FINANCE

ASSESSING COMMERCIAL
REAL ESTATE INVESTMENTS
AND MARKETS

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 Overview
Real estate surrounds us, but as an asset class, it
is one of the least understood. Today, as investors
seek a hedge against inflation and the future of
sectors such as office space remains uncertain,
becoming knowledgeable and developing greater
confidence about the nuances of real estate
investing is essential. It continues to offer some
outstanding opportunities, even as significant In Assessing Commercial Real Estate Investments and Markets, you will:
changes reshape the industry.
•  Learn about various sectors of commercial real estate and the different
Assessing Commercial Real Estate Investments options for investing in them
and Markets is for investment professionals and •  Analyze how to navigate the short- and long-term trends and the evolution of
individual investors who want to make informed the commercial real estate industry
decisions in both the short and long term. This •  Understand how to balance risk and return in a sector impacted by macro-
program will help you better understand the economic forces such as inflation and recessions
forces that are at play, eliminate fear, and give you
•  Gain clarity and confidence around evaluating potential real estate
deep insights into analyzing the risks and rewards investment partners and opportunities
that are emerging as demand for commercial real
estate expands or contracts in various sectors. •  Explore the drivers of real estate markets and discover how to invest and
manage risk globally
•  Determine how best to fit real estate into an overall investment strategy

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ASSESSING COMMERCIAL
REAL ESTATE INVESTMENTS
AND MARKETS
 Highlights and
Key Outcomes
The commercial real estate landscape has
fundamentally changed. What was once prized—
such as the familiar “location, location, location”—
may be a liability tomorrow. Continued shifts in
how and where people prefer to work and interact,
along with economic forces including inflation
and recessions, are causing major fluctuations
in demand and pricing. They may also cause
investors to avoid the asset class entirely.
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Unlike other industries that can retool a manufacturing line or discontinue a
product or service, commercial real estate cannot pivot or revamp its business
model quickly. That means real estate investors must be highly attuned and aware
of these shifts, nimble and ready to change course in order to capture returns.
Assessing Commercial Real Estate Investments and Markets is led by faculty from
Wharton’s top-ranked real estate department and the world’s premier real estate
education and research center. Highly engaging sessions that include interactive
exercises, case studies, and small-group breakouts explore the fundamental
concepts and nuances of commercial real estate. Participants investigate many
real estate investment strategies, including direct investment, investing in public
equity, lending to real estate, investing in real estate debt, and investing in a
company or private equity firm that is itself investing in real estate.
ASSESSING COMMERCIAL
REAL ESTATE INVESTMENTS
AND MARKETS

Highlights and
Key Outcomes
This program is particularly relevant for
institutional investors and financial advisors to
high-net-worth clients. Participants will become
more assured, discerning evaluators of potential
investments in the U.S. and globally, and learn
how to diversify investments across countries,
find local partners, and assess and hedge
currency risks.
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You will leave with a deeper understanding of the concepts, terminology,
strategies, and opportunities that will enable you to confidently add both domestic
and global real estate to your investment portfolio.
Session topics include:
•  Real Estate Growth, Booms, and Risk: What Has Happened and What
Can We Expect?
•  Cash Flow, Cap Rates, and Property Investment
•  Liquidity and Capital Structures in Times of Stress
•  Navigating Passive Real Estate Investing: REITS, Private Equity, Bonds,
and Debt
•  Portfolio Allocation to Real Estate: Risks, Returns, Opportunities, and
Downsides
•  Property Investing: How to Make Money and Avoid Going Broke, and
Why Great Leadership Matters
•  Global Real Estate: Debt and Equity Markets
•  Real Estate as a Hedge Against Inflation: Separating the Signal from the
Noise
ASSESSING COMMERCIAL
REAL ESTATE INVESTMENTS
AND MARKETS
 Participant Profile
This program is designed for those who invest
large amounts of capital, such as institutional
investors and financial advisors, who do not have
a background specifically in real estate but who
need to acquire or enhance their understanding
of the sector or need a refresher on emerging real
estate trends. This program is not for commercial
Some of the job functions and roles include:
real estate brokers, real estate developers, or
other professionals whose primary focus is on the •  Asset managers and chief investment officers for large publicly traded or
privately held corporations and institutions such as pension funds, university
acquisition, construction, financing, or selling of
endowments, and foundations
commercial real estate.
•  Sovereign wealth fund professionals
Ideally, participants should already have a
•  Family office representatives and other private wealth advisors to ultra-high-
grasp of concepts such as net present value net-worth individuals and families
(NPV), internal rate of return (IRR), free cash
flow, discounted cash flow analysis, return on •  CPAs, attorneys, and other professionals who advise institutional investors
investment, and cost of capital. Familiarity with Additionally, this program provides an excellent learning opportunity for ultra-
Microsoft Excel is expected. high-net-worth investors who are frequently pitched commercial real estate
investment deals and wish to be better educated in the subject.
To further leverage the value and impact of this
program, we encourage companies to send cross-
functional teams of executives to Wharton. We offer
group enrollment benefits to companies sending four
or more participants.

