REAE 5321: Real Estate Investment

REAE 5321.531: SEMINAR IN REAL ESTATE INVESTMENT
(Cross-listed with FINA 5392.533)

FALL 2000

SYLLABUS
THURSDAY, 7:00-9:50 PM
ROOM 255 BUSINESS BUILDING

Instructor        J. Andrew Hansz, Ph.D.

Office              619 Business Building

Office Hours   MWF 11:00 – 11:45 AM, M 10:00 – 10:45 PM and by appointment

Phone              (817) 272-5843

E-mail             hansz@exchange.uta.edu

Course Description

Introduction to analytical techniques, sources of financing, and other factors related to real estate investment.  Stresses current developments and topics.

Prerequisites

• Prerequisite: FINA 5311 or REAE 5311 or equivalent.  See graduate bulletin.

Course Format

• Discussion/Seminar – Specific text readings and cases will be assigned for each class period.  Class will be conducted in a seminar format and it is expected that each assignment will be read prior to class and you will be ready to discuss the material in class.

• Lectures and Assignments – Some lecturing will be necessary.

• Examinations – One midterm exam and a comprehensive final exam.

• Cases – Several real estate investment case studies will be assigned, discussed in class, and graded.

• Attendance and participation is required.  Due to the seminar format of this course, class discussion and contribution is critical.  Attendance will be taken.

Required Textbooks

• Real Estate Finance and Investments, 10^th Edition, William Brueggeman and Jeffrey Fisher, Irwin, 1997.

• Getting to Yes, Roger Fisher and William Ury, Penguin Books.

• Harvard Business School case studies and articles (will be available at Fast Copy campus copy center)

Calculators and Spreadsheet

A financial calculator (HP 10-B or equivalent) and a spreadsheet (Excel or equivalent) are required.  The calculator must be able to calculate Internal Rate of Return (IRR) and Net Present Value   (NPV).  This means that the calculator must accommodate uneven cash flows.  Check the manual before you buy a calculator.  You are responsible for learning the keystrokes.  I also assumed that you have basis spreadsheet skills.

Grading

*For the “Final Project,” you have two options:

Option 1: Perform an investment analysis of an actual property in the DFW area.  Students selecting to perform a ‘real life’ investment analysis must select a property, identify sources of local data, and notify the instructor on or before October 12, 2000.

Option 2:  Perform an investment analysis on a case study.

Generally, the grading scale used by the Instructor can be:

The instructor can apply a “curve” which could lower these ranges.  The distribution of final grades will normally adhere to the guidelines of the Department of Finance and Real Estate.  These guidelines are generally based on College of Business Administration averages for similar courses.

Make-up Examination Policy

The instructor reserves the rights to change the style, format, and content of a make-up examination. A make-up exam will be given if the student has a reasonable, verifiable excuse.  However, students should not expect to take more than one make-up exam.  The make-up exam must be completed before the end of the week in which the original exam was scheduled.  Once a student has taken an exam, a make-up exam cannot be given.

Policy on Attendance 

Students are expected to attend each class withall assignments completed.Students who must miss a class are responsible for obtaining all assignments, lecture notes, handouts, and announcements discussed in class from a classmate.  You should get to know at least one student in class to collect missed notes and handouts.

Policy on Handing in Assignments Late

Several homework assignments will be made during the quarter. A penalty per class period will be assessed for all assignments turned in late.  Absence from class is not a valid excuse for handing in homework assignments late.

Policy on Disruptive Classroom Behavior

This course will be conducted in a professional manner.  Unprofessional behavior of any form in the classroom will not be tolerated.  Students can be withdrawn at the discretion of the instructor for unacceptable behavior.  Additionally, a portion of the final grade is attributed to class attitude/contribution.  This grade, made at the instructor discretion, is based on attendance and attitude during class.

Academic Honesty

It is the philosophy of The University of Texas at Arlington that academic dishonesty is a completely unacceptable mode of conduct and will not be tolerated in any form.  All persons involved in academic dishonesty will be disciplined in accordance with University regulations and procedures.  Discipline may include suspension form the University.  You are responsible to maintain the standards of Academic Honesty included in the current UTA catalog.

Bomb Threats

Effective April 8, 1996, the College of business Administration has adopted a policy to deal with the classroom disruption caused by bomb threats in the building.  (A) Section 22.07 of the Texas Criminal Law Statutes states that a Class A misdemeanor is punishable by (1) a fine not to exceed $4,000, (2) a jail term of not more than one year, OR (3) both such a fine and confinement. (B) If anyone is tempted to call in a bomb threat, be aware that UTA has the technology to trace phone calls. (C) Every effort will be made to avoid cancellation of presentation/tests caused by bomb threats to the Business Building.  Unannounced alternate sites will be available for these classes.  If a student who has a class with a scheduled test or presentation arrives and the building has been closed due to a bomb threat, the student should immediately check for the alternate site notice which will be posted on/near the main doors on the south side of the Business Building.  If the bomb threat is received while class is in session, your instructor will ask you to leave the building and reconvene at another location.  (D) Students who provide information leading to the successful prosecution of anyone making a bomb threat will receive one semester’s free parking in the Maverick Garage across from the Business Building.  UTA’s Crime stoppers will provide a reward to anyone providing information leading to an arrest.  To make an anonymous report, call 817-272-5245.

Withdrawing

It is the student’s responsibility to complete the course or withdraw form the course in accordance with University regulations.  Students are strongly encouraged to verify their grade status before dropping a course after the first withdrawal date.  A student who drops a course after the first withdrawal date may receive an “F” in the course if the student is failing at the time the course is dropped.

Drop for Non-payment

It is the policy of the University of Texas at Arlington that students who have not paid by the census date and are dropped for non-payment cannot, under any circumstances, receive a grade for the course.  Therefore, a student dropped for non-payment whom continues to attend the course will not receive a grade for that course.  Emergency loans are available to help students pay tuition and fees. Students can apply for emergency loans by going to the Emergency Tuition Loan Distribution Center at E.H. Hereford University Center (near the southwest entrance.).

Student Evaluation of Teaching

The following appears in Administrative Memorandum No. 98-5 dated August 21, 1997, from the President for academic and administrative offices. “ Beginning in Fall 1997, teaching evaluations will be conducted in every class every semester for every instructor of record”. 

Important Dates

Tentative Course Schedule  

This is a tentative schedule.  Adjustments will be necessary during the progression of the semester.  You are responsible for any changes announced during class.

Week	Topics	Chapters*
1	Introduction; Investment Review Packet; Investment Problem (DCF)
2	Introduction to Commercial Property Markets (Dr. Buttimer)	8
3	Valuation of Income Properties (Hansz)	9
4	Investment and Risk Analysis	10
5	Comparison of 2 Investments Case Write-up Due Financial Leverage and Debt Structure	11
6	Disposition and Renovation of Income Properties	13
7	Midterm Exam (October 12, 2000)
8	Anderson Street Case
9	Angus Cartwright, Jr. Case Write-up Due Guest Presenters from the Local Real Estate Industry
10	Real Estate Investment Trusts	20
11	Real Estate Investment Performance and Portfolio Considerations/Case	21
12	Negotiations (Getting to Yes)
13	Thanksgiving Holiday No Class
14	Fan Pier Case
15	Final Projects and Presentations Due

*You will be responsible for assigned problems at the end of each chapter.

Final Exam: Thursday, December 14th at 8:15 to 10:45 PM