Global Real Estate Markets

The Global Real Estate Markets course will provide enrollees with a global comparative view of real estate investment fundamentals. We will cover the main drivers of real estate values across countries and their forecast. Attendees will learn to underwrite real estate prices by studying the key determinants of construction costs and the value of land and location. From the macroeconomic perspective, attendees to this class will obtain an understanding of how changes in financial markets, international capital inflows, the local cost of capital, and changes in trade deficit or surplus affect current and future real estate markets. Special attention will be devoted to provide the skills needed to distinguish between short-term speculative fluctuations in real estate and actual or expected changes in asset valuation that are driven by fundamentals. We will analyze the micro-economic determinants of real estate value and rental yields and current global trends in real estate demand and valuation. We will also examine the key institutional differences between markets that matter for valuation, investment, and policy purposes. Some countries have more developed and transparent investable markets, but there are opportunities in less conventional approaches. We will review some of the strategies taken by successful global operators in order to minimize currency, credit, and operational risks. We will finally turn our attention to skills required to successfully build a global real estate portfolio. We will analyze the international returns and covariances of asset and asset-backed financial derivatives, and develop portfolio-optimizing strategies. We will also cover the universe of global Real Estate Investment Trust and Mortgage Backed Security markets.