages/Main.aspx

http://www.ggu.edu/libraries

http://turnitin.com/

http://www.merriam-webster.com/

Business Writing Tutorial/Guidelines

http://www.spellchecker.net/spellcheck/

http://www.spellchecker.net/grammar/

http://office.microsoft.com/en-us/word-help/check-spelling-and-grammar-

HP010354279.aspx

http://video.search.yahoo.com/search/video?p=Business+writing+videos

http://www.youtube.com/watch?v=oDTPxMBemDM&noredirect=1

Memo Writing Guidelines:

http://www.ehow.com/video_4790516_write-formal-business-memo.html

http://academics.smcvt.edu/cbauer-ramazani/BU113/memo_guide_citations.htm

http://www.lupinworks.com/roche/pages/memos.php

3

Review Courses:

Macroeconomics (http://www.youtube.com/watch?v=d8nDkLExqDg)

Monetary Policy (https://www.youtube.com/watch?v=_SpIaGTq0u8)

Microeconomics: (http://www.youtube.com/watch?v=8FVblgewNBE)

Statistics: (http://www.youtube.com/playlist?list=PLE67E2A377F60E85A)

Advance Probability/Statistics:

(https://www.youtube.com/watch?v=0P5WRKihQ4E&list=PLY2SK_8yBO17t1k0

bT--3AHIfPieLi1oW)

Multiple Regression: (https://www.youtube.com/watch?v=AkBjJ6OunR4)

Calculus: (https://www.youtube.com/watch?v=CtRAHmeWSC0)/(

https://www.youtube.com/watch?v=fYyARMqiaag&list=PLF797E961509B4EB5)

Matrix/Linear Algebra: (https://www.youtube.com/watch?v=T_aiofOSWfI)/(

https://www.youtube.com/watch?v=xyAuNHPsq-

g&list=PLFD0EB975BA0CC1E0)

Time-Series Forecasting: (https://www.youtube.com/watch?v=EaqZP36ool8);

(https://www.youtube.com/watch?v=k9dhcfIyOFc);

(https://www.youtube.com/watch?v=FUmMucmQzZM);

(https://www.youtube.com/watch?v=zlZaOnBbpUg&list=PL436A4F939FBE10D7)

; (https://www.youtube.com/watch?v=f9tyljdHQaA);

(https://www.youtube.com/watch?v=F3Kjdz4K7vE&list=PL1A0EF77860E94EB3)

Econometrics: (http://www.youtube.com/course?list=ECFB79C7150CFA622E)

Computational Finance and Financial Econometrics:

(https://www.youtube.com/watch?v=Ouu86i3DE0)/(

https://www.youtube.com/watch?v=XTkpdkWVfOU&list=PL58gEE9UNSimFCR

_z068GIGi88wc8Momp)

Quantitative Finance: (https://www.youtube.com/watch?v=vZXCq2fn-

Z0&list=PL8DC1113ADB63358E)/

(https://www.youtube.com/watch?v=vTs2IQ8OefQ&list=PL3F00F1C2D402D45C)

Quantitative Data Analysis:

http://video.search.yahoo.com/search/video?p=Quantitative+Data+Analysis+Video

Discounted Cash Flow Analysis (DCF):

(https://www.youtube.com/watch?v=jfcRUzKZZE8)/(

https://www.youtube.com/watch?v=gLUlP6jyFvE)/(

https://www.youtube.com/watch?v=XTBfH1MbxPE)/(

https://www.youtube.com/watch?v=bkkrJJHFz2g&list=PL5hdd9oiuWS_zICz2Qp7

N6wwp1__qce27)/( https://www.youtube.com/watch?v=83yR6EFEl5Y)

4

Financial Accounting: (http://www.youtube.com/watch?v=cZZ_LF1NxgI)

Financial Statement Analysis: (http://www.kgaction.com/financial-statement-

analysis/introduction/)

Financial Ratio Analysis: (https://www.youtube.com/watch?v=XnL6Gom7N3w)/(

https://www.youtube.com/watch?v=_43qbh8Bzwk)/(

https://www.youtube.com/watch?v=TZZFBkbC2lA&list=PLE762D7C2878F4C8A

)/( https://www.youtube.com/watch?v=Ri0XfJuru8s)

Commercial Real Estate Leasing:

https://www.youtube.com/results?search_query=Commercial+Real+Estate+Leasing

Commercial Real Estate Asset Management:

https://www.youtube.com/results?search_query=commercial+real+estate+asset+ma

nagement

Commercial Real Estate Development:

https://www.youtube.com/results?search_query=Commercial+Real+Estate+Develo

pment%3A+

Commercial Real Estate Valuation:

https://www.youtube.com/results?search_query=Commercial+Real+Estate+Valuati

on

Commercial Real Estate Finance:

https://www.youtube.com/results?search_query=Commercial+Real+Estate+Finance

%3A+

Real Estate Investment Trusts (REITs):

https://www.youtube.com/results?search_query=Real+Estate+Investment+Trusts

https://www.youtube.com/results?search_query=Valuing+Real+Estate+Investment

+Trust+Securities

Commercial Mortgage Backed Securities (CMBS):

https://www.youtube.com/results?search_query=Commercial+Mortgage+Backed+S

ecurities+%28CMBS%29

https://www.youtube.com/results?search_query=Valuing+Commercial+Mortgage+

Backed+Securities+%28CMBS%29

5

PREREQUISITES: ACKNOWLEGEMENT TITLE V. Article 2. Standards for Student Conduct

http://conduct.sfsu.edu/conduct/standards

Students are expected to be good citizens and to engage in responsible behaviors

that reflect well upon their university, to be civil to one another and to others in the

campus community, and contribute positively to student and university life.

