FIN 565 W11 Allen

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                  Real Estate Development Fin/UP 565:
                    Community Design & Development:
        How to Create Lively Downtowns and Livable Neighborhoods

    Finance 565, Finance Dept, Ross School of Business, Winter, 2011
                           Rev. Jan 10, 2011

Key Changes: Still in draft form but with correct dates for all events. Get more speakers: Gilmartin, Sean
mann, Allen Creek crowd, Lib Lot and Blake crowd
speakers: mark nickita, Kirk Westphal, Sean Mann, Richard Florida, confirmed Jeff Blau, Susan Pollay and
Sandi Smith

Valuable city tours: You must be available for the single Sunday afternoon bus tour, 1-4:30, on Jan
30, to take the course. Optional really unforgettable tour of Detroit, Sat., Feb 12, 8am to 2 pm.

Approximately 1/3 of class of about 50 students will be Ross School of Business, 1/3 will be Taubman
College architects, urban planners and masters of urban design, and the balance will be law, engineering,
public policy and natural resources. This is good for you!

Instructor:    Peter Allen, Adjunct Faculty, Ross School of Business & Taubman
               College of Architecture and Urban Planning
Offices:       Downtown: 944 N. Main St., just north of Depot St.
               Office: (cell) 734-358-0060; or at Stephen M Ross School of Business,
               Room 3425
Class Room:    Stephen M Ross first floor, room Exec Ed E 1540
Class Hours:   Wednesday nights, 6:30-9:30 PM
Office Hours: Before class at Ross, after class at Pizza House or call for an
C Tools:       Very valuable and used for every class. See site for best past term
              projects that will be used as cases.
Texts:         Eldred, Investing in Real Estate, Wiley, 6th NOT 5th edition. Amazon,
               about $16. This book is an excellent primer, especially for those who
               have never signed a lease or purchase agreement and/or never owned
               or managed a real estate investment.
Key Web Sites:;;; Brookings, NYTimes, WSJ,

Course workload consists of 13 sessions of 3 hours per session plus 2 bus tours.

Course Objectives and Requirements: I strongly emphasize connections with past
students and industry experts for summer internships and full time jobs. I teach Real
Estate Development using a variety of resources and techniques:

    Two excellent bus tours: first on Sunday Jan 30 touring of Ann Arbor and
     another on Sat morning, Feb 12, of Detroit, all excellent laboratories of mostly
     good and lots of terrible local development. The Detroit tour shows its potential to
     be at its tipping point and loaded with redevelopment opportunities. Bus tour
     assignments and class participation are 10% of your grade.

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   1-2 active professional speakers come to many classes to discuss best practices;
   You will evaluate 5 best past term projects from prior semesters to better
    understand development feasibility for mixed use development. Written work to be
    submitted includes 3 individual and 2 group, team-oriented analyses of selected best
    past term projects, including 3 from Ann Arbor, 1 from Detroit and 1 from Chicago.
    Worth another 50% of your grade.
   Optional Final Exam worth 10% to replace lowest term project evaluation. Buy a
    distress home/condo as a real deal and then rent it out. Peter will explain and

   You and your team will complete a very professional 30 page term project (40% of
    final grade) on a realistic and opportunistic site of in and around Ann Arbor. Doing
    an excellent job on this report, I am told by many former students, really assures
    you a job opportunity in this field. The most memorable part of the class will be this
    term long, feasibility project. You will work all semester with 2-3 fellow class
    members as a team to make a local property redevelopment of your choice as
    "feasible" as possible. There will be financial prizes for the best term projects.

The course, now in its 30th year, is taught by Peter Allen, Adjunct Lecturer, U of M
MBA ’73, who is also founder of Peter Allen & Associates in 1975, a commercial real
estate development, brokerage and consulting firm. ( Peter, on the
faculty of Ross School of Business and Taubman College of Architecture and Urban
Planning since 1981, teaches a companion real estate fundamentals course, Real Estate
Essentials BA/UP 517, in the fall term. RE 565 is more “development” in nature. Both
courses serve as entry level courses for the Real Estate Certificate Program.

Interdisciplinary students from other schools are encouraged, with many of the class
enrolled in urban planning, architecture, engineering, public policy, Rackham, and law
programs. Those requiring acceptance should apply by emailing the instructor
explaining their background/resume and need for the course. (

13 Week Class Outline

Week 1 Mon 1/10
       By 7 pm tonight, please post your updated resume, class expectations and
       photo to C Tools 02 Folder. Include a 1 page summary of why your are taking
       this class, your expectations.This will help you & others self select your
       team members for your term project. This will also help me tailor the
       course to your expectations. Post to the “02 Resumes…” C Tools folder:

          Wed 1/12
             1. Before class listen to this 30 minute speech by Bruce Katz of
                Brookings Institute about the promise and challenge of the top 100
                metropolitan areas, where the key real estate growth will occur
                the next 35 years:
             2. Also, please listen to the James Howard Kuntsler You Tube 20
                minute speech on the trends in real estate development, especially
                with regard to suburbia vs downtowns that offer a sense of place:

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              3. Review ULI, Emerging Trends, 2011 from, especially
                 noting your favorite cities.