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ASSESSING COMMERCIAL
REAL ESTATE INVESTMENTS
AND MARKETS
 Faculty ADDITIONAL FACULTY

Joseph Gyourko, PhD

Martin Bucksbaum Professor; Professor of
Todd Sinai, PhD Real Estate; Professor of Finance; Professor of
Business Economics and Public Policy; Nancy A.
Academic Director Nasher and David Haemisegger Director of the
David B. Ford Professor; Zell/Lurie Real Estate Center
Professor of Real Estate; Professor of
Asuka Nakahara, MBA
Business Economics and Public Policy;
Practice Professor of Real Estate; Associate
Chairperson, Real Estate Department, Director of the Zell/Lurie Real Estate Center,
The Wharton School The Wharton School

Professor Todd Sinai has been with Wharton Todd is the recipient of several teaching and Maisy Wong, PhD
James T. Riady Associate Professor of Real
since 1997 and is professor of real estate and of other awards, including the Postdoctoral Estate; Assistant Director, Grayken Program in
business economics and public policy. He is also Fellow award from the Homer Hoyt Institute, International Real Estate, Zell/Lurie Real Estate
Center, The Wharton School
chairperson of the Real Estate Department at the the Ballard Teaching Award, and the HUD/
Wharton School. He received his PhD from the AREUEA Best Paper Award.
Massachusetts Institute of Technology and his
BA from Yale University. Todd has also served as
a faculty research fellow at the National Bureau of
Economic Research and a visiting scholar of the
Federal Reserve Bank of Philadelphia.

His research interests include commercial

real estate, real estate investment trusts, risk
and pricing in housing markets, and taxation
of real estate.

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ASSESSING COMMERCIAL
REAL ESTATE INVESTMENTS
AND MARKETS

Session Highlights
FOUNDATIONS: CASH FLOW, CAP RATES, AND
PROPERTY INVESTMENT FUNDAMENTALS
In this session we will provide an overview of
various approaches to creating value through
a real estate investment. We examine what
factors are driving current cap rates to see what
real estate investment performance might be
sensitive to going forward, and assess whether
real estate investments would provide a hedge
against inflation.
COMMERCIAL REAL ESTATE
RISK AND RETURNS
This session will help you understand the
foundation of commercial real estate risk
and returns. It will do so by focusing on
longer-run investment horizons across cycles.
Different types of investment strategies
will be discussed, ranging from basic “core”
real estate to much riskier value-add and
opportunity-type repositioning. Participants
will have an understanding of the nature of
longer-run returns on commercial real estate
and an intuitive sense of how CRE fits into an
institutional portfolio.
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DID YOU INVEST?
Evaluating a real estate pro forma is a
critical part of investing in real estate
properties. We will discuss, first in small
groups, then together, how you assess a
proposal. Participants will work in groups
translating pro forma financial statements
into fundamental economic conditions,
discerning the key drivers of real estate
investment performance from a pro forma,
and discovering the tradeoffs of risk and
return in real estate investments.
PORTFOLIO ALLOCATION TO REAL ESTATE:
RISKS, RETURNS, OPPORTUNITIES, AND
DOWNSIDES
Real estate return measures do not
necessarily convey complete information.
In this session, we will view real estate
through the lens of modern portfolio theory
and discuss the return properties of various
categories of real estate, the role of appraisal
smoothing, and how to think about the
appropriate portfolio allocation to the sector.
We will also examine real estate’s role as
a possible inflation hedge, the different real
estate sectors, and their different roles
in a portfolio.
PROPERTY INVESTING: HOW TO MAKE
MONEY AND AVOID GOING BROKE, AND
WHY GREAT LEADERSHIP MATTERS
Using case studies, we will discuss how to
identify risks; think about profits, returns,
and typical mistakes smart people make
when buying and developing investment
real estate; and integrate leadership lessons
critical to success in real estate and other
life endeavors. Participants will learn tools to
assess property risks and run numbers. They
will also discuss and think about lessons
learned from real estate professionals and
leadership approaches that will increase the
odds of success.
GLOBAL REAL ESTATE I: OVERVIEW
GLOBAL REAL ESTATE II: DEBT AND EQUITY
MARKETS
These sessions will cover the key trends in
global real estate markets with particular
attention paid to what real estate investors
need to know about global capital markets,
how to hedge for currency risk, and how
to invest in an environment with low or
negative interest rates. We will also explore
distressed debt opportunities and what
investors need to know, as well as discuss
what equity investors should look for in local
partners.
ASSESSING COMMERCIAL
REAL ESTATE INVESTMENTS
AND MARKETS
Session Highlights
REAL ESTATE GROWTH, BOOMS, AND RISK:
WHAT HAS HAPPENED AND WHAT CAN WE
EXPECT?
This session will also be divided into two parts.
One will involve lecture and discussion on how
the different sectors of the housing market
and commercial real estate have performed
leading up to and during the pandemic crisis.
We will examine how real estate fundamentals
interact with changes in the broader economy,
using very recent data and research from the
industry and academicians. This will lead us to
a discussion of how the different sectors are
likely to perform in the next year and those
immediately following. The second half of this
day will involve a panel discussion with two
leading industry investors, one from the private
real estate market and the other from the public
(REIT) markets. This will allow us to revisit
some of the issues discussed earlier in the
day, as well as compare and contrast property
performance in the private and public markets.

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ASSESSING COMMERCIAL
REAL ESTATE INVESTMENTS
AND MARKETS