Acceptance and acknowledgement of this Syllabus

stipulates that you understand and will adhere to the

standards spelled out under Title V. Article 2

Statement on Cheating and Plagiarism

Cheating is the actual or attempted practice of fraudulent or deceptive acts for the

purpose of improving one’s grade or obtaining course credit; such acts also include

assisting another student to do so. Typically, such acts occur in relation to

examinations. However, it is the intent of this definition that the term ‘cheating’ not

be limited to examination situations only, but that it include any and all actions by a

student that are intended to gain an un-earned academic advantage by fraudulent or

deceptive means. Plagiarism is a specific form of cheating which consists of the

misuse of the published and/or unpublished works of others by misrepresenting the

material (i.e., their intellectual property) so used as one’s own work. Penalties for

cheating and plagiarism range from 0 or F on a particular assignment, through an F

for the course, to expulsion from the university. For more information on the

University’s policy regarding cheating and plagiarism, refer to the University

Catalog (‘Policies and Regulations’).

Statement on Services for Students with Disabilities

Americans with Disabilities Act (ADA) Accommodations: The University is

committed to providing reasonable academic accommodations to students with

disabilities. The Disability Programs and Resources Center provides university

academic support services and specialized assistance to students with disabilities.

Individuals with physical, perceptual, or learning disabilities as addressed by the

Americans with Disabilities Act should contact Services for Students with

Disabilities for information regarding accommodations. Please notify your

instructor so that reasonable effort can be made to accommodate you. If you expect

Accommodation through the Act, you must make a formal request through

Disability Programs & Resources Center in SSB 110, Telephone 338-2472.

PLEASE SUBMIT PREREQUISIT GRADES WITH PRE-TEST

FIN 350: Business Finance. Sources, methods, and instruments used by

firms in obtaining and utilizing funds, in domestic and international

markets, for short- and long-term operations, designed to maximize

shareholders' wealth.

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ACCT 100: Introduction to Financial Accounting. Objectives, basic

theory, principles, and methods of financial accounting. Reports as a

framework for decision-making. Measuring and reporting financial position

regarding income, costs, and revenue.

ACCT 101: Introduction to Managerial Accounting. Use of accounting

information to plan and control an organization's financial activities.

Processes used to plan and control costs and expenditures. Quantitative

techniques used to evaluate alternative choices.

ECON 101 Introduction to Microeconomic Analysis: Basic analysis of

prices and markets; consumer behavior; behavior of the firm; factor

markets. [GE].

ECON 102 Introduction to Macroeconomic Analysis: Basic economic

methodology, analysis, and policy; economic institutions, organizations, and

industrial structure; the monetary system; measurement, determination, and

stability of national income; monetary, fiscal, and balance of payments

problems and policies. (Formerly ECON 100.) [GE].

MATH 70 Algebra II: Algebra II course in graphing linear, quadratic,

exponential, and logarithmic functions and in solving quadratic equations,

equations involving rational expressions and radicals, and linear systems of

equations.

DS/MATH 110 Business Calculus: Functions, derivatives, and integrals.

Applications of differentiation and integration, including optimization and

moving averages. Problems involving business, finance, and economics.

Elements of basic calculus. (Plus-minus letter grade/NC grading only).

DS/MATH 212 Business Statistics I: Statistical methods essential in

solving business problems including probability distributions, estimation

and tests of hypotheses, and regression analysis or

DS/MATH 226 Calculus I: Differentiation: theory, techniques, and

applications. Integration: Fundamental Theorem of Calculus and

applications. Transcendental functions. (Plus-minus letter grade/NC grading

only).

DS/MATH 199 Pre-Calculus: Functions, graphing techniques,

exponentials and logarithms, trigonometry.

ISYS 263 Introduction to Information Systems: Application of

information systems (IS) in a business environment. Topics include

information technology (IT), networks and internetworks, types of

information systems and their development, problem solving using end-user

tools, and social impact of IT.

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Other Courses: Not required but valuable. Advance Financial and Managerial

Accounting for Management Decision-Making; Principals of Microeconomics,

Macroeconomics, and Monetary Policy; Capital Markets and Budgeting,

Investments and Financial Institutions; Derivatives and Quantitative Finance,

Calculus, Elements of Statistics for Business and Economics, Econometrics and

Quantitative Data Analysis.

**** Understand/Read Syllabus: SFSU Standards of Student Conduct. This is your acknowledgement that you have reviewed and understand the syllabus

requirements and the standards of academic integrity, and that you are responsible

for these requirements and standards reflected by your acceptance of this syllabus.

No Cell Phone Use, No Computer Use

Other Than Note Taking, In Class Online Research

No Texting or Checking Phone for Email, Facebook, Etc.

PHONE: At Work from 9:00 AM to 5:00 PM Monday - Friday

Cell: (415) 713 - 0213

E-MAIL/WEBSITE: lsouza@johnsonsouzagroup.com (Identify the Class and Name in Subject Line)

www.the-commercial-group.com (See Resources page)

Course Description

FIN 372 – R1 – Commercial Leasing and Development. Application of acquired classroom knowledge

to a real-world commercial leasing case addressing the financial challenges of a redevelopment case that

has evaded a financial resolution for nearly 20 years. Focus on components of the proposal such as the

entitlement process, leasing, financial management, investor financing, and sustainable business issues.

Real estate financing from the viewpoint of borrower and lender, financing mathematics, legal aspects of

lending, appropriate financial instruments, taxes and real estate, loan cost analysis, loan valuation,

development and assumability. Mortgage markets/institutions considered together with alternative

financing techniques for various types of properties.

