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AI2118 Portfolio Management and Real Estate Finance 7.5 credits

Portfolio Management and Real Estate Finance

This course offers the fundamentals of real estate financing and real estate portfolio management, which is crucial for real estate professionals charged with making debt and equity investment decisions.

  • Educational level

    Second cycle

  • Academic level (A-D)

    D

  • Subject area

  • Grade scale

    A, B, C, D, E, FX, F

Course offerings

Spring 13 for programme students

Learning outcomes

Upon completion of the course, students will be able to

  • Identify the characteristics of property investments and discuss how they compare to those of other main investment classes
  • Build a portfolio optimization model  and analyze the effect on the efficient frontier of including real estate in the portfolio
  • Analyze opportunities and pitfalls of including real estate in a mixed asset portfolio
  • Identify and explain different types of real estate price indices and discuss the pros and cons of different indices
  • Critically discuss if and how common asset pricing models can be applied to real estate
  • Analyze international real estate investments
  • Describe and analyze financing alternatives for real estate investors and developers
  • Explain and analyze mortgages and other real estate debt investments from debt investors´ perspectives.
  • Describe and analyze basic concepts in bond investments, such as duration, interest rate risk, and the yield curve.

Course main content

Fundamentals of real estate financing, real estate portfolio analysis, construction of real estate return series and performance measurement.  Characteristics of real estate risk and return.  International real estate investments. Asset pricing and real estate. Financing alternatives for real estate investments. Credit and bond markets.

Eligibility

Investment Analysis (AI1108), Financial Investments (AI2135) and Corporate Finance (AI2144) or equivalent courses.

For single course students:
180 credits (hp) in engineering or economics/business administration/finance including at least 7,5 credits (hp) in financial economics and documented proficiency in English corresponding to English B (TOEFL, IELTS e g).

Literature

Geltner, Miller, Clayton & Eichholts: Commercial Real Estate Analysis & Investments.

Examination

  • INL2 - Exercises, 1.5 credits, grade scale: P, F
  • TENA - Examination, 6.0 credits, grade scale: A, B, C, D, E, FX, F

Offered by

ABE/Building and Real Estate Economics

Contact

Åke Gunnelin, phone: 08-790 8628, e-mail: ake.gunnelin@abe.kth.se, Han-Suck Song, e-mail: han-suck.song@abe.kth.se

Examiner

P Åke Gunnelin <akeg@kth.se>

Version

Course plan valid from: Spring 11.
Examination information valid from: Spring 09.