Course Syllabus

Course objectives
Required text and materials
Prerequisites
Grading
Contacting me
Plagiarism and academic honesty
ADA statement
Course schedule and lecture notes

Course Objectives

Real Estate Investment Analysis covers the tools and techniques used to evaluate a variety of financial decisions involving commercial real estate.  In this class we will learn how to estimate the cash flows associated with a prospective real investment and estimate its value using both ratio analysis and discounted cash flow techniques.  We will consider how mortgage finance and taxation affect this decision.  We will also discuss a variety of corporate real estate decisions, including lease vs. own analysis, comparing lease alternatives, and disposition/renovation decisions. 

Brueggeman, William B. and Jeffrey D. Fisher.  Real Estate Finance & Investments, 14^th edition.  McGraw-Hill/Irwin, 2011 (ISBN #978-0-07-337733-9).

NOTE:  The 13th edition of this text will be fine; my page number references may be off, however. 

In addition to the texts, I suggest you become an avid reader of the Wichita Business Journal, the Wichita Eagle, the “Property Report” section each Wednesday in the Wall Street Journal, and any other real estate market periodicals you choose.  These will help familiarize you with market conditions in the Wichita area and around the county.  On occasion, we will discuss in class articles that have particular relevance to the topics we are discussing in class. 

To make most effective use of our time together, it is essential that you read all assigned materials prior to our class meeting.  I will often assign homework assignments to be due before we have finished discussing a topic.  This is to help you work ahead and explore the topic on your own so that class time can be used to clarify and expand on the ideas and techniques presented in the text.  Remember, you cannot expect to learn very much or perform well in the class if you do not come to class prepared and spend substantial out of class time studying on your own. 

You will also need a good financial calculator for this course.  I recommend the TI BA II Plus, the HP 10B II, or the TI-83.  I am familiar with each of these calculators and can help you use them solve problems in class.  Furthermore, each of these calculators is able to do anything you’ll need for any of your other business courses.  But any good financial calculator that can calculate NPVs and IRRs with irregular cash flows will be fine.  Learn how to use your calculator!!!  During the exams, I cannot show you how to use it or adjust its settings. 

Finally, some homework assignments may be easier if you create Microsoft Excel spreadsheets so solve them.  If you do not have your own computer with Excel, you can use one of the computer labs on campus.  If you are not familiar with Excel, you may want to buy a book or find some other reference source. 

Finance 340 or equivalent. Key is familiarity with time value of money theory and calculations.  In addition, you should have a functional knowledge of Microsoft Excel (from ACCT 260). 

Grades for this course will be calculated using the following weights:

Two midterm exams	30% each
Comprehensive final exam	40%
Homework assignments (up to 3% extra credit)	1/4% each

Pre-exam on background concepts

On Tuesday, August 30 there will be a "pre-exam" on background concepts including basic algebra and time value of money calculations.  You must earn a B or better on this exam or you will automatically fail the course.  If your score on the pre-exam is not high enough, you may retake the exam at the Testing Center as often as you like until Thursday, September 22.  Please do not put off retaking the pre-exam; if you wait until the 22^nd  and still do not pass it, you will fail the course.  To help you review these background concepts, I have provided a review sheet, practice problems, and a sample exam.  

Midterm and final exams

The format for the exams will be multi-part problems with some multiple-choice/true-false questions.  Your best guides to the kind of questions I will ask on the exams are the sample problems I've posted on the website as well as the homework assignments.  A good study tactic is to simply solve these problems again and again. 

You will be allowed one 8½×11 page of notes to use during exams and quizzes.  This may contain any information you would like.  Remember, however, that the exams will long and challenging; if you are not thoroughly familiar with how to solve a problem before you take the exam, don’t expect to have time to learn it from your note page while you are taking the exam.  Students with more than one page of notes accessible during the exam will receive an automatic zero on the exam, and may be subject to further disciplinary action for violations of academic honesty.

Homework assignments

Each homework assignment can earn you 1/4 percent extra credit up to a maximum of 3 percent.  All homework assignments should be submitted by the beginning of class on the day they are due.  If you will not be in class or are concerned you may be late, you may e-mail your assignments to me (please put RE618 in the subject line).  I encourage you to work on homework assignments in groups; however, each student must turn in his or her own written answers. Late homework assignments will not be accepted. 

The purpose of the homework assignments is to help you practice the material and keep current in the class.  Homework assignments are graded based on effort, not correct answers (notice that partial solutions have been posted to help you check your work).  Thus, every student should be able to earn the full extra credit available. 

In addition to the assigned homework, you should expect to spend 5-10 hours each week outside of class studying and working practice problems.  If you do, your performance on the exams should earn you the grade you desire.  If you don't keep current with the assignments and do extra problems on your own, it is unlikely you will do well on the exams. 

To earn an A, you will need to demonstrate a thorough mastery of the material.  Although I do not have a predetermined grade distribution, based on past experience I expect that only 10 to15 percent of the class will earn an A.  B students will demonstrate a solid understanding of the subject.  This is a senior-level finance class, and you should not expect to float through the class and earn a B.  In the end, I expect 25 to 40 percent of the class will earn Bs.  Thus, you should expect that half or more of the class will earn a C grade or lower.  I will be thrilled if this class beats the averages, but that will depend on your level of dedication to the course.    

I encourage you to contact me at any time if you have questions or concerns about any aspect of this course.  I am also happy to answer questions about homework assignments as well, although you should first attempt to resolve any questions through discussions with your classmates. 

The best way to reach me is via e-mail (stan.longhofer@wichita.edu).  In addition, I will often conduct class correspondence using your official WSU e-mail addresses.  Thus, each of you should configure your WSU account so that you can access your e-mail several times a week, preferably daily.  You can do this on MyWSU where I also encourage you to update your official phone listing so that I can reach by phone if necessary.

I will usually respond to my e-mail immediately when I am in the office, and within a day in any event (unless I am out of town).  Finally, you may always send me anonymous comments using the course feedback form on the class web site.

You are responsible for any material I distribute to the class via e-mail or on the class web site.

Plagiarism and Academic Honesty

It should not come as a surprise to you that I expect each of you to do your own work.  I will prosecute violations of academic honesty vigorously.  Anyone caught cheating or turning in work that is not his or her own will be subject to punishment ranging from a zero on the exam/assignment to failing the course to expulsion from the University.  Expect a severe punishment if I catch you cheating in this class. 

If you believe you have been wrongly accused of academic dishonesty, there is an established appeal process. You can get information from the Dean's Office, room 100 Clinton Hall.

NOTE WELL:  You may NOT use cell phones or personal digital assistants during quizzes and exams.  I understand that these devices often have good financial calculator emulators.  Nevertheless their potential for misuse is great.  Any student caught using a cell phone, personal digital assistant or similar device during an exam or quiz will automatically receive a zero on that exam/quiz and may be subject to additional disciplinary actions. 

University ADA Statement

If you have a physical, psychiatric/emotional, or learning disability that may impact on your ability to carry out assigned course work, I encourage you to contact the Office of Disability Services (DS). The office is located in the Grace Wilkie Annex, 978-3309 (voice/tty). DS will review your concerns and determine, with you, what academic accommodations are necessary and appropriate for you. All information and documentation of your disability is confidential and will not be released by DS without your written permission.

Schedule and Lecture Notes

See the schedule section of the web site.