This course is also a foundation course for future course work in corporate finance, trading strategies and

structured finance, intermediate financial management, financial institutions, financial statement analysis,

capital budgeting, long-term financing, working capital management, bank and thrift management,

derivatives and financial engineering, portfolio management, venture capital, and real estate finance,

investment analysis and valuation/appraisal.

Other topics discussed include efficient market theory; risk and return analysis for stocks, bonds and cash

equivalents; modern portfolio theory; asset pricing models; bond pricing and the term structure of interest

rates; effects of taxes and inflation on investment choices; and derivative asset-liability analysis.

Memos, mini-reports/homework, case analysis and exams are used for academic and professional skills

development.

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Course Goals, Objective and Topics of Discussion

FIN 372 Business Finance is an undergraduate level course in real-world commercial real estate leasing,

financing, and development; and focusing development and the entitlement process, leasing, financial

management, investor financing, and sustainable business issues.

This course is modeled after courses developed and delivered at top universities across the U.S.: Stanford,

USC, Harvard, Wharton, UC Berkeley, MIT, Chicago, Columbia, NYU, London School, etc.

This course is a foundation course for future course work in corporate finance, trading strategies and

structured finance, intermediate financial management, advanced financial institutions, financial statement

analysis, capital budgeting, long-term financing, working capital management, bank and thrift

management, derivatives and financial engineering, portfolio management, venture capital, and real estate

finance, investment analysis and valuation/appraisal.

This course will focuse on contemporary real estate financial institutional analysis and management, based

on a solid foundation in macroeconomics and and monetary policy, corporate finance theory, financial

products and applied techniques using standardized exchanged based and Over –the- Counter (OTC)

financial products used for investment, financial institution portfolio construction and asset-liability

management, structured product development and application, trading and liquidity needs by financial

economists, managers, traders and analysts, and instituaitonl managers.

This course will also intuitively look at how to integrate the interrelationships between business and

financial economic conditions into interest and discount rate determination, (intrinsic) asset valuation and

price forecast methods, and anticipated and unanticipated effects of (global) fiscal and monetary policy

and events on short-term and long-term investment and portfolio allocation and trading decisions, and

how financial institutional managers manage these risks in real time on a global basis.

Topics recommended for additional study beyond course content are: global political philosophy and

economy, financial institutional accounting and financial analysis, market failures policy responces, and

short- long- term implications on capital market structures, efficiency, development, and allocative

impacts on the real economy, socio-demographic segments and geography.

These factors have a direct and indirect impact on the ability to manage the asset and liability side of a

financial institutions balance sheet and income statement, raise debt and equity funds in the capital

markets at minimum cost to borrowers and risk to investors, timing of capital issuance, allocation of funds

among short- and long-term durations, working capital and cash management techniques, asset and

product capital budgeting decisions, long-term capital structuring in volatile markets, corporate and

government fixed-income securities analysis, and dividend and leverage policy.

The text for this course has been used for years, and it is recccomended that those interested in a career in

merchant or commercial banking pursuing the Chartered Financial Analyst (CFA) designation (CFA

Institute - https://www.cfainstitute.org/pages/index.aspx http://www.cfasanfrancisco.org/).

Requirements for the course include selected chapters while simultaneously working problems sets,

taking oral exams, reading current business and finance news (Financial Times --

http://ftepaper.ft.com/signin) Account Number: 2339074FTU1 Password: larrysft ; and/or Wall

Street Journal -- http://online.wsj.com/home-page); The Economist – www.economist.com Email:

9

Lsouza@JohnsonSouzaGroup.com Password: Professor1961; and writing memos forecasting stock,

bond, real estate, commodities or other alternative assets trading in the capital markets, and making

porfoilio and trading recommendations for institutional and retail clients to maximize risk-adjusted rates

of return based on suitibilty.

It is also recommend that you go to the following websites and register with them to receive their email

distributions on the latest macroeconomic and stock/bond market articles: 1) Seeking Alpha

(http://seekingalpha.com/) and Global Association of Risk Professionals – GARP

(http://www.garp.org/?sctp=PPC&scvn=Google&scsrc=Google_Search&sckw=garp&utm_source=

Bing&utm_medium=Paid_Search&utm_term=garp&utm_campaign=TGW_Spring_Reg#!/home)

This course is an introduction to real estate, financial systems, analysis, instruments and portfolio

management theory and its applications, but will also be keeping up and continuously applying relevant

current economic and capital market events, and their constant impact on changes in interest and discount

rates (Weighted Average Cost of Capital – WACC = Weighted Cost of Debt and Equity) and intrinsic

values of real and financial asset values.

The goal of this course is to give you the student a solid foundation in the core competencies and

applications in contemporary standardized and customized real estate finance and investments, financical

products, their development and innovatione, and financial economics and engineering; preparing you the

student for future graduate and post-graduate studies and professional approaches to:

Financial product design, trading and portfolio management; financial reporting and analysis;

Financial modeling and analytics;

Management control and information systems;

Capital budgeting and long-term financing;

Working capital and liquidity management;

Mergers and acquisitions;

Venture and private equity capital management;

Entrepreneurship in both the real and financial companies and institutions;

Financial strategy and firm level value creation;

Financial analysis of industries and competitors;

Investments; international corporate finance, institutions and capital markets;

Fundamental and technical securities analysis;

Derivative markets and structured instruments;

Financial engineering and quantitative risk management;

Advanced options pricing theory and derivative applications;

Modern and post-modern portfolio management;

Bank and thrift income statement and balance sheet management;

Tax, trust, insurance, annuities, investment and retirement planning;

Business valuation and financing; business strategy, marketing, and management;

Real estate finance, investments, development, and asset management.

