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Dancing Bird

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Submitted By bouche911
Words 1738
Pages 7
11.431/15.426J Real Estate Finance & Investments I: Fundamentals & Micro-Level Analysis Fall 2006

Introductory Lecture Slides
(Selections from Chs.1, 2, 7 of text.)

1

Overview: 1. 2. 3. 4. 5. 6. Magnitude of Real Estate Investment Performance of R.E. Investment The “Real Estate System” (role of capital mkts) The space market The asset market & investment industry Example real world R.E. development investment

2

Magnitude
Figure 1a: Net Asset Value of U.S. Structures ($ billions, 2003, source BEA) Total = $ 23,747

Govt. R.E., $5,751

Houses, $11,917

Commercial R.E., $6,079

3

Magnitude

Figure 1b: Net Asset Value of U.S. Commercial Real Estate Structures ($ billions, 2003, source BEA) Total = $ 6,079 Billion

Institutional, $955 Hotel & Recreational, $554

Office, $1,131

Retail, $1,313 Residential (apts), $1,168 Industrial*, $958

4

Magnitude

U.S. Institutional Commercial Real Estate
Physical Stock: 44B SF
U.S. Commercial R.E. Physical Space (SF)

Capital Value: $3.3 Trillion
U.S.Commercial R.E. Capital Value ($)

Retail 25% Apartment 41%
Retail 34%

Apartment 25%

Warehouse 9%

Office 18% Warehouse 16%
Office 32%

Source: PPR, 2003

5

Asset Mkt

Exhibit 1-5: Major Types of Capital Asset Markets and Investment Products Public Markets: Equity Assets:
Stocks REITs Mutual funds

Private Markets:
Real Property Private firms Oil & Gas Partnerships Bank loans Whole Mortgages Venture Debt

Debt Assets:

Bonds MBS Money instruments

6

Magnitude

1.2.4 The Magnitude of Real Estate in the overall Capital Market…
Exhibit 1-7 US Capital Market Sectors, a $70 Trillion Pie…
U.S. Capital Market Sectors, a $70 Trillion Pie

Private Debt (49% RE), 16%

Public Debt (22% RE), 30%

Private Equity (78% RE), 30% Public Equity (17% RE*), 24%

*Corporate real estate owned by publicly traded

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