It is essential to understand the bigger picture within which an appraisal is being done, namely the firm-specific portfolio within which the real estate being valued will be placed. Specific topics:

• Introducing the Investment Problem that a Firm Faces
• Introducing Portfolio Management
• Potential Problems associated with Valuations from a Portfolio Management Viewpoint
• Why do Portfolio Managers care about Reliable Valuations?

Just like portfolio managers need reliable valuations, asset managers are also involved in the process of creating reliable valuations. This lecture explains how the asset manager, who will have to manage the property being acquired, is involved in the valuation process. Specific topics:

• Introducing Asset Management
• Asset Management Characteristics of Different Types of Real Estate: Office, Residential, Retail, Industrial, and Hotel
• Potential Problems associated with Valuations from an Asset Management Viewpoint
• Why do Asset Managers care about Reliable Valuations?
• Reliability Issues surrounding Valuing Stabilized Real Estate versus Value-Add Real Estate

Besides portfolio managers and asset managers, there are others in the firm who get involved with the outcome of the valuation process, namely property managers, facility managers, and project managers. Although they are much less affected by the outcome of the valuations, it is important to review their roles and why reliable valuations are important for them. Specific topics:

• Introducing Property, Facility, and Project Management
• The Activities of these Managers within the Firm
• How and Why do these Managers use Valuations
• How are Real Estate Valuations affected by the Activities of these Managers?

To better understand the big picture investment objectives of a real estate firm, this lecture will discuss the concept of diversification in more detail, leading to actually recommendations for portfolios. The choice of these investments in the portfolio is determined by correlation coefficients, which reflect the interaction between investments. This shows the big drawback of real estate valuations, putting their reliability in doubt: Real estate valuations look at these investments in isolation, ignoring the interaction with other investments. Specific topics:

• Two Types of Diversification
• Correlation Coefficients
• How a Portfolio that includes Real Estate looks like
• Global Real Estate Investments
• Correlation Revisited
• Why Risk has been Increasing
• The Probability Distribution of Direct Real Estate Returns
• Fat Tails Distribution in Real Estate

Estimating the value of real estate is complicated because there are many problems with the data and information that is available. This lecture looks at these problems from the firms' viewpoint, to be more exact the Portfolio Manager, and as such provides an insight into what appraisers typically ignore or don't realize. Clearly this makes valuations less reliable for the user of these valuations, namely the firm. Specific topics:

• The Impact of Real Estate Cycles
  
• Past Performance
  
• Autocorrelation
  
• The 40 Data Points Requirement: The Impact of the Life Cycle
  
• Real Estate is Lumpy
  
• Benchmarking and Roll’s Criticism
  
• Institutional Investor Allocation
  
• Going Abroad
  
• Behavioral Real Estate Decisions
  
• Non-Normal Distribution of Returns
  

Real Estate Investment Trusts (REITs) are in effect mutual funds owning real estate and they are one of the biggest users of valuations, since every quarter they need to determine the value of their portfolio. This lecture will look in more detail at the typical portfolio issues a REIT faces, so we can better understand the need and use of (reliable) valuations. Specific topics:

• REIT Diversification versus Investor Diversification
  
• REIT Portfolios
  
• Example: New Plan/Excel
  
• Example: Simon Property Group
  
• Does Diversification Still Matter?
  
• International Diversification
  
• Highest NPV (= Highest and Best Use) is not always the Best Outcome
  
• The Winners Curse
  

Real Estate firms are investing in global real estate on an ever increasing scale. This means that firms are buying more and more real estate in a “foreign” country and in order to make smart decisions they seek transparency about the real estate market. One of the tools is the Valuation Report. This lecture explains the reasons behind global real estate investment trend and the need for good information about global real estate investments. Indeed, different laws, regulations, and customs in different countries need to be understood. Specific topics:

• The Need for Real Estate Market Transparency
  
• Global Real Estate Capital Flows
  
• Where are Global Real Estate Investors putting their Capital?
  
• In what Type of Real Estate are Global Real Estate Investors Putting their Capital?
  
• What are the Drivers for Global Investment?
  
• Risks Associated with Global Real Estate Investment.
  
• A Strategy for Investing in Global Real Estate
  
• Global Acquisitions
  

This lecture builds upon the previous one and tries to identify the particular problems and drawbacks with investing in global real estate. Specific topics:

• Home Asset Bias
• Political and Economic Risk
• Transaction Costs in Different Countries
• FIRPTA
• Bribery and Corruption
• Socio-Cultural Risk
• Foreign Control and Treatment of Foreigners
• Exchange Rate Risk
• Lessons to be Learned

This course has provided a lot of criticism with respect to creating reliable valuations, especially when it comes to valuing international real estate properties. This lecture tries to show an insight on how this problem perhaps can be solved in the future. Specific topics:

• The International Asset Pricing Model
• Data: IPD
• Index: MSCI Index

Not all decisions can be considered rational decisions and this lecture takes a look at that. It has an impact on Valuations and its reliability, because if the buyer and seller do not behave rational, while the Appraiser assumes rational behavior, the valuation is not a very reliable guideline for irrational investors. Specific topics:

• The Importance of “Animal Spirits” on Decision Making
• Herd Behavior
• Prospect Theory
• Familiarity Breeds Investment Theory
• Overconfidence
• The Pigou Cycle
• Cycles Again
• Hayek versus Keynes: https://www.youtube.com/watch?v=d0nERTFo-Sk&feature=player_embedded