Course discussions will include topics and try to answer answer questions such as:

What is the capitalist market system and how does it work compared to other global systems?

What affect does low/rising U.S./Global savings rates have on the capital markets?

How do monetary and fiscal policies affect the capital markets and capital market instruments?

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What affect do federal deficits and national/corporate debt have on interest rates and required rates

returns, costs of capital, and discount rates?

What causes interest rates or yields for corporate and government debt to rise and fall?

How has the institutional framework of the financial system change through out the 70s, 80s, 90s, and

00s?

What are business, credit/capital market cycles? Fluctuations in interest rates and yield curves.

What are the capital markets? Debt, Equity, Commodities, Real Estate, Etc.

What is the definition of capital markets and how do you value capital market instruments?

What is the affect of inflation and disinflation expectations on capital market instruments?

What is financial, portfolio and asset-liability management, how is it used and who uses it?

What is financial innovation and risk management, and how do ou apply the tools available?

What is the definition, causes and measurement of volatility (risk in the capital markets)?

How do you measure expected/excess return on financial instruments?

What are risk-adjusted returns? Why are they important as a risk-averse investor?

How do you build and manage an institutional portfolio of public and private fixed-income, equity,

structured and standardized product, and alternative assets?

Specific Topics

Topics targeted for discussion in this course::

Statistical Review: Beta, Correlation, Covariance, Variance, Standard Deviation, Mean/Median

Forecasting Interest Rates/Discount Rates: Term Structure of Interest Rates and Yield Curve Theory

Financial Markets, Institutions, and Instruments (Macro/Micro Prudential)

Applied Financial Management (Corporate, Business, Finance, Marketing and Operations)

Analyzing Financial Statements (Income Statement, Balance Sheet, Cash Flow Statement)

Cash Flows, Management, and Liquidity (NOI, EBITDA, Earnings, Dividends)

Time Value of Money – Probabalistic Value Determination (Present and Future)

Stock, Bond, Real Estate, Commodity Price/Intrinsic Valuation (Bid-Ask Spreads)

Capital Budgeting/Discout and Growth Rate Determination – NPV/IRR/MIRR

Technical Trading Strategies, Systems and Execution

Other related topics include:

Weighted Average Cost of Capital (WACC)/Optimal Capital Structure (Minimum + M&M Theory)

Multinational financial management techniques (global capital markets, flows and currency)

The use of derivatives and risk management techniques (Futures, Forwards, Options, SWAPS)

Hybrid financing techniques (Structured Products and Convertibles)

Mergers and Acquisitions, Leverage Buy Outs (M&A/LBO), and Venture Capital

Taxes (Corporate and Personal)

Value –At- Risk (VAR) Determination and Heading Strategies

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Course Design

FIN 372 Commerial Leasing and Development is designed to introduce undergraduate business

management and public administration, marketing and advertising, information systems and project

management, accounting and tax, economics, finance, banking and real estate majors for professional

careers in both direct (private) and indirect (public) financial and government institutions, and business

and entrepreneurial enterprises.

The course will be taught on three levels: 1) traditional management procedures and techniques

(homework and problems); 2) written exams in fundamental capital market, firm and securities product

analysis; and 3) mini case studies, memo reports and presentations/participation.

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FIN 372-01: Commercial Leasing and Development

Spring 2016 Schedule: (16 Weeks) Mon/Wed/Fri 10:10 am –to- 11:00 am

Wed/Fri Jan 27th

/29th, 2016 (1): Introduction & Course Overview Course Introduction and Expections

Lecture: Statistics, Accounting, Finance, Macro-Econ Review

Assessment-Test: Statistics, Accounting, Finance and Economics

Chapter 1-2 (BF): Real Estate Investment: Basic Legal Concepts; Real Estate Financing: Notes

and Mortgages. Chapter 1 (REDP): Into to the Real Estate Development Process; and Chapter 1

(FRED): The Development Process.

Yield Curve Dynamics vs. Dynamic Yield Curves

Linked are three videos going over Yield Curve Dynamics and their affect on Discount Rates (Cost of Equity/Debt and

Weighted Average Cost of Capital (WACC). In almost all finance models, there is the risk-free rate (U.S. Treasury Yields on

bond of differing maturities). The risk-free rate (nominal interest rates) is the Real Interest Rate (RR) plus Inflation

Expectations (e*); this is the Fisher Equation. Yield curves move up and down based on changes in the RR and e*, but mainly

from e*. The short end of the yield curve is managed and manipulated by the Federal Reserve through Open Market Operations

(OMO). If the Fed sells bonds, bond prices go down, and interest rates go up; and if the Fed buys bonds, bond prices go up, and

interest rates go down. The Fed does this to regulate credit availability in the economy to stimulate or slow economic growth

and manage asset prices.

Yield Curve Dynamics I (https://youtu.be/tYBlZDigcKE)

Yield Curve Dynamics II (https://youtu.be/ldIe7DX5zeY)

Yield Curve Dynamics III (https://youtu.be/Ua8AGfuyAMk)

Go to Webpage and Click Animate!!!! This shows the dynamics of the Yield Curve over the Business/Stock Market Cycle:

http://stockcharts.com/freecharts/yieldcurve.php

Note: See Powerpoint Presentations and Articles posted to course website.

Mon/Wed/Fri February 1st/3rd/4th, 2016 (2):

Chapter 3-4 (REFI): Mortgage Loan Foundations: The Time Value of Money; Fixed

Interest Rate Mortgage Loans. Chapter 2 (REDP): The Raw Material: Land and

Demographics in the United States; and Chapter 2 (FRED): Basics of Real Estate Finance.

