URL study guide
https://studiegids.vu.nl/en/courses/2024-2025/E_FIN_REFICourse Objective
The course provides an introduction to the understanding and the analysis of real estate markets from the perspective of both debt and equity investors. Leasing and investing in real estate will be considered. Most of the attention will be devoted to commercial real estate (offices, industrial buildings, retail, rental housing) but we will also consider the owner-occupying household as a small-scale investor in residential real estate. Due attention will be paid to mortgage financing and to the secondary market for mortgages, where institutional investors invest in pools of mortgages. The course covers direct as well as indirect investments in real estate and the role of institutional investors (pension funds, insurance companies). Investment vehicles, such as REITS will be analyzed. Although the course takes an international perspective, special attention is given to the Dutch situation in class and through an assignment. After following this course, students:Are able to understand and analyse real estate appraisals (Academic skills)Are able to analyse the behaviour of institutional and other investors in real estate markets (Academic skills)Understand the functioning of residential and commercial real estate markets and mortgage markets (Bridging theory and practice)Know how to apply the principles of real estate valuation (Professional/Social skills)Understand the role real estate markets play in society (Broadening your horizon).Course Content
Students study the characteristics of lease contracts and the principles of real estate valuation. Due attention will be paid to the role of mortgage financing and tax measures. Relevant aspects of the markets for commercial and residential real estate, including the role of policy interventions (for instance, mortgage interest deductibility) will be discussed. The secondary market for debt is analyzed with a focus on the various instruments (such as CDOs and CMOs) that played an important role in the last financial crisis. Finally, students also look at the other side of the financing of real estate, namely, they take the perspective of an (institutional) investor, such as a pension fund, who considers real estate as one of many available asset classes. Students will study the main characteristics in terms of risk and returns of the different forms of real estate available to the investor (such as investing in mortgage pools, investing in buildings, securitized real estate, etc.), as well as by property type (such as residential versus commercial real estate).Teaching Methods
Lectures, including a guest lecture by a real estate specialist. Tutorials introduced by market practitioners.Method of Assessment
Written exam. The exam consists of open questions.An assignment (group assessment) concerning the valuation of real estate. Several smaller assignments associated with tutorials. The smaller assignments intend to help the students prepare for the exam.Literature
Hartzell, D and Baum, A.E., (October 2020), Real Estate Investment and Finance: Strategies, Structures, Decisions, 2nd Edition, ISBN: 978-1-119-52615-5, 592 pages;• additional course material, mainly academic papers, access will be provided via Canvas.
Language of Tuition
- English
Study type
- Master