Online registration for this program has closed.
2009 Executive Education Programs, Summer
> Real Estate Development
Understanding the Markets of Real Estate: Supply, Demand, and Performance
07/20/2009 9:00 am - 07/21/2009 5:00 pm
Tuition $2000.00
AIA/CES units: 16 AIA/CES HSW units: No AIA/CES SD units: No
ASLA HSW units: No
This program provides an in-depth introduction to the myriad market factors affecting real estate, including the economy, interest rates, leasing demand, debt cost and availability, and equity hurdle rates. Financial analysis is also introduced including present value math, asset valuation, and performance measurement.
Participants will come to understand what drives regional and local economic growth, both long term and cyclically; why real estate has historically been boom-or-bust; how to measure and evaluate real estate performance; and what factors drive land use planning and land use density. In addition participants will be introduced to basic financial concepts and tools used to evaluate real estate investments in both the public and private debt and equity markets, including the securitized debt market. They will develop an understanding of real estate risks, returns, and the role of real estate as diversification within a financial portfolio.
This program is intended for design, real estate, and building industry professionals in the private or public sectors, who wish to have a broad, working understanding of the finance and economics of real estate. It introduces a framework for understanding the structure and function of these markets and how they affect building professionals and the fields of expertise in which they work.
The program will focus on the economics of residential and commercial markets, including demographic long-term structural trends as well as the subprime crisis. It covers economic topics such as location theory, macroanalysis of housing and nonresidential property (vacancy, absorption, leasing, long-term trends, and cyclicality), and regional growth (export demand and development, migration and birth rates, demand and supply determinants, costs of living and doing business).
The financial sessions will cover the basic financial concepts and tools used to evaluate real estate as an investment and will explore today's financial and economic crisis. Topics include investment performance (measuring and monitoring portfolios, basic present value math, basic real estate valuation, cash flow pro forma, and the role of debt in the capital structure); real estate portfolio theory; and tactical real estate theory (forecasting market return and risk).
Participants will:
(1) gain understanding of the economics of residential and commercial real estate, the demand and supply determinants, and contemporary trends and cycles.
(2) comprehend the financial performance and cyclical nature of real estate and whether this boom-or-bust tendency is just the "nature of the beast."
(3) learn financial methods for valuing and investing in real estate.
(4) understand real estate portfolio theory and tactical real estate theory.
(5) develop knowledge of the debt market for real estate.
Academic Leader(s)
Torto, Raymond G.
Raymond G. Torto, Ph.D., CRE, has a career that spans the academic, public, and private sectors. As a professor of economics, he built the economics department at the University of Massachusetts, Boston, and led the McCormack Institute for Public Affairs. As a public official, he was a policy advisor and led the modernization of the property tax-assessing function in the City of Boston. He has led CBRE/Torto Wheaton Research (TWR), a Boston-based premier real estate advisory and research firm, which provides research and advisory services to the largest real estate investment managers, federal regulators, rating agencies, and the largest banks and pension funds in the country and around the world. TWR has helped shape the quality and flow of information now available to commercial real estate investors. Today, Dr. Torto is CBRE Global Chief Economist. Dr. Torto is author of four books and numerous articles on financial markets and tax policy, serves on many boards, is a member of most real estate associations, and an acclaimed public speaker. He holds a Ph.D. in economics from Boston College.
Guest Speaker(s)
Acton, Michael J.
Michael J. Acton, CFA, is a managing director at AEW Capital Management, L.P. and director of AEW Research, with responsibility for directing the activities of AEW Research, the firm's highly regarded in-house research group. Mike joined the firm in 1990 and has over 20 years of experience as an economic analyst and forecaster. He chairs AEW's Investment Policy Group and is a member of AEW's Management Committee and Investment Committee. The resources of AEW Research are an integral part of AEW's investment process and Mike works closely with senior professionals in all areas of the firm to develop investment strategies that match clients' risk/reward objectives with market opportunities. Prior to joining AEW, he was with DRI/McGraw-Hill where he managed the Metropolitan Area Forecasting Service. He is a graduate of Bates College (B.A.) and holds the Chartered Financial Analyst designation.
Mundt, Randall C.
Randy Mundt is the president and chief investment officer of Principal Real Estate Investors, Des Moines, IA, the dedicated commercial real estate unit of Principal Global Investors. He is responsible for the development and execution of client investment strategies across all real estate quadrants, including investment pricing, performance and policy. Randy also leads Principal's real estate research team and chairs Principal's Real Estate Investment Committee and Client Strategy committees. Randy joined Principal in 1983, after receiving an M.B.A. in finance from the University of Iowa and a Bachelor's degree in business from Iowa State University. He is a member of the Association of Foreign Investors in Real Estate (AFIRE) the National Council of Real Estate Investment Fiduciaries (NCREIF), the National Association of Real Estate Investment Managers (NAREIM), the Real Estate Roundtable and the Pension Real Estate Association (PREA).
Nechayev, Gleb
Gleb Nechayev, vice president and senior economist, CB Richard Ellis, Boston, MA, manages multi-housing, retail, and hotels analytics and is also actively involved in consulting projects with the firm's strategy services. Prior to joining CB Richard Ellis, Mr. Nechayev was a research associate with Lend Lease Real Estate Investments. Gleb holds a Master of City Planning degree from the Massachusetts Institute of Technology and is a member of the Urban Land Institute and American Real Estate and Urban Economics Association.
Southard, Jon
Jon Southard, vice president, Torto Wheaton Research (TWR), Boston, MA, is TWR's chief economist, directing the research group since 1993. His current projects involve developing models of real estate risk for asset allocation and mortgage models. TWR has leveraged these analyses to produce Moody's Commercial Mortgage Metrics, a joint venture between Torto Wheaton Research and Moody's Investors Service. This service combines TWR's robust historical and forecasted database with sophisticated debt modeling and real estate fundamentals to effectively improve the performance of portfolios. Mr. Southard is the author of numerous articles for academic journals, and has been quoted widely in the press, including the New York Times, Boston Globe, and the San Jose Mercury-News. His work has included forecasting of each of the five major property types from both an equity and debt standpoint. He holds an M.S. in economics from Brown University.
Wheaton, William C.
William Wheaton is a professor in the Department of Economics at the Massachusetts Institute of Technology (MIT) and is the current director of the MIT Center for Real Estate. A member of the MIT faculty since 1972, Professor Wheaton helped to develop the field of urban economics by pioneering the theory of how land, location, and housing markets jointly operate. He also specializes in the problems of urban infrastructure and local government finance. He has written numerous articles in scholarly journals throughout the world, and is a co-author of Urban Economics and Real Estate Markets (Prentice Hall, 1995), the first textbook to cover both real estate applications and economics. Professor Wheaton's current research interests are represented in Recent Papers. In the last few years, Professor Wheaton has been actively applying economic research to the real estate industry. He helped organize the MIT Center for Real Estate, and teaches the program's core course in Real Estate Economics. He was the first economist to apply econometric methods to the forecasting of real estate markets, and is a principal in TWR, a globally-recognized real estate consulting firm that works with the real estate industry to better understand the fluctuations and trends of the market. Professor Wheaton received a B.A. in economics from Princeton University, and a Ph.D. from the University of Pennsylvania.
Online registration for this program has closed.