              4. Listen to the Smart Growth You Tube:

              5. Assignment: Immediate hand-in assignment, with robust discussion to
                  follow. Answer the following questions in about 2 pages:
                   1) First, visit the key websites listed on page 1,
                   2) Describe the best urban experiences and the favorite cities of
                   your life so far. Explain the why and how of these experiences.
                   3) Describe what makes downtown Ann Arbor in terms of its urban
                   4) What are your career goals as to real estate, where and how to use
              this class.
                   Two pages max. The and websites are very
              helpful as is David Sucher’s City Comforts website on downtown design,
              here is an excerpt:

              6. Roll call, sign up sheet, additional registrations & overrides.
              7. Peter Allen’s welcome and opening comments. Why this will be a
                 valuable course:
                       Launch a career in real estate, become a “community”
                           developer, create 3rd place for your 1000 nights.
                       Lease or buy office space as head of your company.
                       Make real estate investments to diversify your portfolio.
                       You all want to settle down somewhere, sometime. Therefore,
                           make an impact on the quality of life of the community you live
                           in, by being on a Neighborhood Association, Planning
                           Commission or City Council.
                       Respond to the need for creating more livable neighborhoods,
                           downtowns, and creating “people places.”
                       Give your team class presentations: influence your classmates.
                       Have fun after class and at semester-end party.

              8. Pass around original best prior term projects to be used for 5 case
                           Huron Steps. Fuller Road Station TOD (new Amtrak
                              Commuter station) individual case assignment 1
                           Midtown Center. Former YMCA site and Blake transit
                              Center at So 5th & William-individual case assignment 2
                           Library Lot & Deck—group case assignment 3
                           New Center Rail Hub. Detroit Amtrak at Woodward site-
                              group case assignment 4
                           Redevelopment of Chicago Lakefront USSteel site
                              individual case assignment 5
              9. Students briefly introduce yourselves to facilitate team making.
                 Please mention school, ideal career and destination.
              6. 20 minute break to start working on team selection. Ideal team?

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              7.  Introduce both websites and next week’s assignment
              8.  Discuss significance of term project sites
                       Students should always be sure to visit site and surrounding
                          area twice beforehand, day & night..
                       Discuss assignment for next week. See former term projects
                          on C tools. Questions to answer for each case write up will be
                          on C Tools by 10 am the previous Sunday.
              9.   Review and discuss next week’s assignment.Plus be sure to walk
around the site! Answer the following questions: (To be emailed to you all by Sunday by
10 am.) See guidelines below for your 2 page assignment.
              10. Real Estate Development Feasibility Template from C tools
              11. Visit 3 key websites.
              12. Let’s all go to Pizza House and further work on team selection. Pizza
                  on me.

              2. The purpose of the write-ups is to have you critically evaluate the key
                  risks as illustrated by the 1 page circle of risks. Pick at least 3 areas
                  familiar or of interest to you and focus on these to update and
              3. In class we will brainstorm your ideas for design, uses, rents and
                  financing and structure a new overall economic feasibility.
              4. FORMAT:
                  Each paper, whether group or individual, must be:
                 Approximately 2 pages for individual reports and 4 pages for group
                  Laser printed
                  Contain 1" margins at the top, bottom, and sides.
                  Readable 10-12 point font
                  Review Excel Financial Spreadsheets and “Smart
                  Napkin” for Returns on Investment templates.

Week 2 W 1/19
         1. Hand in and discuss individual case assignment 1 on Fuller Road Station.
            MAX 2 PAGES!
         2. Conduct mini charette brainstorming of your opinions and create a new
            design and economic feasibility.
         3. Discuss next week’s assignment on parking lot & Blake Transit Center
            across street from Library. See C Tools again for best past term
         4. Invited speakers: Tom Fitzsimmons.
         5. Students finalize & turn in your term project teams. Teams prepare
            team charter similar to MAP charter.

Week 3 W 1/26
         1.  Hand in 2 page individual case assignment 2.
         2. Brainstorm former YMCA and Blake Transit Center case.
         3. Continually review CNU and PPS Websites for Urban Trends.
         4. Preview Sunday bus trip and describe bus assignment
         5. Discuss Detroit tour. Need help organizing. Help from
         Mosey, Wallace, RJ King, Austin Black
         6. Invited Speakers: Josie Parker, AA Public Library, & Mike Ford,

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              7.   Preview TEAM case assignment 3 due next week. These write ups
                   should assist your team as a dress rehersal for your term project.
                   Questions to you this Sunday by 10 am. Team write ups can be 4
                   pages max.

Sunday 1-4:30 pm 1/30 Mandatory Downtown Bus Tour. Meet promptly at
Kerrytown Sweetwater, Fifth Ave just south of Kingsley.
                   Site visits include:
                                Term Project Sites
                                Ashley Terrace Lofts:
                                North South Tranisit connections
                                Downtown and Campus Circulator possibilities
                                Allen Creek from U of M Golf Course thru
                                    Downtown to Argo Pond at North Main
                                Old Ann Arbor YMCA at 5th & William:
                                McKinley Town Center
                                City maintenance yards
                                Old West Side, Burns Park
            emphasizing walkable neighborhoods, downtown and people places.

