(2 days)
This is a sample course outline. Courses can be modified to fit your needs and schedule.
This course provides a broad overview of the external forces shaping global real estate trends. It also gives participants the tools to analyze the risks and rewards of different capital structures, to negotiate and close deals that create more value for all parties, and to build strategic skills for effective decision making and implementation.
Real estate professionals across the world are being challenged to build and sustain a competitive advantage. Changes in the industry and many new dynamics are forcing senior executives to transform the ways they lead, craft strategy, and build teams, as well as execute and deliver value. Capital markets are providing attractive alternatives to traditional private funding. New challenges but also new opportunities abound in the current global real estate markets.
Transparency requirements, regulatory requirements, and more competitive global forces require new approaches for general managers in this traditionally private industry. Today’s and tomorrow’s professionals need more cross-functional expertise and global perspectives. This course explores real challenges in the industry, identifies emerging trends and opportunities, and provides insights on ways to enhance portfolio management.
- Tools to analyze the risks and rewards of different capital structures, as well as to negotiate and close deals that create more value for all parties
- Strategic skills for effective decision making and implementation
- An understanding of emerging trends and opportunities
- Insights on ways to enhance portfolio managementt
Day 1
Real Estate Expansion Strategy
Case Study: HiJinx Inc.
An indoor children’s amusement parks chain needs to decide on expansion strategy in the face of a failed IPO. The company considers leasing incentives and risks of deviation from corporate strategy. This case focuses on leasing strategies, expansion strategy, entertainment, destination malls, landlord incentives, and tenant improvement allowances.
Many Different Asset Classes: Differences and Similarities
Case Study: The Arts Property and Hotel
We will discuss the differences and similarities between real estate asset classes. Hotels, malls, apartment complexes, industrial buildings, and office developments all fall under the heading of “real estate.” But does a hotel have more similarities with an industrial park or an airline company? We will discuss the similarities and differences, plus the various financing mechanisms seen in each of these assets.
Real Estate Investment Trusts (REITs)
Case Study: Simon’s Hostile Tender for Taubman
This case will analyze a hostile takeover attempt between two mall REITs in the United States. We will explore corporate governance issues raised by this situation. We will also take a broader look at the REIT structure, its origins, design objectives, and flaws.
Lease Negotiation
Case Study: Corporate Avenue
In this interactive negotiation, participants will use exhibits extracted from the case to attempt to finalize the terms of a lease in Shanghai.
Day 2
Land Valuation
Case Study: Fan Pier 2005
Fan Pier, a large parcel of land on Boston’s waterfront, has been in litigation for over a decade. The Canadian owners, the Pritzker family, are under pressure to sell. How should prospective buyers value the undeveloped land? This case explores land valuation techniques, considering reclaimed lands from the ocean and large real estate multi-use development projects.
Negotiating a Transaction: What Is Acceptable Behavior?
Case Study: ABRY Partners and F+W Publications
While this is not a real estate transaction, the lessons learned here are highly applicable in the real estate arena. This case, which focuses on an investment transaction that has gone sour, deals with allegations of fraud, reputational implications of litigation, and the implications of behavior of those dealing in a transaction.
Questions we address: Does a seller’s motivation to maximize the value of a company it is selling justify its actions? When are legal and ethical lines crossed? What is acceptable behavior? What remedies are available to the buyer? Does the buyer have anyone to blame but himself?
Real Estate Derivatives – Understanding a New Financial Instrument
Case Study: Grosvenor Group Limited
In early 2006, Nick Scarles, Director of Corporate Finance at Grosvenor, is contemplating a transaction involving real estate derivatives that could revolutionize the way Grosvenor invested internationally. Some questions on his mind were: How developed were real estate derivatives markets? What were the costs and benefits of using these contracts? What about Grosvenor’s longstanding commitment to local operations and knowledge? He has to decide how he will present his views on the subject to his CEO.
Real Estate, Credit Derivatives, and the Credit Crunch
Case Study: Corporate Avenue
In this concluding interactive lecture, we look at the industry and its role in the 2008 financial crisis. What lessons did we learn? Has the crisis changed the industry, and if so, how?