Civic Mathematics

Thesis Driven's Fundamentals of Commercial Real Estate // The who, what, when, where, and why of CRE, one of NYC's most important industries

I teach classes on NYC government and law, because without that knowledge people cannot easily contribute their talents to the city. The whole point of Maximum New York is to create a ready on-ramp for kind, smart, ambitious people into the civic realm.

If you’ve been following MNY, you also know that I have strong critiques of our legacy system of would-be civics instruction (but it’s not just critique—I’m actively deploying my own solutions and thinking about the nature of political teaching).

But I can’t teach everything that NYC’s present and future demand, so I’m always on the lookout for other instructors who take an accessible, creative approach to civically relevant knowledge. That’s why I’ll be in cohort 2 of Thesis Driven’s Fundamentals of Commercial Real Estate Course next month. It lays out the concrete specifics of one of NYC’s most important industries, and contains vital knowledge for anyone who wants to understand the why, how, and what behind what gets built in the city.

Civic mathematics

When people think about “getting involved,” they think about volunteering for a parks group, witnessing their government, or picking up trash in their neighborhood. And while I can’t recommend those things highly enough—they’re cool, they’re fun, you meet people, you make pals, you move the needle—citizens (W-2 job havers, lawmakers, and everyone) need to know the monetary math behind their city.

“Getting involved” is not just about what you do, but what you know. Action and advocacy must be guided by understanding, not hype or intellectual fashion.

When it comes to the money behind what gets built in New York City, that means:

• What it’s given for

• To whom it’s given

• By whom it’s given

• Under which conditions it’s given (schedules, stipulations, economic/legal risk, and more)

Thesis Driven’s class covers all of this and more by following a real estate team through a hypothetical development project called Harbor Yards:

Day 1

• Welcome to Harbor Yards - Meet the Harbor Yards deal, key stakeholders, and their roles & responsibilities for the big project

• The Harbor Yards Business Plan - Underwrite the Harbor Yards deal and learn why unlevered yield on cost (UYOC) will determining whether to acquire the site

• Getting Capital from Investors - Calculate the project IRR and understand how it is used to source the debt and equity needed to bring Harbor Yards to life

Day 2

• Operating Plan - Walk through all the contracts & budgets that drive the decision-making and KPIs for the team

• Day in the Life - Meet in detail the asset manager, property manager, and leasing agents and understand their personal goals, keys to success and professional pain points 

• Selling Harbor Yards - Walk through different scenarios for the sale and understand how much money each stakeholder makes in the end

• Epilogue - Work with your peers to apply what you learned to a “Phase 2” Harbor Yards project, then present your business plans to the group!

Get Concrete, Get Quantitative

So much of what happens in New York City depends on money—an obvious enough statement to most people. But if you want to be concrete, you must do more than say sentences like “so much of what happens in New York City depends on money.” You must do more than have qualitative opinions about what should get built, and in which manner it should be built.

You need to competently wield quantitative specifics if: you want to help the city grow and change, you want to help craft its laws, or you want to understand the physical reality you observe.

Are you a quantitative practitioner who wants to teach others? Let me know. Do you want to learn the civic mathematics of real estate? Take the class with me:

Welcome Back, Harbor Yards: Announcing Cohort #2