Stellar Course Management System

Case 4 available

Great job on Case 3.
Alas, Case 4 is now available!
You can work in groups of up to 5 if you want this time. Be prepared to present using PPT as with Lincoln. Case is due December 1st. Larry Ellman, M.D. of Citigroup North America R.E. Investment Management will participate in the discussion.
Have fun!

Announced on 18 November 2005  4:49  p.m. by David Geltner

Lincoln Case Advice

Just to clarify, in the Lincoln Case your assignment is to play the role of Frank Mattson, preparing his presentation to the STRS Investment Committee. However, there is a lot of rich background and context provided in the case, which you should think about and be prepared to bring into your oral discussion on Nov.17. Think about the motivations of the various parties, and when, where, and how value was created (if any was).

The required "deliverables" for handing in are a memo (max 3 pages 1-spaced in Word) and a PPT presentation (max 5 slides, well crafted, good graphics, not too busy), both documents to represent Frank's presentation to the Investment Committee.

Try to see the forest through the trees, and to apply the principles we have been teaching. We will be approaching this subject matter through two parallel simultaneous tracks: (i) I will be presenting lectures (and you have reading of Chapter 29, in 1st edition or if you prefer the 2nd edition manuscript that has been posted); (ii) Meanwhile, you will also be pounding your heads against the Lincoln (and subsequently Inter-Mtn) case trying to figure out how to apply the academic principles to the real world (you guys may have better ideas about this than we do).

I have posted a development analysis example that I plan to discuss in class on November 10 if we can get to it, called "Madison Place". It's not exactly like Lincoln, but it can give you some guidance.

Have fun! -DG.

Announced on 07 November 2005  10:02  a.m. by David Geltner

Nov.10 Green Finance Recitation: More Info

At the Nov. 10 recitation, Will Bradshaw will be presenting his work related to green development and real estate finance. Please note that Will has provided you with two papers covering the topics of his presentation. [Linked to via Stellar.]

Will Bradshaw is a doctoral student in his second year in MIT's Department of Urban Studies & Planning. He was formerly the Organizational Director of the Davidson Housing Coalition in Davidson, North Carolina where he oversaw the
development and construction of 57 units of affordable housing, developed and ran a homebuyer education and housing counseling program, and supported the Town in the overhaul of their planning and zoning guidelines. He holds a Master of City Planning and a Master of Science in Real Estate Development from MIT.

Topic 1: What are the central research arguments made around green building? Why are these arguments incomplete and unconvincing
for the real estate development community, though often quite convincing for a community of policy advocates, public officials, and civic or philanthropic actors? A simple model can be used to highlight the type of information that real estate developers need in order to make good decisions about where and when to invest, and how green development research could change to address more pertinent questions about development.

Topic 2: The value and operating cost differentials (if any) of green single-family homes in the Austin, Texas real estate market and the implications of these findings on the costs and benefits of green home development in that market.

Announced on 02 November 2005  1:35  p.m. by David Geltner

Green Real Estate Finance (recitations)

In response to student interest in sustainable development, we will be devoting recitation to guest speakers on green real estate finance on Nov. 10 and Dec. 8. Our focus will be on the costs and benefits of green building from the point of view of the developer.

Nov. 10
Will Bradshaw, doctoral student at DUSP, MSRED & MCP. Presenting research on the value and operating cost differentials (if any) of green single-family homes in the Austin, Texas real estate market. Will also address the central arguments made around green building--for and against.

Dec. 8
Tim Pappas, Pappas Enterprises. Presenting research on the cost of green components in the Pappas development portfolio, particularly the Mcallen Building (to be Boston's first gold-rated LEED residential building).
Ed Connelly, New Ecology, Inc. Presenting on the cost and benefits of green affordable housing, based on analysis of 16 properties nation-wide.

Please check the class website for additional biographical and other background materials the week of each presentation.

These presentations will provide an opportunity for all students to explore the financial feasibility of green development.

Announced on 02 November 2005  1:33  p.m. by David Geltner

Midterm Exam Update

The midterm exam next Tuesday (Nov.01) will cover all of the material we have covered in class through Thursday October 27. This includes sections 12.1 & 14.4. (as well as sections 17.1 and 18.2).

This overrides my October 8 announcement. Sorry for the inconsistency, but I think it really makes sense to get all of this material out of the way on the midterm, so we can focus the rest of the course on the analysis of real estate development projects.

Thus, to summarize the material you are responsible for on the midterm: Ch.1; Sections 2.1 & 2.2 in Ch.2; All of Chapters 7,8,10, & 11; Section 12.1 of Ch.12; All of Chapters 13 & 14; Sections 17.1 in Ch.17; and Section 18.2 in Chapter 18. The two cases only as devices to help you link the material to the real world (no exam questions explicitly on the cases). (And no Argus questions on the exam.) In the lecture notes, all colors of slides are covered. Two topics that are covered in the notes but not explicitly in the text chapters include: "Certainty Equivalence DCF" (Ch.10 PPT slides 12-22 only); and "After-tax debt valuation" (Ch.14 PPT slides 48-63 only). I know it is a lot of material, but it is all such important fundamental stuff and so much fun!

Anyway, the exam won't be toooo bad, very similar in format and character to the practice exam that has been posted and that will be discussed by the TAs 10/27 (& 10/30). In studying, I suggest you focus first on problem sets, second on the lecture note PowerPoints, third on the book text and study questions.

Good luck, and remember: Have fun!!

Announced on 27 October 2005  10:40  a.m. by David Geltner