Learn everything about Real Estate Investments in the CFA Level II Alternative Investments topic. In this comprehensive video, Professor James Forjan covers real estate valuation, portfolio roles, commercial property types, REITs, NAVPS, FFO, and AFFO. Understand the income, cost, and sales comparison approaches, plus how to evaluate private and public real estate investments.
This lesson simplifies complex LOS concepts and prepares you for item set questions on the CFA Level II exam.
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Topic 8 – Alternative Investments Module 1,2,3– Real Estate Investments 0:00 Introduction and Learning Outcome Statements 3:20 LOS: Compare the characteristics, classifications, principal risks, and basic forms of public and private real estate investments. 10:49 LOS: Explain portfolio roles and economic value determinants of real estate investments. 18:52 LOS: Discuss commercial property types, including their distinctive investment characteristics. 21:43 LOS: Explain the due diligence process for both private and public equity real estate investments. 25:48 LOS: Discuss real estate investment indexes, including their construction and potential biases. 33:47 LOS: Discuss the income, cost, and sales comparison approaches to valuing real estate properties. 34:59 LOS: Compare the direct capitalization and discounted cash flow valuation methods. 36:32 LOS: Estimate and interpret the inputs (for example, net operating income, capitalization rate, and discount rate) to the direct capitalization and discounted cash flow valuation methods. 39:34 LOS: Calculate the value of a property using the direct capitalization and discounted cash flow valuation methods. 45:52 LOS: Calculate and interpret financial ratios used to analyze and evaluate private real estate investments. 48:51 LOS: Discuss types of REITs. 49:58 LOS: Justify the use of net asset value per share (NAVPS) in REIT valuation and estimate NAVPS based on forecasted cash net operating income. 51:21 LOS: Describe the use of funds from operations (FFO) and adjusted funds from operations (AFFO) in REIT valuation. 54:06 LOS: Calculate and interpret the value of a REIT share using the net asset value, relative value (price-to-FFO and price-to-AFFO), and discounted cash flow approaches. 59:59 LOS: Explain advantages and disadvantages of investing in real estate through publicly traded securities compared to private vehicles.
