AI2147 Commercial Real Estate Investments 7.5 credits

• Educational level

  Second cycle

• Academic level (A-D)

  C

• Subject area

  Built Environment
  

• Grade scale

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

• Course page on KTH Social

Learning outcomes

The overall aim of this course is to provide students with good working and theoretical knowledge of the art and science of commercial real estate investment decisions. Students should after this course be able evalute investments of existing income-producing commercial properties, as well as how to analyze real estate development projects and investments in land.

By the end of this course, students should be able to answer and analyze questions like:

• What investments should the investor make (the investor’s investment decision)?
• How do investors determine the price they are willing to pay for a commercial property (estimating the investment value)?
• How should the investors finance the real estate investment (The financing decision)?
• How should a good investment evaluation report be structured?

Students should also be able to develop real estate investment evaluation models in Excel.

Course main content

Real estate investment evaluation process; Market analysis; Real estate as an asset class;  Measuring Real estate returns; Cash flow proformas and discount rates; Financial leverage in real estate; Alternative sources of financial and non-financial resources; After-tax investment analysis; Real estate investment capital structure; Real options and land value; Real estate development investment analysis; Excel modelling of real estate investments.

Eligibility

For single course students:
180 credits in Engineering or Economics/Business Administration/Finance including at least 30 credits in Business Administration, or equivalent.

Documented proficiency in English B or equivalent (TOEFL, IELTS e g).

For students in the master programme Real Estate Development and Financial Services:
AI2135 Financial Investments.

Literature

Commercial Real Estate - Analysis and Investments: Latest International Edition
By Geltner, Miller, Clayton and Eichholtz

Articles published in academic journals (Free download from KTH library) and other articles that can be downloaded for free.

Examination

• TEN2 - Written Exam, 4.5 credits, grade scale: A, B, C, D, E, FX, F
• ÖVN2 - Assignment, 3.0 credits, grade scale: P, F

Offered by

ABE/Building and Real Estate Economics

Contact

Han-Suck Song, e-post: han-suck.song@abe.kth.se, tel: 08-790 9569; Abukar Warsame, e-post: abukar.warsame@abe.kth.se, tel: 08-790 6912

Examiner

Han-Suck Song <hansuck@kth.se>

Version

Course plan valid from: Spring 11.
Examination information valid from: Autumn 12.