Pres-Test Due/Review

Assign Homework #1 Monday February 1st

Chapt 1: DQ: 1, 2, 4; Chapt 2: DQ: 1, 2,6, 9, 10, 11, 14, 16, 19. DP: 1, 2, 3, 4, 5. HWP: 5;

Chapt 3: DQ: N/A. DP: 1, 2, 3, 4. HWP: 12, 13, 18; Chapt 4: DQ: 2, 4, 5, 6, 7, 8, 11, 13,

13

14. DP: 2, 10, 11, 13. HWP: 15, 17, 19, A-3 Excel; Chapt 5: DQ: 4, 6. DP: 1, 2, 4, 5.

HWP: 11, 12, 13 Excel; Chapt 6: DQ: 2, 3, 7. DP: 1, 2, 3, 4. HWP: 6, 8, 9.; Chapt 7: DQ:

1, 4. DP 1, 3. HWP: 5, 6; Chapt 8: N/A

Note: Discussion Questions (DQ) In-Class, Discussion Problems (DP) In-Class, and Homework

Problems (HWP)– Due to Submit on Due Date.

Mon/Wed/Fri February 8th/10th/12th, 2016 (3):

Chapter 5-6 (REFI): ; Adjustable and Floating Rate Mortgage Loans; Mortgages: Additional

Concepts, Analysis and Applications. Chapter 3 (REDP): Developers and Their Partners; and

Chapter 3 (FRED): Land Valuation for Acquisition.

Memo I Due

Mon/Wed/Fri February 15th/17th/19th, 2016 (4):

Chapter 7-8 (REFI): Single-Family Housing: Pricing, Investment, and Tax Considerations;

Underwriting and Financing Residential Properties; Chapter 10 (REDP): Real Estate Finance:

Background; and Chapter 5 (FRED): Capital Markets for Real Estate.

Homework #1 Due Friday February 19th

+ Homework/Quiz I Review

Mon/Wed/Fri February 22nd/24th/26th, 2016 (5):

Quiz I: Chapters 1 – 8

Mon/Wed/Fri February 29th/March 2nd

/4th, 2016 (6):

Quiz I Review

Chapter 9-10 (REFI): Income-Producing Properties: Leases, Rents and the Market for Space;

Valuation of Income Properties: Appraisal and the Market for Capital. Chapter 11 (REDP): Real

Estate Finance: The Basic Tools; and Chapter 6 (FRED): Obtaining Finaning for Devvelopment.

Memo I + II Due

***Assign Homework #2***

14

Chapt 9: DQ: 1, 2, 3, 4, 5, 6, 7. DP: 1, 2, 3, 6, 7, 8. HWP: 10. Chapt 10: DQ: 1, 2, 3, 4, 5,

6, 7, 8, 9, 10, 11, 12, 13. DP: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 12, 13. HWP: 14, 15, 16; Chapt

11: DQ: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13. DP: 1, 2, 3. HWP: 4 Excel, 5.; Chapt 12:

DQ: 1–5, 6, 7–9, 10–12. DP: 1, 2, 5, 6, 7, 8. HWP: 3, 4, 9 Excel.

Chapt 13: DQ: 1, 2, 3, 4, 5, 6, 8. DP: 1, 2, 5. HWP: 3, 4 Excel; Chapt 14: DQ: 2, 4, 6, 7, 9,

10, 12, 16. DP: 1, 2, 3, 4. HWP: 5, 6, 7 Excel .

Mon/Wed/Fri March 7th/9th/11th, 2016 (7):

Chapter 11-12 (REFI): Investment Analysis and Taxation of Income Properties;

and Financial Leverage and Financing Alternatives. Chapter 13 (REDP): Stage Three: The

Feasibility Study. Chapter 4 (FRED): Task Management; Chapter 7: Developent Entity, Joint

Ventures, and Financing Structure.

Memo I + II + III Due

Mon/Wed/Fri March 14th/16th/18th, 2016 (8):

Chapter 13-14 (REFI): Risk Analysis; Disposition and Rennovtion of Income Properties. Chapter

15 (REDP): Construction. Chapter 8 (FRED): Managing the Entitlement Proess for Financial

Viability.

Memo I + II + III + IV Due

Mon/Wed/Fri March 21st/23

rd/25

th, 2016: SPRING BREAK!!!

Mon/Wed/Fri March 14th/16th/18th, 2016 (9):

Chapter 15-16 (REFI): Financing Corporate Real Estate; and Financing Project Development.

Chapter 8 (REDP): Decision Makers and Stakeholders, and Chapter 9: Stage One of the

Development Process. Chapter 10 (FRED): Chapter 10: How Developers Get Capital.

Homework #2 Due + Homwork/Midterm II Review

15

Mon/Wed/Fri March 28th

/30th

/April 1st, 2016 (10):

Mid-Term II – Chapters 9-15

Mon/Wed/Fri April 4th

/6th

/8th, 2016 (11):

Chapter 17-19 (REFI): Financing Land Development Projects; Structuring Real Estate

Investments: Organizational Forms and Joint Ventures; and The Secondary Mortgage Market:

Pass-Through Securities. Chapter 12 (REDP): Ideal Refinement, and Chapter 14: Contract

Negotiation and FormalCommitment. Chapter 14 (FRED): Task Management and Budgeting.

Homework #3 Assign + Midterm Exam Review

Chapt 15: DQ: 2, 3, 4, 5, 7, 8, 11, 14. DP: 1, 2, 3 HWP: 4 Excel; Chapt 16: DQ: 4, 14, 15.

