Restructuring of Distressed RE

3 Credits · Level: Graduate

This is an advanced real estate finance class designed to help students gain expertise on credit cycles, capital structure, real estate debt and restructuring during periods of distress. This course makes distinctions between distressed markets, distressed assets and costs of financial distress and their implications for different stakeholders within the capital structure of real estate holdings and the corporations that hold real estate. In the Credit Cycles and Capital Structure section of this class, we will start with a macro view of systemic crisis in real estate markets and discuss the implications, and government responses and policies to these periods in history. We will also examine the capital structure diving into both theory and practice with an emphasis driven on control provisions and their priority of payment. We will discuss the main theories of why real estate owners’ structure real estate investments and holdings the way they do and examine valuation methodologies for different creditor positions within a real estate investment suffering from signs of distress. We will also examine the implications of distress in recent real-world cases.