Alternative Investment Strategies in Commercial Real Estate

Real Estate Development

Fall 2012

Donald Sheets, instructor

This course introduced alternative investment strategies in commercial real estate from a primarily principal-based approach. A combination of both case studies and guest lectures from active market participants took students through the various different instruments that can be employed to gain real estate exposure. These included sessions on mezzanine, bridge and hard-money lending, the CMBS markets with an emphasis on B-piece investing, and further public market investment opportunities including the analysis of real estate investment trusts. Students were also introduced to the diverse range of players in the principal investing universe from private equity and hedge fund managers through investment banks and insurance companies. Consideration was given to the regulatory framework, how this has changed through the recent economic crisis and how it can provide opportunities for real estate investment. For their final project the class split in to two groups with each group finding an alternative real estate investment opportunity, such as a bridge loan. Each group then drafted a full investment committee memo covering the necessary valuation, market research, legal and other considerations and then defended their investment proposal to questions from both the professor and the other students.