DP: 1, 2, 3. HWP: 4 Excel; Chapt 17: D1, 2, 3, 4, 5. DP: 1, 2, 3. HWP: 4 Excel; Chapt 18:

DQ: 1, 2, 3, 4, 5, 6, 7, 8. 9, 10, 11, 12, 13, 14, 15. DP: 1, 2, 3. HWP: 4 Excel; Chapt 19:

DQ: 2/3, 4/5, 6/7, 9/8. 8, 11, 12. DP: 1, 2. HWP: 3 Excel;

Homework #4 Assign

Chapt 20: DQ: 1-3, 4-10. DP: 1, 2, 3. HWP: 4-7 Excel; Chapt 21: DQ: 4. DP: 1, 4. HWP:

3 Chapt 22: DQ 1- 12. DP: 1. HWP: 2; Chapt 23: SDQ: 1-10. DP: 1, 2, 3, 4. HWP: 5.

Mon/Wed/Fri April 11th/13th/15th, 2016 (12):

Chapter 20-21 (REFI): The Secondary Mortgage Market: CMOs and Derivative Securities; and

Real Estate Investment Trusts (REITs). Chapter 16 (REDP): Marketing, Sales, and Leasing and

Chapter 17: Property, Asset, and Portfolio Management.

Memo I + II + III + IV + V Review I

Mon/Wed/Fri April 18th/20th/22nd, 2016 (13):

Chapter 22-23 (REFI): Real Esate Investment Funds: Structure, Performance, Benchmarking, and

Attribution Analysis. Chapter 7 (REDP): The Role of the Regulatory Sector; Chapter 4: Colonial

Period to the Late 1800s; Chapter 6: The Modern Era: World War II to the Present; Chapter 18:

Prepairing for the Future.

Memo I + II + III + IV + V Review II

16

Mon/Wed/Fri April 25th/27th/29th, 2016 (14):

Assign Take-Home Final + Stock Valuation Case Studies (2):

REIT Stock Valuation Presentation Outline

Financial and Accounting Information

Homework #3 + #4 Due

Mon/Wed/Fri May 2nd

/4th

/6th, 2016 (15):

Group Oral Exams/Stock Valuation Presentations (I):

Kilroy, Inc./ PPT Presentation/Pitch Book Due

Mon/Wed/Fri May 9th/11th

/13th, 2016 (16):

Group Oral Exams/Stock Valuation Presentations (II):

Avalon Bay /PPT Presentation/Pitch Book Due

Mon May 16th

(17): 10:10 – 11:00 am

Last Day of Class:

- Course Review + Exite Lecture

- Deliverable #4 (Due)

o Cover Page

o Memos I – V (Due)

o Homework #3/#4 (Corrected Due)

o Take-Home Final Exam Ch 25-30

(Due)

o REIT Stock Valuation

Presentations (2) –

Edited/Bound/Published (Due)

17

Grading and Assignments

Homework and Exams

There will be assigned homework/memos, one quiz, midterm and comprehensive final exam.

Percent of

Requirements Total Grade Total Points

Memos (#1 - #5) (20 pts each) – Thesis State + Forecast

Homework (#1 - #4) (50 pts each) – Answer all bold questions

10.0%

20.0%

100

200

Quiz (Closed Book/No Notes or Computer) 15.0% 150

Midterm (Closed Book/No Notes or Computer) 25.0% 250

Written/Oral/Project Final/Presentations (Power Points, etc.) 30.0% 300

Course Total

Extra Credit: Individuel/Group Participation +

Statistical Pre-Test + Attendance

100.0% 1000

Course Grading Scale*: 1000 – 930 points = A 850 – 830 points = B 750 – 730 points = C 650 – 600 points = D

920 – 900 points = A- 820 – 800 points = B- 720 – 700 points = C- 590 & below = F

890 – 860 points = B+ 790 – 760 points = C+ 690 – 660 points = D+

*The scale reflects the total points needed to receive the above grade in this course.

Other Class Policies

The structure of this class makes your individual study and preparation outside class extremely important.

The lecture material will focus on the major points introduced in the text and/or other material. Reading

the assigned chapters before the lecture will assist your understanding. It is necessary that you

bring your Financial Calculator (HP10B/12C/Etc.) to every class and exam.

Written Assignment Guidelines Written assignments are to be typed, double spaced and spell and grammar checked. Assignments are to

be one –to- two pages long, with the article attached/pasted on a sheet of paper to the back of the memo.

For example, since November 2007 there has been reports from the Fed, Wall Street firms, financial

institutions, econometric and consulting firms, and other local and regional economic research firms

indicating that the economy has peaked, declined and is bottoming: negative or below trend GDP growth

rates, excess capacity utilization, de-or-dis inflation, contraction then rapid expansion in the money

18

supply, falling (rising) employment (unemployment) rates, negative-low employment growth rates,

falling-low retail sales, negative-low business investment, negative-low construction levels, negative-low

home building permits, starts and construction, etc.

You are concerned with this activity domestically and in an international context. Building your case with

these current or recently announced business and capital market condition indicators, explain where you

think inflation and interest rates (yield curve) are going, both long and short-term, and what affect they

will have on the bond, stock and real estate markets, and the ability to raise and invest capital in the

capital markets at a positive spread (IRR – WACC = +/- Spread).

These assignments require that you to copy, read and synthesize significant articles regarding economic

and capital market indicators for your (intrinsic) valuation/price analysis. You are required to attach these

articles to your analysis, and submit them with your analysis.

These articles should help you solve capital market and investment decisions. The goal of the written

assignments is for you to apply real life (applied) financial economic policy decisions surrounding asset

value, price, return and cost of capital , those similar to what a chief executive of a major firm would

make.

