Course description
Real Estate Capital Markets and Finance
In recent decades, commercial real estate as an asset class had accessed the public markets for capital through the securitization, utterly transforming this asset class. These developments have had profound effects on the real estate markets, including how they have led to greater flexibility and transparency in those markets, and how they have affected the valuations and pricing efficiency of markets for real estate assets.
Real estate financial markets are rapidly changing, with new instruments and ideas introduced every day. Therefore, the course will prepare participants to undertake any new financial instrument that might be introduced to the market, and be able to understand and utilize the innovations that have been introduced and are still being developed. The methods in which households and investors finance the acquisition of real estate has changed dramatically. The types of loans available to borrowers have gone from a limited choice, to a much wider variety of mortgage structures offering many choices. Along with this increase in choice came an increase in both complexity and specialization in mortgage markets, changing the degree to which real estate markets, the financial markets and the economy as a whole are related.
The course will provide an overview to participants in financial structures and market factors that influence the success or failure of a business. At the conclusion of the course, students will have enhanced insight and skills to better understand the possible options available, including having the opportunity to register for additional in-depth course on a variety of related topics.
Who should attend?
Prerequisites
Basic knowledge of finance and investment
Who Should Attend
This seminar is for professionals from the financial services, banking, investment and commercial real estate sectors who will benefit from this course will come from a wide variety of backgrounds, including…
- HNW investors
- Investor and venture capitalists
- C-level executives
- Investment and commercial bankers
- Financial and portfolio managers
Training content
DAY 1
Session 1: Introduction (Review) and Overview of Real Estate Finance
- Real estate investment legal concepts
- Real estate finance notes and mortgages
- Workouts, foreclosure, bankruptcy
Session 2: The Time Value of Money
- Compound interest
- Present value; future value
- Annuities
Session 3: Fixed Interest Rate Mortgage Loans
- Mortgage rate determinants
- Calculating payments and loan balances
Session 4: Adjustable and Floating Rate Mortgages
- Incremental borrowing cost
- Loan refinancing
- Loan market value
Session 5: Commercial Real Estate Leases, Rents and Market for Space
- Different lease types
- Supply and demand
- Underwriting tenants
- Property valuation
Session 6: Investment Analysis and Taxation of Income Properties
- Investment strategies
- Leverage and financing alternatives
DAY 2
Session 1: Risk Analysis and Corporate Real Estate
- Types of risk
- Due diligence
- Lease versus own – corporate real estate
Session 2: Financing Project and Land Developments
- Planning and permitting process
- Lender requirements
- Lender agreements and disbursements
Session 3: Structuring Investments: Organizational Forms and Joint Ventures
- Equity distributions
- Securities laws
- Secondary mortgage market
- Investing in distressed properties
Session 4: Real Estate Capital Markets Overview
- The intersection of space and capital markets create value
- The four quadrants of real estate capital markets
- Main investment strategies in commercial real estate
Session 5: Overview of Commercial Mortgage (Debt) Markets and the Role and Process of Securitization
- The role and process of securitization
- CMBS and RMBS structure
Session 6: Mortgage Pass-Through Securities and Prepayment Issues
- Prepayment and default risk
- Credit enhancement and ratings
- Rating agencies
Session 7: CMOs and CDOs
- How they got started
- Characteristics of each
- Prepayment and extended maturity risk
Session 8: More Securitization Constructs
- Sequential pay/waterfalls
- OAS (Option Adjusted Spread) model and duration measures
- IP/PO strips; floaters and inverse floaters
DAY 3
Session 1: Securitization and Bank Loan Syndication
- Managing portfolio risk and opening business opportunities
- What happens during a bank loan syndication
- How does a bank manage its portfolio through sales and trading?
Session 2: The Commercial Mortgage Capital Markets and Its Lenders, Mortgage Types and Terms
- Lender and borrower challenges with commercial mortgages
- Lending decision making process
- Ramifications of defaulting on a loan and negotiation tactics
Session 3: Private Equity Investment
- Sources of equity financing and investment vehicles
- Structures and investment strategies
- Function of joint ventures
- Fee structures
Session 4: Alternate Private Equity Structures
- SPACS
- Hedge funds
- Crowd funding
Session 5: The Pros and Cons of Public Investment in Real Estate
- Introduction to REITs
- Types of REIT structures
- Pros and cons of using a REIT structure
Session 6: International Real Estate Markets and Investment
- Why international investment
- Barrier and roadblock issues
- Risk considerations
Session 7: Real estate portfolio considerations
- Institutional portfolio management trends and strategies
- Investment performance evaluation and benchmarking techniques
- Attribution analysis
- Types and uses of real estate derivatives
DAY 4
Session 1: Group Case Study and Presentations
- The course will conclude with participants applying knowledge and tools gained during the course incorporating their own business experience. The participants will be segmented into groups to work on solutions to specific case studies.
Session 2: Conclusion and Summary
Costs
Course fee: £4495+VAT
Certification / Credits
Learning Objectives
Upon completion of this seminar, participants will be able to…
- understand the history and composition of both debt and equity components of real estate capital markets.
- understand the structure of residential and commercial mortgage-backed securities (RMBS/CMBS).
- be familiar with current events on domestic and international real estate capital markets.
- obtain a broad understanding of real estate institutions and related legal concepts.
- learn various, basic ways of underwriting real estate.
- understand the basic concepts of the secondary markets and REITs.
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Euromoney Learning
At Euromoney Learning, we understand that learning doesn’t start and end when you leave the classroom. We know that the financial markets never stand still, and that technology has both simplified and added complexity at a break-neck pace. That’s why...