15.427  Real Estate Capital Markets (H1)

We can certainly discuss other topics (including review the exam answers, talk about theses, etc), but the lecture I've prepared for today (and posted) is about commercial property price indexing. I can also go into a little more depth about how the PureProperty indices work. Class is optional. Have a great spring break!

What would you all like to do in our very LAST CLASS EVER! (In terms of required MSRED finance classes anyway... Hopefully will see some of you after spring break in the Tools class.) I'm open to suggestions. Some possibilities (not necessarily mutually exclusive) include: More gory details about real estate price indices (Ch.25 stuff), Brainstorming about thesis topics, Review of Blums et al 2010 Sloan term paper (which I will post), Go over the exam questions from last Thursday's exam,...

Please post suggestions or preferences in the Stellar Forum under the "General & Other" topic.

We will be holding recitation in the lecture hall tomorrow evening at 6:30 to cover review material in advance of the exam.  The same material will be covered on Tuesday evening, at the usual recitation time.

We will be studying a HBS case for the last topic in our course. The topic is real estate price index derivatives, and while it will not be covered on the exam (and we won't get to it until the last week in the course, which is the Sloan SIP week), I encourage you to participate in this topic as it is quite interesting, both from an intellectual perspective and, I think, because ultimately it stands a good chance of developing into an aspect of the real world of the real estate investment industry. We are probably several years away from it, but when/if it develops, it could bring quite a revolution into real estate investment. So if you want to participate in this topic of the course, you will need to go to:

http://hbr.org/store

And purchase the case called "Grosvenor Group Ltd." (by Andre Perold & Arthur Segel).

We will discuss this case on Tues March 20, along with a visit that day from NAREIT research director Bradford Case. Brad and I will also present a new way to form commercial property price indices from REIT stock prices, an index product that will soon be launched commercially by FTSE (together with NAREIT), which we believe may provide a useful vehicle for synthetically trading commercial property along the lines suggestedin the Grosvenor Case (though the instance described in that case employs a different type of index).