Full credit will be given to those assignments that successfully apply contemporary monetary and financial

policy analysis and theories, along with the Writing Guidelines. If papers do not meet these

requirements, at graduate level writing and presentation standards, they will be downgraded

significantly. Papers will be returned and will not be accepted until they have been gone through and

approved by the GGU Writing Center, meeting the minimum academic and business professional

writing requirements and standards.

Severe penalties will be applied to those papers lacking financial economic and capital market theory

logic. The student is encouraged to find mentors outside of the class to help them reach their writing

goals (Writing Center, Et.Al.).

WRITING EVALUATION GUIDELINES

1. Thesis

Is there a thesis statement?

Is there a controlling idea?

Is the thesis statement clear?

Is the thesis workable?

2. Topic Sentences and Paragraphs

Does each paragraph have a topic sentence?

Does each paragraph have a controlling idea?

Does each paragraph support the thesis?

Are the paragraphs clear?

19

3. Support

Is there enough support for the thesis?

Does each paragraph support the topic sentences?

Is it concrete, detailed, specific?

4. Introduction/Conclusion

Does the introduction gain attention?

Does it announce the topic?

Is the conclusion satisfactory?

Is it memorable?

5. Transitions

Are transitions present?

Are they smooth?

6. Grammar/Spelling/Word Usage

Are there any awkward, unclear sentences (words)?

Are the tenses consistent?

Are agreements and endings correct?

Is there sentence variety?

Is the passive voice, compared to the recommended active, voice overused?

Are there more words than necessary?

Are spelling and punctuation correct?

Are the pronoun references clear?

Other Resources

Licenses and Certifications:

American Institute of Public Accountants (AICPA) - Certified Public Accountant (CPA)

http://www.aicpa.org/ Schweser: http://www.schweser.com Becker CPA Review:

http://www.beckercpa.com/ Uniform CPA Examination: http://www.cpa-exam.org/ Exam Matrix:

http://www.exammatrix.com

California Department of Real Estate (DRE) - Real Estate Brokers/Sales License

http://www.dre.ca.gov/ Real Estate Trainers: http://www.retrainersca.com Kaplan/Anthony

Schools: http://www.kaplanprofessionalschools.com/california/

California Department of Insurance - Life/Property Insurance Brokers/Sales License

http://www.insurance.ca.gov/ Insurance School of California: www.52hours.com Kaplan Financial:

http://www.kaplanfinancial.com

CFA Institute - Chartered Financial Analyst (CFA)

http://www.cfainstitute.org Schwester: http://www.schweser.com/cfa/index.php Stalla:

http://www.stalla.com/index.cfm St. Mary's MS Financial Analysis & Investment Management:

20

http://www.stmarys-ca.edu University of San Francisco Executive MS in Financial Statement Analysis:

http://www.usfca.edu/artsci/grad/financial_analysis/index.html

Financial Industry Regulatory Authority (FINRA)

Registered Representative (Series #7), Registered Investment Advisor (Series #66), General Securities

Principle (Series #24). Other Licenses: Commodity Futures (Series #3), and Registered Options Principle

(Series #4), Research Analyst (Series #86), Corporate Securities Limited Representative (Series

#62)/Equity Trader Limited Representative (Series #55)/Registered Options Representative (Series #42),

Financial and Operations Principle (Series #27)

http://www.finra.org/Industry/Compliance/Registration/QualificationsExams/Qualifications/p011096

http://www.finra.org PassPerfect: http://www.passperfect.com Securities Institute:

http://www.securitiesce.com Compliance/Examination: http://www.prometric.com Pamela Smith

Seminars/Exam Prep: http://www.psssinc.com

United States Government Websites:

http://www.dof.ca.gov/html/demograp/DRUHPAR.HTM

U.S. Department of Labor

http://www.dol.gov/

U.S. Bureau of Labor Statistics

http://stats.bls.gov/

U.S. Bureau of Economic Analysis

http://www.bea.doc.gov/

United States Chamber of Commerce

http://www.uschamber.org/default.htm

Environmental Protection Agency

http://www.epa.gov/

Securities Exchange Commission

http://www.sec.gov/

EDGAR (SEC) Filings (REITs/REOC)

http://www.sec.gov/edgarhp.htm

Economic Websites:

American Economic Association

http://www.vanderbilt.edu/AEA/index.htm

Economy.com

http://www.economy.com

21

Bureau of Economic Analysis (BEA)

http://www.bea.doc.gov/

Bureau of Labor Statistics (BLS)

http://stats.bls.gov

Census Economic Briefing Rooms

http://www.census.gov/cgi-bin/briefroom/BriefRm

Confrence Board

http://www.tcb-indicators.org/

Council of Economic Advisors

http://www.whitehouse.gov/administration/epo/cea

Department of Commerce

http://www.commerce.com

Economic Cycle Research Institute (ECRI)

http://www.businesscyle.com

Economic Information Systems

http://www.econ-line.com/

Economic Research.com

http://www.economicsearch.com/

FedStats.com

http://www.fedstats.gov/

Federal Reserve Board of Governors

http://www.federalreserve.gov

Florida Research and Economic Database (FRED)

http://fred.labormarketinfo.com

Economic Research Federal Reserve St. Louis

http://research.stlouisfed.org/fred/

National Association of Business Economists

http://www.nabe.com/

National Association of Realtors

http://nar.realtor.com

Social Science Research Network

http://www.ssrn.com/

Stat USA Internet

http://www.stat-usa.gov/

22

UCLA Forecasting Project

http://www.anderson.ucla.edu/research/forecast/

Financial Institutions:

