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Who should attend
- Lending and Finance Bankers
About the course
Understand the complex process of real estate development
Real Estate Development & Finance
- Structure of the Module
- Delegates’ objectives
Development Market Analysis
- Forms of Analysis
- Trends & Forecasts
Development Appraisals & Viability
- Methods & Approaches: From residuals to cash flows
- Down to affordable land cost or profit
- Line by line items
- Ratio analysis: What indicates a viable project?
SPREADSHEET ANALYSIS: Development Appraisals A spreadsheet model will be used to demonstrate the set-up of development proposal. Ratio analysis & risk analysis techniques will be used to show the implications of changing market conditions.
Cash Flow Appraisal techniques: Moving from Residuals to Cash Flow
- Capital Budgeting Techniques in Development
- Discounted cash flow, Accumulated cash flow and Drawdowns
- Structuring the Cash Flows with phased / mixed use schemes
- Analysing the Outputs: What is appropriate & why?
- Structuring the Development Finance
- Pre-let or speculative?
- Construction loan mechanics
- Main Underwriting Criteria
- Project Monitoring issues
- Exit strategies
CASE STUDY: Development Participants will work in small groups to analyse a case study that considers the risk and return profile of a development and appropriate methods of finance.
SPREADSHEET ANALYSIS: Development Finance Spreadsheet models will be used to demonstrate the impact of finance on Pre-let and Speculative schemes. Debt and Equity issues will be considered and analysed.
CASE STUDY: JV & Private Equity Participants will work in small groups to consider the strategic options, risk & potential returns of a development proposal and consider appropriate methods of raising & pricing the finance with co-investor structures
Joint Ventures & Private Equity
- Landowner & Developer JVs
- Traditional JVs and capital partners
- Different structures for different players
- Risk and return
- Priority of distributions
- Allocating risk & return
- Prefs, Promotes & waterfalls
- Showing the Exit and risk
SPREADSHEET ANALYSIS: JVs & Private Equity Spreadsheet models will be used to demonstrate the set-up of Joint Ventures, ground leases and private equity models. Delegates will test possible outcomes on the templates provided.
Review of Module and Further Reading & References
This course forms module 2 of the School of Real Estate Finance, Investment and Development
The other Investment Module (3 days) can be booked as well as the whole school.
2-Day Development Module
- Interactive case studies based on actual projects with spreadsheet analysis
- Development analysis and appraisal
- Setting up and modelling a development project
- Cash flow appraisal techniques in development
- Structuring the development finance
- Structuring mezzanine, JV and private equity deals
- Modelling sample waterfall structures
The modules are principally aimed at delegates with previous experience in investment/finance or development strategy, but as the course puts delegates on an interactive learning curve to cover fundamentals of each topic, before moving on to more advanced techniques and applications, it allows delegates from both a junior and more senior experience level to participate together. Articles. papers and further references and reading in the Course
Handbooks provide further information, expand and show potential applications for many of the topics included to give a more rounded understanding. Delegates are required to bring their own laptop equipped with Excel 2007 or above and USB port for data and spreadsheet templates transfer.
Real Estate continues to attract the attention of funds, banks, corporates and investors looking for diversification and liability matching. However, cross border investment and financing brings risks as well as opportunities. This programme is designed as an integrated set of modules which will increase participants’ understanding of the complex and changing process of real estate investment, development and finance. In addition to expert course tuition, delegates will benefit from a collegial atmosphere, with networking and information-sharing a valuable part of the course.
The programme’s key objective is to give a clear understanding of the most typical financing and investing structures, as well as the latest thinking in analytical techniques, in a shifting capital markets context.
The recognition and analysis of risk will be a component part of the programme. It covers several techniques and tools that can be applied to dealing with and resolving practical, everyday problems.
The course director is a Chartered Surveyor whose career has spanned both private and public sector work, including large-scale development schemes, urban regeneration projects, project finance and Private Finance Initiatives (PFI). He has undertaken research and consultancy projects in developme...
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