INTERNATIONAL REAL ESTATE REGIONS
PLA 6342 SECTION: LONDON
Spring Session A
Jan 22 – Feb 26
Prof. Rosemary Scanlon
Dr. Patrice Derrington
(917)225 2625 (cell)
- Course Description
This course is an application of the analytical concepts learnt in either of the pre-requisite courses, Comparative Global Real Estate or Global Real Estate Investing, to a specific target country. It is designed for the student to consolidate their understanding and utilization of an analytical framework for evaluating cross-border real estate investment. As a result of this application, it is anticipated that the student emerges from the program with a comprehensive understanding of the dynamics of real estate developments and investments internationally in addition to an incisive process for assessing the unique contexts and conditions for real estate activities within selected countries.
This course proceeds with a deep investigation of the various advantages and challenges of targeting London for making a cross-border real estate investment with the USA as the origin of the equity interest. Leading up to experience of visiting the target location for the investment, the student will be able to supplement the classroom analysis with “on-the-ground” details regarding the conditions of local real estate markets, and therefore more accurately assess the potential for a cross-border financial transaction.
During the course, students will investigate, specifically with the real estate of London in mind, the many facets of opportunities and challenges that arise for an investor from the USA: the macro-economy and demographics, financial markets, currency exchange risk, taxation concerns, legal issues, planning and development trends, regulations and statutory requirements, ease of doing business, and cross-cultural negotiations.
By the end of the ½ semester, and following the study trip, students will have:
- Developed the critical, comparative, and analytical tools for undertaking a variety of international real estate development projects, transactions and investments; and
- Demonstrated their understanding of the dynamics of international real estate investing through an applied project comprising the analysis of the unique context and conditions of a specific real estate project or cross-border transaction.
- Course Requirements and Assignments
Students will be expected to attend all classes, complete assigned readings (posted on Canvas) prior to class and participate in class discussions, as these will factor into the final grade.
As key deliverables, each student, either individually or in a team of 2-4 people, will develop a detailed proposal – a Cross-border Real Estate Investment in London – that will compete with the proposals of other students to be the most compelling opportunity offered to equity investors in the USA. A written detailed proposal in the form of a mini “Deal Book” will be submitted, in addition to making a 10 minute “pitch” to a panel of US equity investors.
The development project may involve new construction or renovation, or investment in any level of the capital stack of a property, as of the student’s choosing, but must receive the instructor’s approval.
During the half-semester session, in teams (of 2-4 each) students will be required to:
- Make a comprehensive and detailed proposal for the investment of real estate in London. This proposal will be prepared in two steps:
Country Overview: Provide an overview of real estate development activity and markets in London, highlighting differences with the practice in the USA. This should include:
- The macro-economic, political and demographic overview.
- The types of properties being developed: new large sites, urban infill, mixed use, public realm.
- Issues regarding design, planning and zoning restrictions, though also any other areas of interest.
- The methods of financing development projects and the general state of the capital markets within Israel for real estate development and investment. Describe sources of capital and approx. terms.
- Conclude with your impression of what financing, design skills, development capabilities, etc. are suitable for the cross-border transfer of equity.
- Country Overview: Provide an overview of real estate development activity and markets in London, highlighting differences with the practice in the USA. This should include:
SUBMISSION: MINI DEAL BOOK:
- Provide a summary of the comprehensive investigation of the context for making a cross-border real estate investment from the USA, in accordance with the analytical framework discussed in class, presenting clearly the opportunities, risks and mitigation of those risks.
- From this argument, provide your idea for the type of development that you intend to investigate on your trip.
Make reference to the following: the relevant real estate market analysis, the property type selection rationale, a pertinent description of the design and planning challenges and opportunities, a BOE feasibility analysis, and general capital stack structure
Submission should include:
- Written Presentation that comprehensively makes the case for the investment, i.e. includes a summary which “sells” the proposal, and consolidated supporting material including a BOE feasibility analysis.
- Oral presentation in class for 10 minutes, that makes the “pitch” for investing in the project
Study Trip Task List
- To effectively pursue and obtain detailed information necessary for supporting your Deal Book proposal.
- To comprehensively cover the specifics of an investment proposal when on a country visit.
In your teams prepare a Study Trip List incorporating:
Required Detailed Information:
Description of items or issues which require additional on-the-ground information or details.
Given the nature of that required data, propose potential sources – meetings, surveys, visit to specific entities or projects, etc. for obtaining the data and schedule pursuing those sources.
Columbia University’s online Canvas system will be used for posting the course syllabus, selected class materials/handouts, hyperlinks to locations from where case studies and additional reading materials to be used in the course could be found and/or purchased by students. Canvas will also be utilized for the posting of Assignment requirements, Quizzes, etc and as such will be the location for the student’s submissions in response. Canvas will also be utilized as a tool for the instructor to post announcements, and also for the instructor and students to connect outside of the classroom more consistently and conveniently.
III. COURSE GRADING CRITERIA
Course grading criteria are as follows:
- Engagement on Trip: 20%
- Attendance and in-class participation: 10%
- Country Overview Assignment: 30%
- Final Submission: Deal Book: 20%
- Proposal Presentation: 10%
- Study Trip Task List: 10%
Only exceptional performers will receive a High Pass.
Students will be expected to complete readings in advance of class and these will be posted one week in advance on Canvas. There is no required textbook for the course.
Recommended Reference Textbooks, which are available in the Avery library, bookstores, or may be ordered on-line:
Cross Border Real Estate Practice by Terry A. Selzer, 2013, American Bar Association.
Global Property Investment: Strategies, Structures, Decisions (with website) by Andrew Baum & David Hartzell, Wiley-Blackwell 2012.
The Global Property Investor’s Toolkit by Colin Barrow, Wiley, 2008
International Real Estate: A Comparative Approach by Mark Lee Levine, Dearborn Real Estate Education – e-book, available at Amazon.com
SESSION TOPICS: subject to change
Jan 22: CLASS 1
Course Introduction, Why Go Global? Assignment and Study Trip Overview
Jan 29: CLASS 2
Macro-economic comparison of London and New York
Feb 5: CLASS 3
Review of Capital Markets, Currency Risk and Taxes
SUBMISSION: Country Overview
Feb 12: CLASS 4
London Infrastructure and Real Estate
Feb 19: CLASS 5
Feb 26: CLASS 6
PRESENTATIONS and FINAL SUBMISSIONS of Assignment and Study Task List.
MARCH 16 – 20: STUDY TRIP Start at 9am sharp on Monday March 16. Finish at lunchtime on Friday March 20.
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