American Bankers Association

http://www.aba.com/default.htm

Federal Deposit Insurance Corporation (FDIC)

http://www.fdic.gov/

Federal Home Loan Bank

http://www.fhlbanks.com/

Federal Housing Finance Board

http://www.fhfb.gov/

Fannie Mae

http://www.fanniemae.com/

Freddie Mac

http://www.freddiemac.com/

Ginnie Mae

http://www.ginniemae.gov/

Federal Reserve Bank System, Board of Governors

http://www.bog.frb.fed.us/

Federal Reserve Bank of Atlanta

http://www.frbatlanta.org/

Federal Reserve Bank of Boston

http://www.frbchi.org/

Federal Reserve Bank of Cleveland

http://www.clev.frb.org/

Federal Reserve Bank of Dallas

http://www.dallasfed.org/

Federal Reserve Bank of Kansas City

http://www.kc.frb.org/

Federal Reserve Bank of Minneapolis

http://woodrow.mpls.frb.fed.us/

Federal Reserve Bank of New York

23

http://www.ny.frb.org/

Federal Reserve Bank of Philidelphia

http://www.phil.frb.org/

Federal Reserve Bank of Richmond

http://www.rich.frb.org/

Federal Reserve Bank of San Francisco

http://www.sf.frb.org/

Federal Reserve Bank of St. Louis

http://www.stls.frb.org/

U.S. Treasury Department, Comptroller of the Currency

http://www.ustreas.gov/

http://www.occ.treas.gov/

Institutional Real Estate Investment Research

and Management:

AEW Real Estate Investment Management

http://www.aew.com

Callan Associates (Mercer)

http://www.callan.com

Center for Investment Research

http://www.investmentresearch.org/

Counselors of Real Estate (CRE)

http://www.cre.org/

Heitman Real Estate Investment Advisors

http://www.heitman.com

Institute of Real Estate Management

http://www.irem.org/

Institutional Real Estate Inc. (IREI)

http://www.irei.com/

Jones Lang Lasalle (JLL)

http://www.joneslanglasalle.com

National Association Real Estate Investment Management (NAREIM)

http://www.nareim.org/

24

National Council of Real Estate Investment Feduciaries (NAREIF)

http://www.ncreif.org/

Prudential Investment Management: Real Estate Investors (PREI)

http://www.investmentmanagement.prudential.com/view/page/pimcenter/700

Pension Real Estate Association (PREA)

http://www.prea.org/

RREEF Alternative Investments

http://www.rreef.com/cps/rde/xchg/ai_en/hs.xsl/index.html

UBS Global Real Estate

http://www.ubs.com/1/e/globalam/gre.html

Mortgage Backed Securities:

ARCS Commercial Brokerage

http://www.arcscommercial.com/

Bond Market Association

http://www.bondmarkets.com/research/RQ717.shtml

Commercial Mortgage Securities Association (CMSA)

http://www.cmsaglobal.org/

Commercial Mortgage Alert

http://www.cmsalert.com/index.php/

Federal Home Loan Bank

http://www.fhlbanks.com/

Federal National Mortgage Association (Fannie Mae)

http://www.fanniemae.com/

Freddie Mac

http://www.freddiemac.com/

Global Association of Risk Managers

http://www.garp.org/default.aspx

Government National Mortgage Association (GNMA)

http://www.ginniemae.gov/

Markit - CMBX Index

http://www.markit.com

Mortgage Bankers Association (MBA)

http://www.mortgagebankers.org

25

National Mortgage News

http://www.nationalmortgagenews.com/

International:

Acadametrics

http://www.acadametrics.co.uk

Amnesty International

http://www.amnesty.org

Association of Foreign Investors in Real Estate (AFIRE)

http://www.afire.org

Bank of International Settlements (BIS)

http://www.bis.com

Bank of England

http://www.bankofengland.co.uk/

Barclays Global

http://www.barclays.co.uk/

British Broadcast Corporation (BBC)

http://www.bbc.com

Bloomberg News

http://www.bloomberg.com

Der Spiegel

http://www.spiegel.de/international/

Economist Intelligence Unit (EIU)

http://www.eiu.com

Ernst & Young

http://www.ey.com/global/content.nsf/International/Home

Europe Real Estate

http://www.europe-re.com/

European Central Bank (ECB)

http://www.ecb.int/home/html/index.en.html

Financial Times (FT)

http://www.ftnewspaper.com

26

Fortis Investment Management

http://www.fortisinvestments.com

FTSE Group (FTSE)

http://www.ftse.com

IPE Real Estate

http://www.ipe.com/realestate/

International Herold Tribune

http://www.iht.com

International Monetary Fund (IMF)

http://www.imf.org

International Real Estate Digest (IRED)

http://www.ired.com

International Real Estate Federation (IREF)

http://www.fiabci.com

International Real Estate Society (IRES)

http://www.iresnet.net

Investment Property Databank (IPD)

http://www.ipd.com

International Securities Exchange (ISE)

http://www.ise.com

Jones Lang LaSalle

http://www.joneslanglasalle.com

Le Figaro

http://www.lefigaro.fr/international/

Le Monde Diplomatique

http://mondediplo.com

Organization for Economic Cooperation and Development (OECD)

http://www.oecd.org

OXFAM International

http://www.oxfam.org

Property Finance Europe

http://www.pfeurope.eu/

Realty Guide International

http://www.xmission.com/~realtor1/

27

Reuters News Service

http://www.reuters.com/

REFIRE Intelligence Report

http://www.refire-online.com/

Royal Institution of Chartered Surveyors (RICS)

http://www.rics.org

UBS Global Real Estate

http://www.ubs.com/1/e/globalam/gre.html

United Nations

http://www.un.org/esa/index.html

World Bank

http://www.worldbank.org/

World Economic Forum

http://www.weforum.org/en/index.htm

Updated: Tuesday January 26th, 2016