Week 4 W 2/2
         1. Hand in 2 page Bus Tour Observations, explaining what forces are
             necessary to create livable neighborhoods and people places.
         2. Hand in and brainstorm group case assignment 3, Library lot and deck.
         3. Teams begin work on Term Project Site Selection.
         4. Preview next week’s Team case
         5. Questions available Sunday morning
         5. Review financial recommendations & assumptions for term project.

W 2/9 No class to give you time off for 2 bus tours but see you Sat.

Week 5 Sat 2/12 Tour of Detroit. 8 am to 2 pm. Meet at Bus Garage, 1213
Kipke, across parking lot from Crisler Arena, park for free
             1. Tour of Detroit. Leave Ann Arbor at 8 am, back by 2 pm.Tour guides:
                RJ King, Sue Mosey, Austin Black, Mark Wallace, Sean Mann
             2. Bring your Detroit tour observations to class next Wed.
             3. Next Wed team assignment on Broadway Mills, current

Week     5 W 2/16 Class at Ross E 1540 tonight
            1. Detroit bus observations due.
            2. Hand in and brainstorm group case assignment number 4 on Detroit
            3. Decide on term project site. Ask Peter for help if necessary.
            4. Speaker at 8: Chris Leinberger of Brookings Inst. Google him
            5. Preview next week’s assignment.

Week 7 W 2/23
         1. Individual case assignment number 5 on Chicago due.

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              2. TERM PROJECT: Each team present concept for Term Project sites
                  and uses to class. Assign roles of each team member, including Team
                  Chair and Charter. Start Stakeholder and SWOT analysis.
              3. Tour Hobbs & Black with Kristina Glusac. (8:30 to 10 pm)
              4. Midterm course evaluation due

W 3/2 Spring Break (We made it and deserve the break!) Peter will revise course
outline for remainder of term with your evaluations feedback.

Week 8 W 3/9

              1.      Preliminary feasibility analysis on term project to rest of class.
                      HAND IN CONCEPTS indicating uses, approximate massing, and Back
                      of the Envelope “Rent Justified Costs,” which is in C tools.
              2.     Speaker: Jeff Blau

Week 9 W 3/16
         1. TERM PROJECT: Stakeholder and SWOT analysis complete. Start
            massing, market research and construction cost estimating for term
            project. Revise key assumptions & establish Assumptions Matrix
         2. Invited Speakers: Bruce Morrison, Marcus & Millichap Dworkin
         3. Start individual presentations.

Week 10 W 3/23
         1. Complete site planning & design. Hand in preliminary design and
             construction costs. Start financial
         2. See PPS & CNU websites
         3. Invited Speaker: Catherine McClary, Ed Shaffran

Week 11 W 3/30
         1.  Invited speakers: Kirk Westphal invited
         3. TERM PROJECT: Financial Prelims Due.
         4. Revise key assumptions.

Week 12 W 4/6
         1. TERM PROJECT: Revise key assumptions & start
            incremental/sensitivity analysis.
         2. PTA will probably be traveling for MAP

Week 13 W 4/13

               1. Rough draft complete.
               2. Brief oral & visual presentations to class:
                 We will keep this simple so your team can stay focused on the
                 final report.
                 Nominate 1 presenter from your team, 5 mins, 5 slides, max 2
                 mins Q&A. Flexible on this.
                 Include what you think makes your report/approach unique and
                 viable--don't feel obliged to cover ALL topics (finance,
                 design, envt, etc.)

                   For example, if your design is innovate, focus on that. If

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                your financing is creative, focus on that. If your community
                values orientation is strong and compelling, focus on that.

                But, provide enough context that a fellow student with no
                familiarity with your site can still make sense of what you're

4/18            Final written Projects Due 5 p.m.Monday, April 18 to Faculty Box,
                   my Ross office (3rd floor) or 944 N Main St. IMPORTANT: 1)
                   Please use correct sized spiral binders with plastic covers, 30
                   pages max; 2) If necessary include confidential team member
                   critiques of who was great and whom you would replace. 3) Sign
                   each section and make clear your individual responsibility and the
                   areas of the report for which you were responsible. 4) Add your
                   individual credentials or resumes to report. 6) Place names and
                   schools on cover. 7) Maximum of 30 pages, not including resumes
                   but including any appendices!! 8) No Slick Paper; 9) Do not
                   address them to Peter Allen at 944 N Main, use Peter Allen, The
                   University of Michigan; and 10) Very importantly, intelligently
                   integrate your illustrations and exhibits in with supporting text.
                   Do not just put them in appendix!

                  Penalty for being late: 25 points per day.

Week 14       W 4/20 Best Presentations to Jury and Key Stakeholders. Announce

Week 15     Class party, Thur., April 28 5-7 pm at my office. All Real Estate Club, grads
                   from my classes and all former speakers invite

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