Private Equity

3 Credits · Level: Graduate

The Real Estate Private Equity course will introduce the broad universe of privately held, non-traded equity vehicles that invest in commercial real estate. Private equity real estate is a term used in investment finance to refer to a specific subset of the real estate investment asset class. Private equity real estate refers to one of the four quadrants of the real estate capital markets, which include private equity, private debt, public equity and public debt. Students will learn about the different types of private equity investment vehicles, their investment structure and capitalization, their required return and underwriting requirements, as well as the execution of investment business plans. The class will be taught through a heavy reliance on case studies where students will play the role of either an entrepreneur or an investment professional and evaluate the viability of investments through market analysis, development of acquisition pro forma and discounted cash flows, obtain and structure debt, structure equity investments from different investor perspectives and evaluate equity returns and waterfalls. Students should be comfortable and competent in computing and analyzing discounted cash flows, net present values, internal rates of return, acquisition and disposition sensitivity analyses, equity multiples, cash-on-cash returns, and waterfall structures. The class structure will include lectures, back-of-the-envelope case studies, in-depth case studies, class discussion (participation required), readings, and guest speakers. Students will analyze actual, past, and present investment and development opportunities.